The Swan Defined Risk U.S. Small Cap Fund
Applying the DRS to U.S. Small Cap Companies
The Swan Defined Risk U.S. Small Cap Fund seeks to address common investor concerns, such as seeking growth while mitigating risks when investing in small to mid-sized companies in the United States via the Russell 2000 Index ETF (IWM). The fund allows investors to seek participation in the growth opportunities while also seeking to dampen losses during periods of major market losses that can be experienced when investing in these smaller, growth-oriented companies.
Navigating market uncertainty. Capitalizing on market weakness.
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 taking advantage of opportunities in times of extreme market weakness can 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 hedged equity approach that remains passively invested in equities to pursue long-term growth of capital while actively managing the hedge to capitalize on large moves in the equity market: raising the hedge level after large gains and unlocking the hedge value to buy more equity shares after large market declines.
Class A: SDCAX | Class C: SDCCX | Class I: SDCIX
Based on our Defined Risk Strategy, the Swan Defined Risk U.S. Small Cap Fund seeks superior risk-adjusted returns over a full market cycle with potentially less downside risk and volatility than the fund benchmark, Russell 2000 Index. See the disclosures below for more information.
The goal: is to achieve long-term growth of capital, while minimizing the downside risk of U.S. Small Cap equity markets.
Key elements of our Always Invested, Always Hedged strategy include:
> Always invested using low-cost ETFs
> Designed to seek long-term growth of capital
> Always hedged using long-term put options
> Aims to dampen losses during major market downturns
Defined Risk Strategy
Other Defined Risk Funds
Invest in Equities
- Always Invested in ETFs or a basket of stocks that closely represent the Russell 2000 Index
Hedge the Equities
- Always Hedged by actively managing long-term put options (LEAPs), generally one to two years to expiration, initially
- Purchased at, or near near-the-money
Seek Additional Return
- Actively managing shorter-term options portfolio
- Utilizing a disciplined, time-tested approach
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 advisor has contractually agreed to reduce its fees and/or absorb expenses of the Fund, at least until October 31, 2021 (exclusive of any taxes, interest, brokerage commissions, dividend expense on securities sold short, acquired fund fees and expenses, or extraordinary expenses such as litigation or reorganization costs). The Fund’s total gross annual fund operating expenses are 2.17% for Class A; 2.92% for Class C; 1.92% for Class I. After the fee waiver these expenses are 1.65% for Class A, 2.40% for Class C, and 1.40% for Class I shares, respectively.. 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.
Lead Portfolio Manager, Founder, President
Portfolio Manager, Chief Operations Officer
Chris Hausman, CMT®
Senior Portfolio Manager, Managing Director-Risk
Randy Swan and 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
For general questions or support
E: Email Client Services
For advisors or institutions with questions
P: 970-382-8901, ext. 114