OBJECTIVES

The fund’s two investment objectives are (1) to provide annual Total Return (with income contributing a significant part) averaging 8% to 10% and (2) to limit volatility and downside to 4% to 5% even during an adverse month or quarter in the investment environment. Of course, there can be no assurance that the fund will succeed in achieving these two key goals.

STRATEGY

The Portfolio Managers analyze and allocate portions of the fund’s portfolio to a wide range of income-oriented Asset Classes. Each decision must serve one or both of the fund’s two goals: To enhance Total Return and/or to reduce volatility and downside risk of the overall portfolio. The Strategic Income Fund is a “fund of funds” that invests primarily in a wide variety of income-oriented asset classes including domestic and foreign bonds, including high yield ( or “junk” bonds) along with other bond types such as high-grade corporates, U.S. government bonds, floating rate instruments, municipal bonds, and emerging market bonds. The fund does not employ a passive ‘buy and hold’ strategy. Instead, the fund employs a tactical style that seeks to limit volatility and downside risk as well as enhancing return through income and capital appreciation.

The Sierra Core Fund pays a quarterly dividend. Shares are available through TD Ameritrade, Charles Schwab & Co, Inc. and Fidelity and many other firms; please see the Where to Purchase tab for a current list.

PRINCIPAL RISKS

As with all mutual funds, there is the risk that you could lose money through your investment in the fund. During some months and some quarters, the NAV of the fund will decline, and it is possible that some entire years will also have negative results. An investment in the fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund will strive to meet its longer-term investment objectives, there is no assurance that it will do so.

Management Style Risk. The share price of the fund changes daily based on the performance of the Underlying Funds in which it invests. The ability of the fund to meet its investment objective is directly related to the Adviser’s ability to identify Underlying Funds that have the potential to achieve positive total return, and to create diversity within the total portfolio of the fund. The Adviser’s judgments about the attractiveness and potential appreciation of particular investments in which the fund invests will in some cases prove to be incorrect, and there is no guarantee that the Adviser’s investment strategy will produce the desired long-term results.

Risks Associated with Investing in Underlying Funds. The fund invests in Underlying Funds, including mutual funds, closed-end funds and ETFs. As a result, your overall cost of investing in the fund will be higher than the cost of investing directly in Underlying Fund shares and may be higher than other mutual funds that invest directly in stocks and bonds. You will indirectly bear fees and expenses charged by the Underlying Funds in addition to the fund’s direct fees and expenses.

• Investment Management Risk. When the fund invests in Underlying Funds there is a risk that the investment advisers of those Underlying Funds may make investment decisions that are detrimental to the performance of the fund.
• Additional Underlying Fund Risks. The strategy of investing in Underlying Funds will affect the timing, amount and character of distributions to you and thereby may increase the amount of income taxes you pay. In addition, certain limitations on the acquisition of mutual fund shares by the fund may prevent the fund from allocating its investments in the manner the Adviser considers optimal. The fund will purchase some Underlying Funds that charge an early redemption fee, and its subsequent sales of such Underlying Funds will cause the fund to incur those fees.

Equity Market Risk. The net asset value of the fund will fluctuate based on changes in the value of the Underlying Funds in which the fund invests. The fund will invest in some Underlying Funds that invest in equity securities, which are more volatile and carry more risk than some other forms of investment. The price of equity securities may rise or fall because of fluctuations in the economy, specific industries and investor sentiment. Stock prices in general will periodically decline over short and even extended periods of time. Market prices of equity securities in broad market segments may be adversely affected by a prominent issuer having experienced losses or a decline in earnings or such an issuer’s failure to meet the market’s expectations with respect to new products or services, or even by factors wholly unrelated to the value or condition of the issuer, such as changes in interest rates or investor attitudes, among other factors.

• Emerging Markets Securities Risk. Some of the Underlying Funds invest in securities of issuers located in emerging countries. Emerging countries may have relatively unstable governments, economies based on less diversified industrial bases and securities markets that trade a smaller number of securities. Companies in emerging markets are often smaller, less seasoned and more recently organized than many U.S. companies.
• Issuer-Specific Risks. In some cases, the value of an Underlying Fund will be more volatile than the U.S. stock market as a whole, and in order to seek the risk-reducing benefits of diversification, many of the Underlying Funds will in fact be chosen because they tend to perform differently from the U.S. stock market as a whole.

The value of securities of smaller issuers can be more volatile than that of larger issuers. The value of certain types of securities can be more volatile due to increased sensitivity to adverse issuer, political, regulatory, market, investor sentiment and economic developments.

• Small and Mid-Capitalization Securities Risks. Investments in Underlying Funds that own small- and mid-capitalization companies may be more vulnerable than larger, more established organizations to adverse business or economic developments. In particular, small capitalization companies may have limited product lines, markets, and financial resources and may be dependent upon a relatively small management group. These securities may trade over-the-counter or on a listed exchange and may or may not pay dividends.

Fixed Income Risks. When the fund invests in fixed income Underlying Funds, the value of your investment in the fund will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of the Underlying Funds owned by the fund. In general, the market price of debt securities with longer maturities will increase or decrease more in response to changes in interest rates than shorter-term securities.

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Other risk factors impacting fixed-income securities include credit risk, maturity risk, market risk, extension risk, illiquid security risks, foreign securities risk, prepayment risk and investment-grade securities risk. These risks could affect the value of a particular investment by the fund possibly causing the fund’s share price and total return to be reduced and fluctuate more than other types of investments. In addition, some of the Underlying Funds in which the fund will invest from time to time invest in what are sometimes referred to as high yield or junk bonds. Such securities are considered speculative investments that carry greater risk of default and are more susceptible to real or perceived adverse economic and competitive industry conditions than higher quality debt securities.

Foreign Risk. The fund will make frequent use of Underlying Funds that invest in foreign securities in order to seek diversification. Investments in Underlying Funds that invest in foreign equity and debt securities could subject the fund to greater risks because the fund’s performance may depend on issues other than the performance of a particular company or U.S. market sector. Changes in foreign economies and political climates are more likely to affect the fund than a mutual fund that invests exclusively in U.S. securities. The values of foreign securities are also affected by the value of the local currency relative to the U.S. dollar. There may also be less government supervision of foreign markets, resulting in non-uniform accounting practices and less publicly available information. The values of foreign investments may be affected by changes in exchange control regulations, application of foreign tax laws (including withholding tax), changes in governmental administration or economic or monetary policy (in this country or abroad) or changed circumstances in dealings between nations. In addition, foreign brokerage commissions, custody fees and other costs of investing in foreign securities are generally higher than in the United States. Investments in foreign issues could be affected by other factors not present in the United States, including expropriation, armed conflict, confiscatory taxation, and potential difficulties in enforcing contractual obligations and foreign securities may be more illiquid that domestic securities.

Illiquid Securities and Derivatives Risks. Some of the Underlying Funds invest in illiquid securities as well as in derivatives such as stock index futures, currency futures and commodity futures. Derivatives are financial contracts whose value depend on, or are derived from, the value of an underlying index. Some of these investments involve higher risk and some of them may on occasion subject those Underlying Funds to higher price volatility.

Portfolio Turnover Risks. Portfolio turnover refers to the rate at which the Underlying Funds held by the fund are bought and sold. The higher the rate, the higher the transactional and brokerage costs associated with turnover, which may reduce the fund’s returns, unless the securities traded can be bought and sold without significant transaction or commission costs or redemption fees. Because the fund will seldom hold an Underlying Fund for 12 months or more, investors who own the fund in taxable accounts will be subject to federal income tax at short-term rates.

Please refer to the section in the Prospectus entitled Additional Information about the fund’s Investments and Risks for more details regarding the fund’s investments and risks that you should consider before investing.