The Swan Defined Risk U.S. Small Cap Fund
Applying the DRS to U.S. Small Cap Domestic Companies
The Swan Defined Risk U.S. Small Cap Fund seeks to address common investor concerns such as protecting capital, tax implications and market risk while investing in small to mid-sized companies in the United States via the Russell 2000 Index ETF (IWM). The DRS allows investors to seek participation in the growth opportunities while also seeking some protection from the volatility that can be experienced when investing in these smaller, growth-oriented companies.
Investing to help minimize downside risk The market is unpredictable, making it difficult to time the markets or consistently pick outperforming stocks. That’s why we believe reducing downside risk can significantly impact wealth creation. 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 returns while protecting portfolios from large market declines.
SWAN DEFINED RISK U.S. SMALL CAP FUND OVERVIEW
Class A: SDCAX | Class C: SDCCX | Class I: SDCIX
Based on our Defined Risk Strategy, the Swan Defined Risk U.S. Small Cap Fund is an absolute return type, risk-managed approach to asset allocation designed for growth investors and based on the U.S. small cap equity index ETF (IWM). See the disclosures below for more information.
The goal: to achieve positive returns while minimizing the downside risk of Small Cap equity investing.
Key elements of the Fund’s strategy include:
> No reliance on market timing or stock selection
> Designed to seek consistent returns
> Aims to protect client assets during market downturns
> Always hedged, all the time, using put options
• Buy ETFs that track the U.S. Small Cap index
• Invested at all times
• Buy puts on the U.S. Small Cap index
• At – or near-the-money
• Long-term – generally one to two years, initially
Seek to Generate Income
• Seek to sell shorter-term options
• Market-neutral trading strategies
Monitor & Adjust
• Daily monitoring
• Rebalance as required
• Re-hedge annually
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 Russell 2000 Index is designed to measure the equity market performance of U.S. small-cap to mid-cap companies. 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 October 31, 2017. The Fund’s total annual fund operating expenses after fee waiver are for Class A 1.95%, Class C 2.70%, and Class I 1.70% shares, respectively. * Without these waivers, the Fund’s total annual operating expenses would be 5.05% for Class A, 5.80% for Class C and 4.80% 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