SECTOR WEIGHTINGS

OBJECTIVE

The Fund’s objective is to achieve long-term growth of capital.

STRATEGY

The Toroso Newfound Tactical Allocation Fund(the “Fund”) is an open-end mutual fund investing primarily in Exchange Traded Funds (ETFs).  The Fund is a multi-asset class strategy focusing on investing in four primary economic regimes: Prosperity, Inflation, Recession, and Deflation.  The tactical overlay uses relative momentum to target specific regimes as well as attempt to minimize exposure to regimes that may be out of favor.

What is Tactical Allocation?

Tactical asset allocation is a more active approach than strategic asset allocation. With tactical asset allocation, rather than following a static allocation and re-balancing on a periodic basis using historical averages of modern portfolio theory, one can choose to overweight or underweight asset classes based on a current analytical assessment of selected metrics. The relative momentum models of Newfound Research, LLC (Newfound) are intended to enhance the “all-weather” concept of economic regime investing by Toroso. In this way, the Fund strives to track the regimes as the economy changes, as opposed to waiting for a specific date on the calendar. And, unlike some other “all-weather” strategies, this Fund is concerned about the multiple tail risks that manifest themselves in certain economic environments.

Why utilize ETF’s to provide exposure to Asset Classes?

When selecting specific ETFs, Toroso primarily focuses on index construction and portfolio holdings. Toroso employs a five-step process when determining ETFs that make up each asset class allocation:

1. Select the benchmark for each asset class
2. Seek opportunities to outperform the benchmark
3. Ensure acceptable diversification
4. Select ETFs that meet the criteria
5. Confirm selections provide better fundamentals than benchmark

ETFs are then evaluated based on attributes such as price-to-book ratios, fees, liquidity, and the availability of options on the ETF. Additionally, Toroso analyzes the index methodologies of each ETF under consideration and evaluates the extent of any overlapping holdings in other ETFs already held within the portfolio.

INVESTMENT PROCESS

The relative momentum models of Newfound Research, LLC (Newfound) are intended to enhance the “all-weather” concept of economic regime investing by Toroso. In this way, the Fund strives to track the regimes as the economy changes, as opposed to waiting for a specific date on the calendar. And, unlike some other “all-weather” strategies, this Fund is concerned about the multiple tail risks that manifest themselves in certain economic environments.

The table below shows the maximum, neutral, and minimum weight allocations to each asset class and the corresponding expected economic condition that would warrant such allocation. Newfound’s signals will specify the Fund’s weightings in a specific asset class at any point in time, and Toroso will make investments in ETFs for the Fund’s portfolio based on the tactical allocation signals. The Fund will be invested in four asset classes at all times; however, at any point in time, any of the asset classes could be underweight or overweight, based on the advice of Newfound.