Strategy. The Fund is a diversified actively-managed exchange-traded fund (ETF) that under normal circumstances will invest more than 80% of the Funds net assets in passive domestic equity sector ETFs and ETFs investing respectively in gold and U.S. Treasuries. The Funds principal investment strategy will employ a systematic approach to technical analysis focused on the identification of important trends. Technical analysis is a form of security analysis that uses price data, typically displayed graphically in charts, which are analyzed using various indicators in order to make investment recommendations. The Funds portfolio management team will use technical indicators in determining when to purchase and sell the Funds investments. Technical indicators are derived from historical prices and volume for a security. Technical indicators … Show more… The Fund is a diversified actively-managed exchange-traded fund (ETF) that under normal circumstances will invest more than 80% of the Funds net assets in passive domestic equity sector ETFs and ETFs investing respectively in gold and U.S. Treasuries. The Funds principal investment strategy will employ a systematic approach to technical analysis focused on the identification of important trends. Technical analysis is a form of security analysis that uses price data, typically displayed graphically in charts, which are analyzed using various indicators in order to make investment recommendations. The Funds portfolio management team will use technical indicators in determining when to purchase and sell the Funds investments. Technical indicators are derived from historical prices and volume for a security. Technical indicators are used by traders, analysts and portfolio managers including the Subadviser, who follow an investment strategy of technical analysis. By analyzing historical data, technical analysts use indicators to predict future price movements. Technical indicators are mathematical and rules-based, and are designed to identify market trends, which are in turn used to identify potentially profitable buying and selling opportunities in the investment markets. The use of technical factors cannot guarantee that the Fund will fulfill its investment objective. Because of the influence of overall market psychology on individual stock performance, technical analysis of trends at the market and sector level is key to the Subadvisers investment strategy and its effort to outperform the S&P 500. The Funds strategy is designed to benefit from market uptrends while minimizing downside risk during downtrends. We believe we have developed a sophisticated proprietary technical model that leverages sector leadership in the U.S. equity market, while managing through downdrafts by incorporating exposure to other asset classes, including ETFs investing respectively in gold and U.S. Treasuries, as well as cash equivalents. Through years of research, the portfolio management team believes it has identified several reliable rules-based technical indicators. In part through trial and error, the team has refined these various indicators into a proprietary investment methodology they believe will improve the Funds long-term market returns and risk metrics relative to the S&P 500. The Funds investable universe will consist of the sectors of the S&P 500 , as defined by the State Street series of SPDR ETFs. The Funds investment strategy is based in part upon tactical rotation of the 11 S&P sectors. The ETFs that will initially be eligible for inclusion in our strategy are the following: ? The Communication Services Select Sector SPDR Fund (XLC) ? The Consumer Discretionary Select Sector SPDR Fund (XLY) ? The Consumer Staples Select Sector SPDR Fund (XLP) ? The Energy Select SPDR Fund (XLE) ? The Financial Select Sector SPDR Fund (XLF) ? The Health Care Select Sector SPDR Fund (XLV) ? The Industrial Select Sector SPDR Fund (XLI) ? The Materials Select Sector SPDR Fund (XLB) ? The Real Estate Select Sector SPDR Fund (XLRE) ? The Technology Select Sector SPDR Fund (XLK) ? The Utilities Select Sector SPDR Fund (XLU) In addition, the following ETFs may be incorporated into the Funds portfolio during periods where our models indicate a defensive posture out of equities is warranted. ? SPDR Gold MiniShares (GLDM) ? SPDR Portfolio Long Term Treasury ETF (SPTL) ? SPDR Portfolio Short Term Treasury ETF (SPTS) The Funds investment process is 100% technical and generally 100% systematic. When we say the investment process is 100% technical, that means that all investment decisions are made using technical analysis, which aims to forecast the direction of prices through the study of past market data, namely price or derivations of price (i.e., technical indicators). When we say the investment strategy is generally 100% systematic, we mean that it is a rules-based system that operates without human discretion, although the word generally allows the portfolio managers to override the technical model in environments that are not comparable to the historical market data studied for the creation of the model. As part of the Funds proprietary investment and research process, the portfolio managers monitor pricing data for the 14 ETFs listed above and apply proprietary rules-based filters using trend-following and overbought/oversold technical indicators. For those ETFs that pass the technical filter, a momentum calculation is performed and applied and the sector ETFs are then assigned a momentum ranking. Signals are generated by the proprietary model when there are changes in filter results and momentum rankings. To manage risk, the model will at times include ETFs representing alternative asset classes, including U.S. Treasuries or gold. The Fund anticipates holding between 5 and 8 ETF positions, distributed between risk-on sector ETF positions of approximately equal sizes and occasional risk-off ETF positions of varying sizes based on the results of our technical analysis filters. Equally weighting selected risk-on sectors will result in materially different sector exposure than the sector exposure of the S&P 500 . The S&P 500 Index, or Standard & Poors 500 Index, is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S. The primary potential source of alpha in the Funds portfolio will be sector exposures that differ from the sector exposures of the S&P 500 . Alpha is a risk (beta adjusted) measurement. Officially, alpha measures the difference between a portfolios actual returns and what it might be expected to deliver based on its level of risk. High risk generally means higher reward. A positive alpha means the Fund has beaten expectations. A negative alpha means that the manager failed to match performance with risk. If two managers had the same return, but one had a lower beta, that manager would have a higher alpha. The targeted maximum of any individual ETF is approximately 20% of the Funds net assets for risk-on equity positions (the sector ETFs) and 25% of the Funds net assets for risk-off positions in ETFs that invest in gold (e.g., other pooled investment vehicles that represent an investment in gold). In periods of substantial uncertainty representing severe risk off conditions, the Fund may invest substantial amounts of the Fund (up to 75%) in Treasury ETFs such as SPTS and SPTL. A market where stocks are outperforming bonds is said to be a risk-on environment. When stocks are selling off and investors are favoring bonds or gold, the environment is said to be risk-off. Portfolios are rebalanced monthly. Show less