Strategy. The Flexible ETF is an ETF-of-ETFs and as such invests primarily in other ETFs (Underlying ETFs). The Underlying ETFs, in turn, invest primarily in individual securities such as common stocks and corporate or government bonds. Because markets change, the Advisor manages the Flexible ETFs portfolio using an active investment strategy called Upgrading, which seeks to capture global market trends. The Advisor invests in the Underlying ETFs that it considers to be in sync with current market leadership. The Advisor sells an Underlying ETF when it believes that the Underlying ETF is no longer performing in sync with current market leadership or if a new Underlying ETF is judged more attractive than a current holding. The Advisor classifies the pool of … Show more… The Flexible ETF is an ETF-of-ETFs and as such invests primarily in other ETFs (Underlying ETFs). The Underlying ETFs, in turn, invest primarily in individual securities such as common stocks and corporate or government bonds. Because markets change, the Advisor manages the Flexible ETFs portfolio using an active investment strategy called Upgrading, which seeks to capture global market trends. The Advisor invests in the Underlying ETFs that it considers to be in sync with current market leadership. The Advisor sells an Underlying ETF when it believes that the Underlying ETF is no longer performing in sync with current market leadership or if a new Underlying ETF is judged more attractive than a current holding. The Advisor classifies the pool of Underlying ETFs into five risk/return categories, listed here from what it perceives to have the highest to lowest risk: Sector Equity (including single-country Emerging Markets) Underlying ETFs Aggressive Equity Underlying ETFs Core Equity Underlying ETFs Total Return Underlying ETFs Bond Underlying ETFs Under normal market conditions, the Flexible ETF will invest predominately in Bond Underlying ETFs of varying maturity, credit quality (including high-yield securities, or junk bonds) and regional exposure. The Flexible ETF attempts to take advantage of bond market leadership trends by targeting those areas of the bond market that are excelling in the current market environment. The Flexible ETF aims to control downside risk by limiting exposure to more volatile areas of the bond market. The Flexible ETF may purchase, without limit, shares of Underlying ETFs that invest in domestic and international corporate or government bonds. To a lesser extent the Flexible ETF may also invest a portion of its assets in Total Return Underlying ETFs, which may employ a wide variety of investment strategies, including blending equity securities with fixed income instruments, and techniques designed to provide steady returns with dampened volatility, such as market neutral, long/short, and arbitrage strategies. Because Total Return Underlying ETFs are not fully invested in bonds, these funds typically have less credit and interest rate risk. The Flexible ETF may engage in securities lending activities to increase its income. See More about the Funds Investment Objectives, Strategies and Risks The Advisors Process for Classifying the Underlying ETFs for more information on this system. Show less