The Fund seeks to employ a highly disciplined Value-oriented philosophy rooted in the precepts of Graham and Dodd. We believe that Value can be found across the spectrum of the economy, so we will “go anywhere for value.”

The Fund is actively managed according to a Large Cap Value discipline which seeks to identify strong businesses trading at compelling prices, rather than just finding the statistically cheapest stocks. The sub-adviser’s process involves rigorous quantitative screening and then arduous qualitative research.

The Fund invests primarily in large capitalization companies, which the Sub-Adviser generally defines as companies with a minimum market capitalization of $4 billion at the time of purchase. The Fund invests primarily in both dividend and non-dividend paying common stocks. The Sub-Adviser selects securities for investment that are financially strong and meet specific valuation criteria using the principles of value investing based on Classic Valuation Analysis, as discussed further below.

Classic Valuation Analysis is an investment methodology based on principles Benjamin Graham developed over 70 years ago, which we have refined based on changing economic and macro trends over the past few decades. Using valuation models developed by Matrix, metrics such as *earnings growth, *dividend growth, *return on equity, and *book value are analyzed versus their historical (previous six to ten years), current, and projected (next two years) levels to determine a company’s “Intrinsic Value.” Intrinsic Value is Matrix’s best estimate of where the Fund’s portfolio manager believes the stock should trade. The Intrinsic Value estimate is dynamic and updated regularly as companies report new fundamental and financial data, usually quarterly. Value criteria require companies to have a strong financial position, as measured by comfortable levels of debt and *free cash flow generation in excess of their cash needs and a current stock price attractively discounted versus its “Intrinsic Value.”

Consistent with the principles of Classic Valuation Analysis, the Fund diversifies its portfolio over a range of companies and industries. The Fund may invest in any sector. At times the Sub-Adviser may overweight the Fund’s portfolio in one or more particular sectors, and/or underweight the Fund’s portfolio or not invest in one or more particular sectors.

Once a stock has been purchased for the Fund’s portfolio, it generally is sold for one of two reasons:

• when a security reaches its Intrinsic Value, based on the Sub-Adviser’s proprietary models; or
• there has been a fundamental change in the issuer’s balance sheet or results of operations so that it no longer meets the Fund’s financial or valuation criteria.

The Fund generally has had a low rate of portfolio turnover, which may lead to lower transaction costs and may help to improve Fund performance. However, portfolio securities may be sold without regard to the length of time they have been held.

The Fund is an actively-managed ETF.

• Eight proprietary intrinsic value models have been used since the inception of the sub-adviser. These models allow for the identification of undervalued stocks across all industries and in all market conditions.
• Research based, high conviction approach leads to a portfolio of 30-40 names, which can provide a favorable mix of performance potential and diversification.
• 30+ years of continuity of leadership and philosophy at the Sub-Adviser. Portfolio team averages 20+ years at the firm and the principals of the sub-adviser have significant personal assets invested alongside shareholders.