The Swan Defined Risk Foreign Developed Fund
Applying the DRS to Foreign Developed Markets
The Swan Defined Risk Foreign Developed Fund seeks to address common investor concerns such as seeking capital appreciation while seeking protection of that capital when investing in developed foreign markets. The DRS allows investors to seek participation in the growth opportunities while also seeking some protection from major losses that can be experienced in foreign developed markets.
Investing for growth, Seeking protection of capital
The market is unpredictable, making it difficult to plan long-term outcomes. That’s why we believe reducing downside risk can help smooth out returns over market cycles and significantly impact wealth creation over the long term.
With this in mind, we developed our Defined Risk Strategy in 1997 as a way to offer our clients a distinctive, innovative tool that seeks consistent long-term returns while protecting portfolios from large market declines.
SWAN DEFINED RISK FOREIGN DEVELOPED FUND OVERVIEW
Class A: SDJAX | Class C: SDJCX | Class I: SDJIX
Based on our Defined Risk Strategy, the Swan Defined Risk Foreign Developed Fund is an absolute return type, risk-managed approach to asset allocation designed for growth investors and based on investment in an equity index ETF (EAFA) of developed foreign markets. See the disclosures below for more information.
The goal: to achieve consistent long-term returns while minimizing the downside risk of Foreign Developed equity.
Key elements of the Fund’s strategy include:
> Always invested using low-cost ETFs
> Designed to seek consistent long-term returns
> Aims to protect client assets during major market downturns
> Always hedged, all the time, using put options
Defined Risk Strategy
Other Defined Risk Funds
Invest in Equities
• Buy ETFs that track Foreign Developed equity indexes
• Invested at all times
Hedge the Equities
• Buy puts on Foreign Developed indexes
• At – or near-the-money
• Long-term – generally one to two years, initially
Trade Options Strategies
• Seek to buy and/or sell shorter-term options
• Typically, non-directional, market-neutral initially
Monitor & Adjust
• Daily monitoring
• Rebalance as required
• Re-hedge annually, or as needed
Performance shown is historical and does not guarantee future results. Current performance may be lower or higher. Because share price, principal value, and return will vary, you may have a gain or loss when you sell fund shares. Performance assumes the reinvestment of dividends and capital gains. “Without sales charge” performance does not reflect the current maximum sales charge. Had the sales charge been included, the Fund’s returns would have been lower. Class I shares have no sales charge and may be purchased by specified classes of investors. The MSCI (Morgan Stanley Capital International) EAFE index comprises the MSCI country indexes capturing large and mid-cap equities across developed markets, excluding the U.S. and Canada. You cannot invest directly in an index or average. For performance information current to the most recent month end, please call (877) 896-2590. Maximum sales charge for Class A Shares is 5.50%. The fund’s investment adviser has contractually agreed to reduce its fees and/or absorb expenses of the fund, at least until December 14, 2019. The Fund’s total annual fund operating expenses after fee waiver are 2.16% for Class A, 2.91% for Class C, and 1.91% for Class I shares, respectively.* Without the fee waivers the Fund’s total annual operating expenses would be 2.26% for Class A, 3.01% for Class C, and 2.01% for Class I. Please review the fund’s prospectus for more information regarding the fund’s fees and expenses. These fee waivers and expense reimbursements are subject to possible recoupment from the Fund within the three years after the fiscal year end during which the fees have been waived or reimbursed, if such recoupment can be achieved within the foregoing expense limits. These agreements may be terminated only by the Fund’s Board of Trustees, on 60 days’ written notice to the Fund’s adviser.
Randy Swan started Swan Global Investments in 1997, looking to supply investment management services that were not available to most investors. Early in his financial career, Randy saw that options provided an opportunity to minimize investment risk.
Randy and co-portfolio manager Rob Swan have been managing the Funds since inception.
Swan Capital Management
1099 Main Avenue, Suite 206
Durango, Co 81301
Gemini Fund Services, LLC
PO Box 541150
Omaha, Ne 68154