Disclaimers

• Inherent Risks
• Principle Risks
• Investment History
• Own Them Equally

Inherent Risks
(Back to Top) There are inherent risks involved in investing, and any potential investor should consider the following before investing in any mutual fund:

• Investments are not deposits or obligations of, or guaranteed or endorsed by, any financial institution, are not insured by the FDIC or any other agency, and involve investment risk, including possible loss of the principal amount invested
• The following sector risks should be considered:
  
  
  • Bonds - Investments in fixed income securities are subject to interest rate risks. The principal value of a bond falls when interest rates rise and rise when interest rates fall. During periods of rising interest rates, the value of a bond investment is at greater risk than during periods of stable or falling rates.
  
  
  • Capital Markets - Equity securities are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities. The net asset value per share of this fund will fluctuate as the value of the securities in the portfolio changes.
  
  
  • Energy & Raw Material Sectors - Investments concentrated in one economic sector experience greater volatility than more broadly based investments.
  
  
  • Real Estate - An investment in real estate funds entails certain risks. Because these funds invest primarily in real estate investment trusts and/or real-estate related companies, they are subject to the risks of the real estate market. These risks include fluctuating real estate values, changes in interest rates and property taxes, as well as mortgage-related risks. Additionally, funds that concentrate their investments in fewer industries or securities may be more volatile than more broadly diversified funds.
  
  
  • International Investing - Investments in foreign securities are subject to greater volatility due to such factors as changes in currency rates, foreign taxation, differences in auditing and other financial standards, etc.

Principle Risk Factors
(Back to Top) An investment in a Fund is subject to investment risks, including the possible loss of the principal amount invested. Each Fund’s performance per share will change daily based on many factors, including fluctuation in interest rates, the quality of the instruments in the Fund’s investment portfolio, national and international economic conditions and general market conditions. You may lose money on your investment in a Fund or the Fund could under perform other investment companies. Generally, each Underlying Fund and/or Fund will be subject to the following risks:

• Underlying Fund Risks – Because the Underlying Funds may invest in certain asset classes and/or specific investment styles, such as growth stocks or value stocks, the risks associated with that asset class or investment style will affect the Underlying Fund and the Fund in proportion to the percentage of the Fund’s assets invested in the Underlying Fund. Certain of the risks that may be associated with the Underlying Funds are described below.
  
  If a Fund invests in Underlying Funds that use margin, leverage, short sales and other forms of financial derivatives, such as options and futures, an investment in the Fund may be more volatile than investments in other mutual funds. Although the Funds will not engage in short sales, the Underlying Funds may be permitted to do so. However, the Funds do not intend to invest in Funds that frequently engage in short sales. Short sales are speculative investments and will cause a Fund to lose money if the value of a security sold short by the Underlying Fund, does not go down as the investment adviser expects.
  
  By investing in shares of an Underlying Fund, each Fund indirectly pays a portion of management fees and other expenses of the Underlying Fund, including any applicable sales charges. Therefore, you may pay higher total operating expenses and other costs than you might pay by owning each of the Underlying Funds directly.


• Index Funds – Index Funds employ a passive management approach, which is expected to result in performance that is approximately the same as that of an index. While an Underlying Fund attempts to replicate the investment results of an index, the Underlying Fund’s investment results generally will not be identical to those of the index because of the fees and expenses borne by the Underlying Fund and investor purchases and sales of Underlying Fund shares, which can occur daily.


• Exchange Traded Funds – ETFs are baskets of securities that are, like stocks, traded on exchanges such as the American Stock Exchange and the New York Stock Exchange. ETFs are priced continuously and trade throughout the day. ETFs may track a securities index, a particular market sector, or a particular segment of a securities index or market sector. ETFs and index funds can experience many of the same risks associated with individual securities. ETFs are subject to market risk where the market as a whole, or that specific sector, may decline. ETFs may trade at a discount to the aggregate value of the underlying securities. The underlying securities in an ETF may not follow the price movements of an entire industry or sector. Trading in an ETF may be halted if the trading in one or more of the ETFs underlying securities is halted. Although the expense ratio for ETFs are generally low, frequent trading of ETFs by a mutual fund can generate brokerage expense.


• Asset Allocation Risk – Each Fund’s strategy to gain exposure to the themes in substantially equal 20% portions is intended to provide consistent, quality performance for the Fund, but there is no guarantee that such strategy will produce the desired results. It is possible that a Fund will invest on an Underlying Fund that performs poorly or a sub-class within a theme which under performs other sub-classes.


• Non-Diversification Risk – Focusing investments in a small number of issuers, industries or foreign currencies increases risks. Funds that are “non-diversified” may invest a greater percentage of their assets in the securities of a single issuer than Funds that are “diversified”. Each Fund is non-diversified and an Underlying Fund may be non-diversified. Funds that invest in a relatively small number of issuers are more susceptible to risks associated with a single economic, political or regulatory occurrence than a more diversified portfolio might be. Some of those issuers also may present substantial credit or other risks.


• Management Risk – The risk that the investment adviser of the Funds and Underlying Funds may make investment decisions that are detrimental to the performance of the Funds.


• Experience Risk – Each Fund is a new mutual fund and has no history of operation. In addition, the Adviser has no experience managing a mutual fund. Therefore, investors cannot judge the Adviser by its track record managing a mutual fund.


• Market Risk – The market price of securities owned by a Fund or Underlying Fund may go up or down, sometimes rapidly or unpredictably. Securities may decline in value due to factors affecting securities markets generally or particular industries represented in the securities markets. The value of a security may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously. Equity securities generally have greater price volatility than fixed income securities.


• Issuer Risk – The price of an individual security or particular type of security can be more volatile than the market as a whole and can fluctuate differently than the market as a whole. An individual issuer’s securities can rise or fall dramatically with little or no warning based upon reasons which directly relate to the issuer such as earning reports, management issues and the development of new products.


• Equity Risk – The values of equity securities may decline due to general market conditions which are not specifically related to a particular company, such as real or perceived adverse economic conditions, changes in the general outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. They may also decline due to factors which affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. Equity securities generally have greater price volatility than fixed income securities.
  
  Mid- to small-cap stocks tend to present greater risks than large-cap stocks because they are generally more volatile and can be less liquid. In addition, to the extent a Fund or Underlying Fund invests in a growth stock or value fund, it will be subject to the risk that their intrinsic values may never be realized by the market and their returns will trail those of other asset classes or the overall stock market. Investment in growth stocks may lack the dividend yield that can cushion stock prices in market downturns.


• Fixed Income Securities – The value of fixed income securities will fluctuate with changes in interest rates. Generally, a rise in interest rates causes a decline in the value of fixed income securities and the market price of securities with longer maturities will increase or decrease more in response to changes in interest rates than shorter-term securities.
  
  Inflation-indexed securities, including Treasury Inflation-Protected Securities (“TIPS”), decline in value when real interest rates rise. In certain interest rate environments, such as when real interest rates are rising faster than nominal interest rates, inflation-indexed securities may experience greater losses than other fixed income securities with similar durations.


• Interest Rate Risk – As nominal interest rates rise, the value of fixed income securities held by a Fund or Underlying Fund is likely to decrease. Securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations. A nominal interest rate can be described as the sum of a real interest rate and an expected inflation rate.


• Credit Risk – A Fund or Underlying Fund could lose money if the issuer or guarantor of a fixed income security, or the counter party to a derivatives contract or repurchase agreement, is unable or unwilling to make timely principal and/or interest payments, or to otherwise honor its obligations. Securities are subject to varying degrees of credit risk, which are often reflected in credit ratings. Municipal bonds are subject to the risk that litigation, legislation or other political events, local business or economic conditions, or the bankruptcy of the issuer could have a significant effect on an issuer’s ability to make payments of principal and/or interest.


• High Yield Securities – Certain Underlying Funds may invest in securities rated lower than Baa by Moody’s Investor Services or lower than BBB by Standard & Poor’s Division of the McGraw-Hill Companies, Inc. sometimes referred to as “high yield” or “junk bonds”. Such securities are may be subject to greater levels of interest rate, credit and liquidity risks than funds that do not invest in such securities. These securities are considered predominately speculative with respect to the issuer’s continuing ability to make principal and interest payments. An economic downturn or period of rising interest rates could adversely affect the market for these securities and reduce an Underlying Fund’s ability to sell these securities (liquidity risk). If the issuer of a security is in default with respect to interest or principal payments, an Underlying Fund may lose its entire investment.


• International Securities Risks – Foreign securities involve investment risks different from those associated with domestic securities. Foreign investments may be riskier than U.S. investments because of unstable international political and economic conditions, foreign controls on investment and currency exchange rates, withholding taxes, or a lack of adequate company information, liquidity, and government regulation.


• Emerging Markets Risk – Investments in foreign emerging markets present greater risk than investing in foreign issuers in general. The risk of political or social upheaval is greater in foreign emerging markets. In addition, a number of emerging markets restrict foreign investment in stocks. Inflation and rapid fluctuations in inflation rates have had and may continue to have negative effects on the economies and securities markets of certain emerging market countries. Moreover, many of the emerging securities markets are relatively small, have low trading volumes, suffer periods of relative illiquidity, and are characterized by significant price volatility.


• Currency Risk – Underlying Funds that invest directly in foreign (non-U.S.) currencies or in securities that trade in, and receive revenues in, foreign (non-U.S.) currencies are subject to the risk that those currencies will decline in value relative to the U.S. dollar, or, in the case of hedging positions, that the U.S. dollar will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the U.S. or abroad. As a result, the Underlying Fund’s investments in foreign currency-denominated securities may reduce the returns of the Fund.


• Derivatives – Generally, a derivative is a financial arrangement the value of which is based on (or “derived” from) a traditional security, asset, or market index. Derivative securities include, but are not limited to, options and futures transactions, forward foreign currency exchange contracts, mortgage- and asset-backed securities, “when-issued” securities, and swaps. In a typical swap agreement, the Fund or Underlying Fund will receive the price appreciation (or depreciation) of an index or portion of an index, from the counter party to the swap agreement in exchange for paying the counter party an agreed-upon fee.
  
  The use of derivative securities is a highly specialized activity and there can be no guarantee that their use will increase the return of a Fund or Underlying Fund or protect its assets from declining in value. In fact, investments in derivative securities may actually lower a Fund or Underlying Fund’s return if such investments are timed incorrectly or are executed under adverse market conditions. While hedging can reduce or eliminate losses, it can also reduce or eliminate gains. In addition, the lack of a liquid market for derivative securities may prevent the Fund or Underlying Fund from selling unfavorable positions, which could result in adverse consequences.


• Real Estate Risk – A Fund or Underlying Fund that invests in real estate securities is subject to risks similar to those associated with direct ownership of real estate, including losses from casualty or condemnation, and changes in local and general economic conditions, supply and demand, interest rates, zoning laws, regulatory limitations on rents, property taxes and operating expenses.
  
  An Underlying Fund that purchases mortgage-related securities is subject to certain additional risks. Rising interest rates tend to extend the duration of mortgage-related securities, making them more sensitive to changes in interest rates. As a result, in a period of rising interest rates, a Fund that holds mortgage-related securities may exhibit additional volatility. This is known as extension risk. In addition, mortgage-related securities are subject to prepayment risk. When interest rates decline, borrowers may pay off their mortgages sooner than expected. This can reduce the returns of a Fund because the Fund will have to reinvest that money at the lower prevailing interest rates. This is known as contraction risk.


• Real Estate Investment Trusts Risk (“REITs”) – Securities issued by real estate investment trusts (“REITs”) are subject to additional risks to the “Real Estate Risks” described above, such as poor performance by the manager of the REIT, adverse changes to the tax laws or failure by the REIT to qualify for tax-free pass-through of income under the Internal Revenue Code of 1986, as amended. In addition, some REITs have limited diversification because they invest in a limited number of properties, a narrow geographic area, or a single type of property. Also, the organizational documents of a REIT may contain provisions that make changes in control of the REIT difficult and time-consuming.


• Energy Sector Risk – Companies in the industry sector are subject to various risks including: effects on the profitability from changes in worldwide energy prices and exploration, and production spending; adverse effects from changes in exchange rates, government regulation, world events and economic conditions; market, economic and political risks of the countries where energy companies are located to do business; and risks for environmental damage claims.


• Raw Materials Risk – Investing in natural resources can be riskier than other types of investment activities because of a range of factors, including price fluctuation caused by real and perceived inflationary trends and political developments; and the cost assumed by natural resource companies in complying with environmental and safety regulations.


• Industry Concentration Risk – Certain Underlying Funds may concentrate their investments in a particular industry or industries. Concentration risk results from maintaining exposure to issuers conducting business in a specific industry. The risk of concentrating investments in a particular industry is that an Underlying Fund will be more susceptible to the risks associated with that industry than a fund does not concentrate its investments.


• Geographic Concentration Risk – An Underlying Fund may invest a substantial portion of its assets in issuers located in a single country or a limited number of countries. If the fund concentrates its investments in this manner, it assumes the risk that economic, political and social conditions in those countries will have a significant impact on its investment performance. An Underlying Fund’s investment performance may also be more volatile if it concentrates its investments in certain countries, especially emerging countries.


• Illiquidity Risk – Because of the uncertainty of an available market, a Fund or Underlying Fund could have difficulty disposing of illiquid securities when a decrease in value is occurring or is expected to occur. The Fund or Underlying Fund may have to lower the price, sell other securities instead or forgo an investment opportunity. Any of these could have a negative effect on fund management or performance. In addition, the lack of an active trading market may make it difficult to obtain an accurate price for any such security held by the Fund or Underlying Fund.
  
  In addition, under applicable law relating to the Funds “fund of funds” arrangements, the Funds may be restricted from selling over 1% of an Underlying Fund within a 30 day period.


• Leveraging Risk – Certain Underlying Funds may use leveraging techniques. The use of leverage may cause an Underlying Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet segregation requirements. In addition, leverage, including borrowing, may cause an Underlying Fund to be more volatile than if the Fund had not been leveraged. This is because leverage tends to exaggerate the effect of any increase or decrease the value of an Underlying Fund’s portfolio securities.


• Repurchase Agreements Risk – The Underlying Funds may engage in repurchase agreements. The use of repurchase agreements involves certain risks. For example, if the seller of the agreements defaults on its obligation to repurchase the underlying securities at a time when the value of these securities has declined, the Fund may incur a loss upon disposition of the securities. There is also the risk that the seller of the agreement may become insolvent and subject to liquidation.

Investment History
(Back to Top) The Giant5 Funds are new funds with limited investment history, and there is no guarantee that they will achieve their investment objectives.

 

Own Them Equally
(Back to Top)

What we mean by “Own Them Equally”. The Fund will generally invest in the 5 Essential Themes in substantially equal 20% portions over time. However, the amount of the Fund’s assets invested in the themes will vary and there is no limit to the amount of Fund’s assets that may be invested in a particular theme. Due to the current low availability of Raw Material funds, the Investment Adviser reserves the right to combine the Raw Materials and Energy themes for asset allocation and rebalancing purposes, until such time that Raw Material funds become sufficiently available again.

The Willis Group is the Investment adviser for Giant 5 Funds. Michael G. Willis is the lead portfolio manager.