Managed Portfolio Series (0001511699) (Filer)

Filed with the U.S. Securities and Exchange Commission on October 27, 2026

1933 Act Registration File No. 333-172080

1940 Act File No. 811-22525

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM N-1A

and/or

(Check appropriate box or boxes.)

MANAGED PORTFOLIO SERIES

(Exact Name of Registrant as Specified in Charter)

615 East Michigan Street

Milwaukee, WI  53202

(Address of Principal Executive Offices, including Zip Code)

Registrant’s Telephone Number, including Area Code:  (414) 516-1712

(Name and Address of Agent for Service)

Copy to:

It is proposed that this filing will become effective (check appropriate box)

If appropriate, check the following box:

Explanatory Note: This Post-Effective Amendment (“PEA”) No. 662 to the Registration Statement of Managed Portfolio Series

(the “Trust”) is being filed for the purpose of updating the financial information and to make other permissible changes under

Rule 485(b).

Institutional Class – LKBLX

Prospectus

October 28, 2026

The SEC has not approved or disapproved of these securities or determined if this

Prospectus is truthful or complete.  Any representation to the contrary is a criminal

offense.

LK Balanced Fund

A series of Managed Portfolio Series (the “Trust”)

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Investment Objective

The LK Balanced Fund (the “Fund”) seeks to achieve long-term capital appreciation and current

income.

Fees and Expenses of the Fund

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the

Fund. You may pay other fees, such as brokerage commissions and other fees to financial

intermediaries, which are not reflected in the tables and example below.

(1)Lawson Kroeker Investment Management, Inc. (the “Adviser”) has contractually agreed to waive its management fees

and pay Fund expenses, in order to ensure that Total Annual Fund Operating Expenses (excluding front-end or

contingent deferred loads, taxes, leverage/borrowing interest, interest expense, dividends paid on short sales, brokerage

commissions, acquired fund fees and expenses, expenses incurred in connection with any merger or reorganization, or

extraordinary expenses such as litigation) do not exceed 1.00% of the Fund’s average daily net assets.  Fees waived and

expenses paid by the Adviser may be recouped by the Adviser for a period of 36 months following the month during

which such fee waiver and expense payment was made if such recoupment can be achieved without exceeding the

expense limit in effect at the time the fee waiver and expense payment occurred and the expense limit in effect at the

time of recoupment. The Operating Expenses Limitation Agreement is indefinite in term and cannot be terminated

through at least October 28, 2027. Thereafter, the agreement may be terminated at any time upon 60 days’ written notice

by the Trust’s Board of Trustees (the “Board”) or the Adviser.

Example

This Example is intended to help you compare the costs of investing in the Fund with the cost of

investing in other mutual funds.  The Example assumes that you invest $10,000 in the Fund for the

time periods indicated and then redeem all of your shares at the end of those periods.  The Example

also assumes that your investment has a 5% return each year and that the Fund’s operating expenses

remain the same (taking into account the expense limitation for one year). Although your actual costs

may be higher or lower, based on these assumptions, your costs would be:

Portfolio Turnover

The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns

over” its portfolio).  A higher portfolio turnover rate may indicate higher transaction costs and may

result in higher taxes when Fund shares are held in a taxable account.  These costs, which are not

reflected in the annual fund operating expenses or in the Example, affect the Fund’s performance.

During the most recent fiscal year, the Fund’s portfolio turnover rate was 31% of the average value of

its portfolio.

Principal Investment Strategies

Under normal market conditions, the Fund pursues its investment objective by principally investing in

a combination of equity (including common stocks, preferred stocks and convertible securities) and

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fixed income securities (including securities issued, backed or otherwise guaranteed by the U.S.

government or its agencies, securities issued by U.S. government-sponsored entities, corporate bonds,

municipal bonds, and other taxable debt securities). The Fund typically invests 40% to 75% of its

assets in equity securities selected primarily for their growth potential and 25% to 60% of its assets in

equity and fixed income securities selected primarily for their income potential.  While the mix of

equity and fixed income securities will vary depending on the Adviser’s outlook on the markets, under

normal circumstances at least 25% of the Fund’s assets will be invested in fixed income securities. The

Fund may invest in securities of any market capitalization.  Although the Fund will invest primarily in

equity and fixed income securities of U.S. companies, the Fund may invest up to 20% of its assets in

equity and fixed income securities of foreign companies that are organized and headquartered in

countries outside of the United States.  The Fund’s investments in foreign securities may include

American Depository Receipts (“ADRs”).  The Fund may also invest in floating rate securities.

The Adviser’s equity investment process begins with independent research to identify areas of

attractive investment opportunities. The Adviser performs fundamental analysis company by company,

to discover factors influencing a business’s profitability. Normally, this involves reviewing,

scrutinizing, and analyzing corporate reports; press releases; financial statements; documents filed with

the SEC or other regulatory entities; newspaper, magazine, and internet articles; audio recordings or

transcripts of conference calls and presentations; and a variety of additional sources. The Adviser

focuses on a small number of carefully chosen businesses that it believes have a competitive advantage

and high profit margins with little or no debt, plentiful free cash flow, and wise deployment of capital.

The Adviser attempts to purchase securities of these companies at a discount to its estimate of a

company’s worth.

Included in the Adviser’s analysis of individual equity securities is an assessment of general economic

conditions; an evaluation of the stock and bond markets relative to each other; and a review of

economic, social, and political trends. Stock selection is accomplished only after completing a

thorough analysis.  The Adviser makes its buy/sell/retain decisions based on its analysis of the

security’s estimated worth relative to its current price.

The Adviser’s fixed income philosophy is an extension of its equity philosophy in that it approaches

all investments from a fundamental basis. Employing this philosophy, the Adviser does not try to time

the short-term movements of interest rates, but instead attempts to build a portfolio of high quality

corporate, agency, and government bonds and equity securities with a strong income potential that

provides stability and income to the overall portfolio. The Adviser’s fixed income portfolio allocation

is a complement to its equity portfolio allocation, with shifts between allocation percentages dependent

upon current market opportunities within a long-term view.

Corporate, agency, and government bonds are continually compared against each other at all maturities

to evaluate where the best opportunities lie for improved total return. Yields-to-maturity, yields-to-

worst, and cash-flow yields are compared to like-quality bonds. Credit analysis of corporate bonds is

performed to try and avoid future rating downgrades as well as identify possible upgrade candidates.

The Fund may invest up to 10% of its assets in high yield debt or “junk bonds” (higher-risk, lower-

rated fixed income securities such as those rated at the time of purchase lower than BBB- by Standard

& Poor’s Rating Service, Inc. (“S&P”) or lower than Baa3 by Moody’s Investors Service, Inc.

(“Moody’s”)).  Below investment grade debt securities have speculative characteristics and they may

be less liquid than investment grade debt securities. The Fund has no set policy regarding the maturity

or duration of any or all of its securities.

Principal Risks

As with any mutual fund, there are risks to investing.  An investment in the Fund is not a deposit of a

bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) or any

other governmental agency.  In addition to possibly not achieving your investment goals, you could

lose all or a portion of your investment in the Fund over short or even long periods of time.  The

principal risks of investing in the Fund are:

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General Market Risk. The Fund’s net asset value (“NAV”) and investment return will fluctuate based

upon changes in the value of its portfolio securities. Certain securities selected for the Fund’s portfolio

may be worth less than the price originally paid for them, or less than they were worth at an earlier

time. 

Management Risk.  The Fund may not meet its investment objective or may underperform the market

or other mutual funds with similar strategies if the Adviser cannot successfully implement the Fund’s

investment strategies.

Asset Allocation Risk.  The risk that the Fund may allocate assets to an asset category that performs

poorly relative to other asset categories.

Equity Securities Risk.  The equity securities held in the Fund’s portfolio may experience sudden,

unpredictable drops in value or long periods of decline in value.  This may occur because of factors

that affect securities markets generally or factors affecting specific industries, sectors, geographic

markets, or companies in which the Fund invests.

Large-Cap, Mid-Cap and Small-Cap Companies Risk.  The Fund’s investment in larger companies is

subject to the risk that larger companies are sometimes unable to attain the high growth rates of

successful, smaller companies, especially during extended periods of economic expansion.  Securities

of mid-cap and small-cap companies may be more volatile and less liquid than the securities of large-

cap companies.

Foreign Securities Risk.  Investments in securities issued by foreign companies involve risks not

generally associated with investments in the securities of U.S. companies, including risks relating to

political, social, and economic developments abroad, differences between U.S. and foreign regulatory

and tax requirements and market practices, as well as fluctuations in foreign currencies. There may be

less information publicly available about foreign companies than about a U.S. company, and many

foreign companies are not subject to accounting, auditing, and financial reporting standards, regulatory

framework and practices comparable to those in the U.S. Unexpected political, regulatory and

diplomatic events within the United States and abroad may affect investor and consumer confidence

and may adversely impact global financial markets and the broader economy. Foreign conflicts have

caused, and could continue to cause, significant market disruptions and volatility within specific

markets and globally.

ADR Risk.  ADRs are generally subject to the same risks as the foreign securities because their values

depend on the performance of the underlying foreign securities.  In addition, depositary receipts may

not track the price of the underlying foreign securities and their value may change materially at times

when the U.S. markets are not open for trading.  Holders of unsponsored ADRs generally bear all the

costs of such depositary receipts.

Convertible Securities Risk.  Convertible securities risk is the risk that the market values of convertible

securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline.

A convertible security’s market value, however, also tends to reflect the market price of the common

stock of the issuing company when that stock price approaches or is greater than the convertible

security’s “conversion price.”  The conversion price is defined as the predetermined price at which the

convertible security could be exchanged for the associated stock.  As the market price of the

underlying common stock declines, the price of the convertible security tends to be influenced more by

the yield of the convertible security.

Debt Securities Risks. The Fund’s investments in debt securities will be subject to credit risk, interest

rate risk, prepayment risk, extension risk and duration risk. Credit risk is the risk that an issuer will not

make timely payments of principal and interest. Interest rate risk is the risk that the value of debt

securities fluctuates with changes in interest rates (e.g., increases in interest rates result in a decrease in

the value of debt securities). Interest rate changes and their impact on the Fund and its share price can

be sudden and unpredictable. The Fund will be exposed to heightened interest rate risk should interest

rates rise. Pre-payment risk is the risk that the principal on debt securities will be paid off prior to

maturity causing the Fund to invest in debt securities with lower interest rates. Extension risk is the

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risk that in times of rising interest rates, prepayments will slow causing portfolio securities considered

short or intermediate term to be long-term securities, which fluctuate more widely in response to

changes in interest rates than shorter term securities. Duration risk is the risk that holding long duration

and long maturity investments will magnify certain other risks, including interest rate risk and credit

risk. Changes in market conditions and government policies may lead to periods of heightened

volatility and reduced liquidity in the fixed-income securities market, and could result in an increase in

Fund redemptions.

Liquidity Risk. The risk that investments cannot be readily sold at the desired time or price, and the

Fund may have to accept a lower price or may not be able to sell the security at all. An inability to sell

securities can adversely affect the Fund’s value or prevent the Fund from taking advantage of other

investment opportunities. Liquid portfolio investments may become illiquid or less liquid after

purchase by the Fund due to low trading volume, adverse investor perceptions and/or other market

developments. In recent years, the number and capacity of dealers that make markets in fixed income

securities has decreased. Consequently, the decline in dealers engaging in market making trading

activities may increase liquidity risk, which can be more pronounced in periods of market turmoil.

Liquidity risk may be magnified in a rising interest rate environment or when investor redemptions

from fixed income funds may be higher than normal, causing increased supply in the market due to

selling activity. Liquidity risk includes the risk that the Fund will experience significant net

redemptions at a time when it cannot find willing buyers for its portfolio securities or can only sell its

portfolio securities at a material loss.

Below Investment Grade Debt Securities Risk.  Investments in below investment grade debt securities

and unrated securities of similar credit quality, as determined by the Adviser, (commonly known as

“junk bonds”) involve a greater risk of default and are subject to greater levels of credit and liquidity

risk.  Below investment grade debt securities have speculative characteristics and their value may be

subject to greater fluctuation than investment grade debt securities.

Floating Rate Securities Risk.  Because changes in interest rates on floating (or variable) rate securities

may lag behind changes in market rates, the value of such securities may decline during periods of

rising interest rates until their interest rates reset to market rates.  The interest rate on a floating rate

security may reset on a predetermined schedule and as a result, not reset during periods when changes

in market rates are substantial.  Lifetime limits on resets may also prevent their rates from adjusting to

market rates.  During periods of declining interest rates, because the interest rates on floating rate

securities generally reset downward, their market value is unlikely to rise to the same extent as the

value of comparable fixed rate securities.

Government-Sponsored Entities Risk. The Fund invests in securities issued or guaranteed by

government-sponsored entities.  However, these securities may not be guaranteed or insured by the

U.S. government and may only be supported by the credit of the issuing agency.

Municipal Securities Risk.  The municipal market is volatile and can be significantly affected by

adverse tax, legislative or political changes and the financial condition of the issuers of municipal

securities.  Changes in a municipality’s financial health may make it difficult for the municipality to

make interest and principal payments when due.  Failure of a municipal security issuer to comply with

applicable tax requirements may make income paid thereon taxable, resulting in a decline in the

security’s value.  In addition, there could be changes in applicable tax laws or tax treatments that

reduce or eliminate the current federal income tax exemption on municipal securities or otherwise

adversely affect the current federal or state tax status of municipal securities.

Preferred Stock Risk.  A preferred stock is a blend of the characteristics of a bond and common stock.

It may offer the higher yield of a bond and has priority over common stock in equity ownership, but it

does not have the seniority of a bond and, unlike common stock, its participation in the issuer’s growth

may be limited.  Preferred stock has preference over common stock in the receipt of dividends and/or

in any residual assets after payment to creditors, should the issuer be dissolved.  Although the dividend

on a preferred stock may be set at a fixed annual rate, in some circumstances it may be changed or

passed by the issuer.

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Sector Risk. To the extent the Fund invests more heavily in particular sectors of the economy, the

Fund’s performance will be especially sensitive to developments that significantly affect those sectors.

Performance

The accompanying bar chart and performance table provide some indication of the risks of investing in

the Fund by showing how the Fund’s total return has varied for annual periods through December 31,

2025. Next to the bar chart are the Fund’s highest and lowest quarterly returns during the period shown

in the bar chart. The performance table that follows shows the Fund’s average annual total returns over

time compared with broad-based securities market indices (the S&P 500® Index and Bloomberg U.S.

Aggregate Bond Index) and an additional more specialized index. Updated performance information is

available at https://lkfunds.com/ or by calling the Fund toll-free at 855-698-1378. The Fund’s past

performance (before and after taxes) is not necessarily an indication of how the Fund will perform in

the future.

Simultaneous with the commencement of the Fund’s operations on July 1, 2012, the L/K Limited

Partnership #1, a limited partnership managed by the Adviser on a fully discretionary basis (the

“Predecessor Partnership”) converted into the Fund by terminating and distributing its assets (after the

payment of all remaining liabilities and obligations and the establishment of any reserves) to its

partners in proportion to the partnership interests of the partners. Some or all of the partners then

contributed the received partnership assets to the Fund in return for 80% or more of the ownership

interests in the Fund. The Predecessor Partnership maintained an investment objective and investment

policies that were, in all material respects, equivalent to those of the Fund, and at the time of the

conversion was managed by the same team of portfolio managers as the Fund. The Fund’s

performance for periods before July 1, 2012 is that of the Predecessor Partnership and includes gains

or losses, the reinvestment of all dividends and interest, and reflects the deduction of fees and

expenses, including management fees, audit expenses, and brokerage commissions.  If the Predecessor

Partnership’s performance was adjusted to reflect the first year expenses of the Fund (commencing

July 1, 2012), the Fund’s performance for all periods would have been lower. The financial statements

of the Predecessor Partnership were audited for all years that the Predecessor Partnership has been in

existence (since December 31, 1986). The performance returns of the Predecessor Partnership are

unaudited and were calculated by the Adviser on a total return basis.  The Predecessor Partnership was

not registered under the Investment Company Act of 1940, as amended, (the “1940 Act”) and was not

subject to certain investment limitations, diversification requirements, and other restrictions imposed

by the 1940 Act and the Internal Revenue Code of 1986, as amended (the “Code”), which, if

applicable, may have adversely affected its performance. The performance shown should not be

considered indicative of the Fund’s future performance. Beginning July 1, 2012, the Fund’s

performance is calculated using the standard formula set forth in rules promulgated by the SEC, which

differs in certain respects from the methods used to compute total return for the Predecessor

Partnership.

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Calendar Year Total Returns as of December 31

After tax returns are calculated using the historical highest individual federal marginal income tax

rates, and do not reflect the impact of state and local taxes.  Actual after-tax returns depend on your

situation and may differ from those shown.  Furthermore, the after-tax returns shown are not relevant

to those who hold their shares through tax-advantaged arrangements such as 401(k) plans or individual

retirement accounts (“IRAs”). 

Management

Investment Adviser

Lawson Kroeker Investment Management, Inc. is the Fund’s investment adviser.

Portfolio Managers

Thomas J. Sudyka, Jr., CFA and Chad C. Clauser, CFA  each a Managing Director of the Adviser, are

jointly responsible for the day-to-day management of the Fund. Mr. Sudyka has managed the Fund

since its inception in 2012. Mr. Clauser has managed the Fund since October 2023.

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Purchase and Sale of Fund Shares

You may purchase or redeem Fund shares on any day that the New York Stock Exchange (“NYSE”) is

open for business by written request via mail (LK Balanced Fund, c/o U.S. Bank Global Fund

Services, P.O. Box 219252, Kansas City, MO 64121-9252), by contacting the Fund by telephone at

855-698-1378, by wire transaction, or through a financial intermediary. The minimum initial

investment amount for purchases of shares of the Fund is $50,000 for regular accounts and $5,000 for

individual retirement accounts. Subsequent purchases may be made with a minimum investment

amount of $500.

Tax Information

The Fund’s distributions are generally taxable, and will be taxed as ordinary income or capital gains,

unless you are a tax-exempt organization or are investing through a tax-advantaged arrangement such

as a 401(k) plan or IRA. Distributions on investments made through tax-advantaged arrangements

generally will be taxed as ordinary income when withdrawn from those accounts.

Payments to Broker-Dealers and Other Financial Intermediaries

If you purchase Fund shares through a broker-dealer or other financial intermediary (such as a bank or

financial advisor), the Fund and/or its Adviser may pay the intermediary for the sale of Fund shares

and related services. These payments may create conflicts of interest by influencing the broker-dealer

or other intermediary and your salesperson to recommend the Fund over another investment. Ask your

salesperson or visit your financial intermediary’s website for more information.

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The Fund seeks to achieve long-term capital appreciation and current income.  The investment

objective is not fundamental and may be changed without the approval of the Fund’s shareholders

upon 60 days’ prior written notice to shareholders.

Under normal market conditions, the Fund pursues its investment objective by principally investing in

a combination of equity (including common stocks, preferred stocks and convertible securities) and

fixed income securities (including securities issued, backed or otherwise guaranteed by the U.S.

government or its agencies, securities issued by U.S. government-sponsored entities, corporate bonds,

municipal bonds, and other taxable debt securities).  The Fund typically invests 40% to 75% of its

assets in equity securities selected primarily for their growth potential and 25% to 60% of its assets in

equity and fixed income securities selected primarily for their income potential.  While the mix of

equity and fixed income securities will vary depending on the Adviser’s outlook on the markets, under

normal circumstances at least 25% of the Fund’s assets will be invested in fixed income securities. The

Fund may invest in securities of any market capitalization.  Although the Fund will invest primarily in

equity and fixed income securities of U.S. companies, the Fund may invest up to 20% of its assets in

equity and fixed income securities of foreign companies that are organized and headquartered in

countries outside of the United States.  The Fund’s investments in foreign securities may include

ADRs.  The Fund may also invest in floating rate securities.

The Adviser’s equity investment process begins with independent research to identify areas of

attractive investment opportunities. The Adviser performs fundamental analysis company by company

to discover factors influencing a business’s profitability. Normally, this involves reviewing,

scrutinizing, and analyzing corporate reports; press releases; financial statements; documents filed with

the SEC or other regulatory entities; newspaper, magazine, and internet articles; audio recordings or

transcripts of conference calls and presentations; and a variety of additional sources.  The Adviser

focuses on a small number of carefully chosen businesses that it believes have a competitive advantage

and high profit margins with little or no debt, plentiful free cash flow, and wise deployment of capital.

The Adviser attempts to purchase securities of these companies at a discount to its estimate of a

company’s worth and is not constrained by geography, sector, industry or market capitalization.

Included in the Adviser’s analysis of individual equity securities is an assessment of general economic

conditions; an evaluation of the stock and bond markets relative to each other; and a review of

economic, social, and political trends. Stock selection is accomplished only after completing a

thorough analysis.  The Adviser makes its buy/sell/retain decisions based upon its analysis of a

security’s estimated worth relative to its current price. The Adviser is not a market timer or a trader,

but prefers to give its thorough analysis of a particular security’s true worth time to be recognized by

the market.

The Adviser’s fixed income philosophy is an extension of its equity philosophy in that it approaches

all investments from a fundamental basis. Employing this philosophy, the Adviser does not try to time

the short-term movements of interest rates, but instead attempts to build a portfolio of high quality

corporate, agency, and government bonds and equity securities with a strong income potential that

provides stability and income to the overall portfolio. The Adviser’s fixed income portfolio allocation

is a complement to its equity portfolio allocation, with shifts between allocation percentages dependent

upon current market opportunities within a long-term view.

Corporate, agency, and government bonds are continually compared against each other at all maturities

to evaluate where the best opportunities lie for improved total return. Yields-to-maturity, yields-to-

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worst, and cash-flow yields are compared to like-quality bonds. Credit analysis of corporate bonds is

performed to try and avoid future rating downgrades as well as identify possible upgrade candidates.

The Fund may invest up to 10% of its assets in high yield debt or “junk bonds” (higher-risk, lower-

rated fixed income securities such as those rated lower than BBB- by S&P or lower than Baa3 by

Moody’s). Below investment grade debt securities have speculative characteristics and they may be

less liquid than investment grade debt securities. The Fund has no set policy regarding the maturity or

duration of any or all of its securities.

Patience is a key element of the Adviser’s investment philosophy and investment strategy. That

strategy recognizes the importance of various research studies which have shown that average

investors significantly under-perform the overall market because they let their emotions get in the way

of rational decision-making. The Adviser seeks to stay the course with its disciplined approach,

avoiding the latest investment fads which typically result in missing the upswing and substantially

lower gains.

The Adviser’s investment strategy is focused on developing long-term investors and managing the

portfolio in their best interests. Having shareholders who do not run for the hills at the first sign of

price declines or become elated by short-term gains helps the Adviser to maintain its long-term

investment focus and contribute to long-term performance. In part, the Fund’s fixed income allocation

helps in this process by dampening the overall volatility of the Fund, and keeping shareholders

invested during difficult times.

Cash or Similar Investments and Temporary Strategies of the Fund.  At the Adviser’s discretion, the

Fund may invest in high-quality, short-term debt securities and money market instruments for (i)

temporary defensive purposes in response to adverse market, economic or political conditions and (ii)

retaining flexibility in meeting redemptions, paying expenses, and identifying and assessing

investment opportunities.  These short-term debt securities and money market instruments include

cash, shares of other mutual funds, commercial paper, certificates of deposit, bankers’ acceptances,

U.S. government securities and repurchase agreements.  To the extent that the Fund invests in money

market mutual funds for its cash position, there will be some duplication of expenses because the Fund

will bear its pro rata portion of such money market funds’ management fees and operational expenses.

When investing for temporary defensive purposes, the Adviser may invest up to 100% of the Fund’s

total assets in such instruments.  Taking a temporary defensive position may result in the Fund not

achieving its investment objective.

Before investing in the Fund, you should carefully consider your own investment goals, the amount of

time you are willing to leave your money invested, and the amount of risk you are willing to take.  An

investment in the Fund is not a deposit of a bank and is not insured or guaranteed by the FDIC or any

other governmental agency.  There can be no assurance that the Fund will achieve its investment

objective.  Remember, in addition to possibly not achieving your investment goals, you could lose all

or a portion of your investment in the Fund.  The principal risks of investing in the Fund are:

General Market Risk.  The NAV and investment return of the Fund will fluctuate based upon changes

in the value of the Fund's portfolio securities. The market value of a security may move up or down,

sometimes rapidly and unpredictably. These fluctuations may cause a security to be worth less than the

price originally paid for it, or less than it was worth at an earlier time. Market risk may affect a single

issuer, industry, sector of the economy, or the market as a whole. U.S. and international markets have

experienced, and may continue to experience, volatility, which may increase risks associated with an

investment in the Fund. In addition, local, regional, or global events such as war, including Russia’s

invasion of Ukraine, regional armed conflict, acts of terrorism, market volatility related to global trade

policy, the spread of infectious diseases or other public health issues, recessions, rising inflation, rising

interest rates, or other events could have a significant negative impact on the Fund and its investments.

The market value of securities in which the Fund invests is based upon the market’s perception of

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value, and is not necessarily an objective measure of the securities’ value. In some cases, for example,

the stock prices of individual companies have been negatively affected even though there may be little

or no apparent degradation in the financial condition or prospects of the issuers. Similarly, the debt

markets have experienced substantially lower valuations, reduced liquidity, price volatility, credit

downgrades, increased likelihood of default and valuation difficulties. As a result of this significant

volatility, many of the following risks associated with an investment in the Fund may be increased. 

Continuing market volatility may have adverse effects on the Fund. 

Management Risk.  The ability of the Fund to meet its investment objective is directly related to the

Adviser’s investment strategies for the Fund. The value of your investment in the Fund may vary with

the effectiveness of the Adviser’s research, analysis and asset allocation among portfolio securities. If

the Adviser’s investment strategies do not produce the expected results, the value of your investment

could be diminished or even lost entirely and the Fund could underperform the market or other mutual

funds with similar investment objectives.

Asset Allocation Risk.  The risk that the Fund may allocate assets to an asset category that

underperforms other asset categories. For example, the Fund may be over-weighted in equity securities

when the stock market is falling and the fixed income market is rising.

Equity Securities Risk.  The Fund’s investments in equity securities are susceptible to general stock

market fluctuations and to volatile increases and decreases in value as market confidence in and

perceptions of their issuers change.  These investor perceptions are based on various and unpredictable

factors including: expectations regarding government, economic, monetary and fiscal policies;

inflation and interest rates; economic expansion or contraction; global and/or regional political,

economic and banking crises; and factors affecting specific industries, sectors, geographic markets, or

companies in which the Fund invests.  The Fund’s NAV and investment return will fluctuate based

upon changes in the value of its portfolio securities.

Large-Cap Company Risk.  The Fund’s investments in larger, more established companies are subject

to the risk that larger companies are sometimes unable to attain the high growth rates of successful,

smaller companies, especially during extended periods of economic expansion.  Larger, more

established companies may be unable to respond quickly to new competitive challenges such as

changes in consumer tastes or innovative smaller competitors potentially resulting in lower valuations

for their common stock. 

Mid-Cap and Small-Cap Companies Risk.  Mid-cap and small-cap companies in which the Fund

invests may not have the management experience, financial resources, product diversification and

competitive strengths of large-cap companies.  Therefore, their securities may be more volatile and

less liquid than the securities of larger, more established companies.  Mid-cap and small-cap company

stocks may also be bought and sold less often and in smaller amounts than larger company stocks.

Because of this, if the Adviser wants to sell a large quantity of a mid-cap or small-cap company stock,

it may have to sell at a lower price than it might prefer, or it may have to sell in smaller than desired

quantities over a period of time.  Analysts and other investors may follow these companies less

actively and therefore information about these companies may not be as readily available as that for

large-cap companies.

Foreign Securities Risk.  The risks of investing in securities of foreign companies involves risks not

generally associated with investments in securities of U.S. companies, including risks relating to

political, social and economic developments abroad and differences between U.S. and foreign

regulatory and tax requirements, and market practices.  Securities that are denominated in foreign

currencies are subject to the further risk that the value of the foreign currency will fall in relation to the

U.S. dollar and/or will be affected by volatile currency markets or actions of U.S. and foreign

governments or central banks. Foreign securities may be subject to greater fluctuations in price than

securities of U.S. companies because foreign markets may be smaller and less liquid than U.S.

markets. There may be less information publicly available about foreign companies than about a U.S.

company, and many foreign companies are not subject to accounting, auditing, and financial reporting

standards, regulatory framework and practices comparable to those in the U.S.

11

Unexpected political, regulatory and diplomatic events within the U.S. and abroad may affect investor

and consumer confidence and may adversely impact global financial markets and the broader

economy. Foreign conflicts have caused, and could continue to cause, significant market disruptions

and volatility within specific markets and globally. The hostilities and sanctions resulting from those

hostilities have, and could continue to have, a significant impact on certain Fund investments as well

as Fund performance and liquidity. The economies of the United States and its trading partners, as well

as the financial markets generally, may be adversely impacted by trade disputes and other matters.

ADR Risk.  ADRs are generally subject to the same risks as the foreign securities because their values

depend on the performance of the underlying foreign securities.  In addition, depositary receipts may

not track the price of the underlying foreign securities and their value may change materially at times

when the U.S. markets are not open for trading.  In some cases, there may be less information available

about the underlying issuers than would be the case with a direct investment in the foreign issuer.

ADRs are U.S. dollar-denominated receipts representing shares of foreign-based corporations.

Investment in ADRs may be less liquid than the underlying shares in their primary trading market and

may be more volatile.  Distributions paid to holders of depositary receipts, such as the Fund, may be

subject to a fee charged by the depositary.  In addition, depositary receipts may not pass through

voting or other shareholder rights.

ADRs may be purchased through “sponsored” or “unsponsored” facilities.  A sponsored facility is

established jointly by the issuer of the underlying security and a depositary, whereas a depositary may

establish an unsponsored facility without participation by the issuer of the depositary security. Holders

of unsponsored ADRs generally bear all the costs of such depositary receipts, and the issuers of

unsponsored ADRs frequently are under no obligation to distribute shareholder communications

received from the company that issues the underlying foreign securities or to pass through voting

rights to the holders of the ADRs.  As a result, there may not be a correlation between such

information and the market values of unsponsored ADRs.

Convertible Securities Risk.  Convertible securities are fixed income securities, preferred stocks or

other securities that are convertible into or exercisable for common stock of the issuer (or cash or

securities of equivalent value) at either a stated price or a stated rate.  The market values of convertible

securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline.

A convertible security’s market value, however, tends to reflect the market price of the common stock

of the issuing company when that stock price approaches or is greater than the convertible security’s

“conversion price.”  The conversion price is defined as the predetermined price at which the

convertible security could be exchanged for the associated stock.  As the market price of the

underlying common stock declines, the price of the convertible security tends to be influenced more by

the yield of the convertible security.  Thus, it may not decline in price to the same extent as the

underlying common stock.  In the event of a liquidation of the issuing company, holders of convertible

securities would be paid before the company’s common stockholders but after holders of any senior

debt obligations of the company.  Consequently, the issuer’s convertible securities generally entail less

risk than its common stock but more risk than its debt obligations.

Debt Securities Risks.  Debt securities are subject to the following risks.  Changes in market conditions

and government policies may lead to periods of heightened volatility and reduced liquidity in the

fixed-income securities market, and could result in an increase in Fund redemptions.  Interest rate

changes and their impact on the Fund and its share price can be sudden and unpredictable.

Credit Risk.  Issuers of debt securities may be unable to make principal and interest payments

when they are due. There is also the risk that the securities could lose value because of a loss

of confidence in the ability of the issuer to pay back debt. The degree of credit risk for a

particular security may be reflected in its credit rating. Lower rated debt securities involve

greater credit risk, including the possibility of default or bankruptcy.

Interest Rate Risk. Debt securities could lose value because of interest rate changes.  For

example, bonds tend to decrease in value if interest rates rise.  Debt securities with longer

maturities sometimes offer higher yields, but are subject to greater price shifts as a result of

12

interest rate changes than debt securities with shorter maturities.  The Fund will be exposed to

heightened interest rate risk should interest rates rise. Substantial redemptions from bond and

other income funds may worsen that impact. Other types of securities also may be adversely

affected from an increase in interest rates.

Reinvestment Risk.  If the Fund reinvests the proceeds of matured or sold securities at market

interest rates that are below its portfolio earnings rate, its income will decline.

Prepayment and Extension Risk.  Prepayment occurs when the issuer of a debt security repays

principal prior to the security’s maturity.  During periods of declining interest rates, issuers

may increase pre-payments of principal causing the Fund to invest in debt securities with

lower yields thus reducing income generation.  Similarly, during periods of increasing interest

rates, issuers may decrease prepayments of principal extending the duration of debt securities

potentially to maturity.  This is known as extension risk and may increase the Fund’s

sensitivity to rising rates and its potential for price declines.  Debt securities with longer

maturities are subject to greater price shifts as a result of interest rate changes.  Also, if the

Fund is unable to liquidate lower yielding securities to take advantage of a higher interest rate

environment, its ability to generate income may be adversely affected.  The potential impact of

prepayment features on the price of a debt security can be difficult to predict and result in

greater volatility.

Duration Risk.  The Fund has no set policy regarding the maturity or duration of any or all of

its securities.  Holding long duration and long maturity investments will magnify certain risks,

including interest rate risk and credit risk.

Liquidity Risk. The risk that investments cannot be readily sold at the desired time or price, and the

Fund may have to accept a lower price or may not be able to sell the security at all. An inability to sell

securities can adversely affect the Fund’s value or prevent the Fund from taking advantage of other

investment opportunities. Liquid portfolio investments may become illiquid or less liquid after

purchase by the Fund due to low trading volume, adverse investor perceptions and/or other market

developments. In recent years, the number and capacity of dealers that make markets in fixed income

securities has decreased. Consequently, the decline in dealers engaging in market making trading

activities may increase liquidity risk, which can be more pronounced in periods of market turmoil.

Liquidity risk may be magnified in a rising interest rate environment or when investor redemptions

from fixed income funds may be higher than normal, causing increased supply in the market due to

selling activity. Liquidity risk includes the risk that the Fund will experience significant net

redemptions at a time when it cannot find willing buyers for its portfolio securities or can only sell its

portfolio securities at a material loss.

Below Investment Grade Debt Securities Risk.  Below-investment grade debt securities or unrated

securities of similar credit quality as determined by the Adviser, also sometimes referred to as “junk

bonds,” generally pay a premium above the yields of U.S. government or investment grade debt

securities because they are subject to greater risks. These risks, which reflect their speculative

character, include: greater volatility; greater credit risk and risk of default; potentially greater

sensitivity to general economic or industry conditions; potential lack of attractive resale opportunities

(illiquidity); and additional expenses to seek recovery from issuers who default.  In addition, the prices

of these non-investment grade debt securities are more sensitive to negative developments, such as a

decline in the issuer’s revenues or a general economic downturn, than are the prices of higher grade

securities. Non-investment grade debt securities tend to be less liquid than investment grade debt

securities.

Floating Rate Securities Risk.  Floating (or variable) rate securities are generally less sensitive to

interest rate changes than fixed rate securities.  However, the market value of floating rate securities

may decline when prevailing interest rates rise if their interest rates do not rise as much, or as quickly,

as interest rates in general.  Conversely, floating rate securities will not generally increase in market

value if interest rates decline.  However, when interest rates fall, there will be a reduction in the

payments of interest received by the Fund from its floating rate securities.  Limits on the aggregate

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amount by which a floating rate security’s interest rate may increase over its lifetime or during any one

adjustment period can prevent the interest rate from ever adjusting to prevailing market rates.  The

NAV of the Fund may decline during periods of rising interest rates until the interest rates on these

securities reset to market rates. You could lose money if you sell your shares of the Fund before these

rates reset.

Government-Sponsored Entities Risk.  The Fund may invest in various types of U.S. government

obligations.  U.S. government obligations include securities issued or guaranteed as to principal and

interest by the U.S. government, its agencies or instrumentalities, such as the U.S. Treasury.  Payment

of principal and interest on U.S. government obligations may be backed by the full faith and credit of

the United States or may be backed solely by the issuing or guaranteeing agency or instrumentality

itself.  Investments in debt securities issued by U.S. government sponsored entities such as the Federal

National Mortgage Association, the Federal Home Loan Mortgage Association, and the Federal Home

Loan Banks are not backed by the full faith and credit of the U.S. government.  With respect to these

entities, the investor must look principally to the agency or instrumentality issuing or guaranteeing the

obligation for ultimate repayment, which agency or instrumentality may be privately owned.  There

can be no assurance that the U.S. government would provide financial support to its agencies or

instrumentalities (including government-sponsored enterprises) where it is not obligated to do so.

Municipal Securities Risk.  The municipal market is volatile and can be significantly affected by

adverse tax, legislative or political changes and the financial condition of the issuers of municipal

securities.  Changes in a municipality’s financial health may make it difficult for the municipality to

make interest and principal payments when due.  Municipal obligations may be more susceptible to

downgrades or defaults during recessions or similar periods of economic stress. Municipal securities

structured as revenue bonds are generally not backed by the taxing power of the issuing municipality

but rather the revenue from the particular project or entity for which the bonds were issued.  If the

Internal Revenue Service (“IRS”) determines that an issuer of a municipal security has not complied

with applicable tax requirements, interest from the security could be treated as taxable, which could

result in a decline in the security’s value.  In addition, there could be changes in applicable tax laws or

tax treatments that reduce or eliminate the current federal income tax exemption on municipal

securities or otherwise adversely affect the current federal or state tax status of municipal securities. 

Under some circumstances, municipal securities might not pay interest unless the state legislature or

municipality authorizes money for that purpose.  Some securities, including municipal lease

obligations, carry additional risks.  For example, they may be difficult to trade or interest payments

may be tied only to a specific stream of revenue. 

Because some municipal securities may be secured or guaranteed by banks and other institutions, the

risk to the Fund could increase if the banking or financial sector suffers an economic downturn and/or

if the credit ratings of the institution issuing the guarantee are downgraded or at risk of being

downgraded by a national rating organization.  If such events were to occur, the value of the security

could decrease or the value could be lost entirely, and it may be difficult or impossible for the Fund to

sell the security at the time and the price that normally prevails in the market.  Interest on municipal

obligations, while generally exempt from federal income tax, may not be exempt from federal

alternative minimum tax.

Preferred Stock Risk.  A preferred stock is a blend of the characteristics of a bond and common stock.

It may offer the higher yield of a bond and has priority over common stock in equity ownership, but it

does not have the seniority of a bond and, unlike common stock, its participation in the issuer’s growth

may be limited.  Preferred stock has preference over common stock in the receipt of dividends or in

any residual assets after payment to creditors should the issuer be dissolved or both.  Although the

dividend on a preferred stock may be set at a fixed annual rate, in some circumstances it may be

changed or passed by the issuer.

Sector Risk. To the extent the Fund invests more heavily in particular sectors of the economy, its

performance will be especially sensitive to developments that significantly affect those sectors. The

Fund may, from time to time, have significant exposure to one or more sectors of the economy. To the

14

extent the Fund has significant sector exposures, the Fund will be more susceptible to economic,

political, regulatory, or other developments affecting that sector than a fund with a broader range of

investments.

A description of the Fund’s policies and procedures with respect to the disclosure of the Fund’s

portfolio holdings is available in the Fund’s Statement of Additional Information (“SAI”).

The Trust has entered into an investment advisory agreement (“Advisory Agreement”), on behalf of

the Fund, with Lawson Kroeker Investment Management, Inc. located at 1926 South 67th Street, Suite

201, Omaha, Nebraska 68106.  Established in 1986, the Adviser is an SEC-registered investment

adviser that provides investment advisory services to private clients and institutions. As of

September 30, 2026, the Adviser had approximately $442 million in assets under management. Under

the Advisory Agreement, the Adviser manages the Fund’s investments subject to the supervision of the

Board. 

The Adviser has overall supervisory responsibility for the general management and investment of the

Fund’s securities portfolio.  The Adviser also furnishes the Fund with office space and certain

administrative services and provides most of the personnel needed to fulfill its obligations under its

Advisory Agreement.  For its services, the Fund pays the Adviser a monthly management fee that is

calculated at the annual rate of 0.75% of the Fund’s average daily net assets.

Fund Expenses.  The Fund is responsible for its own operating expenses.  Pursuant to an Operating

Expenses Limitation Agreement between the Adviser and the Trust, on behalf of the Fund, the Adviser

has contractually agreed to waive its management fees and pay Fund expenses in order to ensure that

Total Annual Fund Operating Expenses (excluding front-end or contingent deferred loads, taxes,

leverage/borrowing interest, interest expense, dividends paid on short sales, brokerage commissions,

acquired fund fees and expenses, expenses incurred in connection with any merger or reorganization,

or, extraordinary expenses such as litigation) do not exceed 1.00% of the Fund’s average daily net

assets.  Fees waived and expenses paid by the Adviser may be recouped by the Adviser for a period of

36 months following the month during which such fee waiver and expense payment was made, if such

recoupment can be achieved without exceeding the expense limit in effect at the time the fee waiver

and expense payment occurred and at the time of the recoupment.  The Operating Expenses Limitation

Agreement is indefinite in term and cannot be terminated through at least October 28, 2027.

Thereafter, the agreement may be terminated at any time upon 60 days’ written notice by the Trust’s

Board or the Adviser.

As a result of the Operating Expenses Limitation Agreement the Adviser has with the Fund, the

Adviser was effectively paid a management fee of 0.19% of the Fund’s average daily net assets for the

fiscal year ended June 30, 2026.

A discussion regarding the basis of the Board’s approval of the Fund’s investment advisory contract

with the Adviser is available in the Fund’s report filed on Form N-CSR for the period ended June 30,

2026.

The Fund, as a series of the Trust, does not hold itself out as related to any other series of the Trust for

purposes of investment and investor services, nor does it share the same investment adviser with any

other series.

15

Thomas J. Sudyka, Jr. and Chad C. Clauser are jointly and primarily responsible for the day-to-day

management of the Fund.  Mr. Sudyka has managed the Fund since its inception in 2012. Mr. Clauser

has managed the Fund since October 2023.

Thomas J. Sudyka, Jr., CFA, Managing Director

Mr. Sudyka holds an M.B.A. from the University of Nebraska and a B.S. in Finance from Creighton

University, and he has over thirty years of investment management experience. Before joining the

Adviser in 1999, Mr. Sudyka was a Managing Director and Founding Partner of BPI Global Asset

Management (“BPI”). Prior to founding BPI, Mr. Sudyka was a portfolio manager with several large

Midwest-based investment management companies.

Chad C. Clauser, CFA, Managing Director

Mr. Clauser has over 15 years of investment management experience.  Prior to joining the Adviser in

2015, Mr. Clauser was a senior analyst at Tributary Capital and a Vice President at Credit Suisse in

New York.  He holds a B.S. in Finance from the University of Nebraska – Lincoln and earned the

Chartered Financial Analyst (CFA®) in 2009.

The Fund’s SAI provides additional information about the portfolio managers’ compensation, other

accounts managed by the portfolio managers and the portfolio managers’ ownership of Fund shares.

The price of the Fund’s shares is based on its NAV.  The NAV of the Fund is calculated by dividing its

total assets, less its liabilities, by the number of its shares outstanding.  The NAV is calculated at the

close of regular trading of the NYSE, which is generally 4:00 p.m., Eastern Time.  The NAV will not

be calculated, nor may investors purchase or redeem Fund shares, on days that the NYSE is closed for

trading, even though certain Fund securities (i.e., foreign or debt securities) may trade on days the

NYSE is closed and such trading may materially affect the Fund’s NAV.

The Fund’s assets are generally valued at their market price using valuations provided by independent

pricing services, consistent with the Adviser’s valuation procedures and policies. Pursuant to Rule 2a-5

under the 1940 Act, the Adviser has been designated by the Board as the valuation designee for the

Fund and has been delegated the responsibility for making good faith, fair value determinations with

respect to the Fund’s portfolio securities. Fixed income securities are valued at the mean of the bid and

asked prices as determined by an independent pricing service. When market quotations are not readily

available, or believed by the Adviser to be unreliable, a security or other asset is valued at its fair value

by the Adviser as determined under fair value procedures approved by the Board. The Board reviews,

no less frequently than annually, the adequacy of the policies and procedures of the Fund and the

effectiveness of their implementation.  These fair value pricing procedures will also be used to price a

security when corporate events, events in the securities market and/or world events cause the Adviser

to believe that a security’s last sale price may not reflect its actual market value.  The intended effect

of using fair value pricing procedures is to ensure that the Fund is accurately priced.  The Board will

regularly evaluate whether the Trust’s fair value pricing procedures continue to be appropriate in light

of the specific circumstances of the Fund and the quality of prices obtained through the application of

such procedures.

When fair value pricing is employed, security prices that the Fund uses to calculate its NAV may differ

from quoted or published prices for the same securities.  Due to the subjective and variable nature of

fair value pricing, it is possible that the fair value determined for a particular security may be

materially different (higher or lower) than the price of the security quoted or published by others, the

value when trading resumes, and/or the value realized upon the security’s sale.  Therefore, if a

16

shareholder purchases or redeems Fund shares when the Fund holds securities priced at fair value, the

number of shares purchased or redeemed may be higher or lower than it would be if the Fund was

using market value pricing.

Certain foreign securities may be valued at intraday market values in such foreign markets.

Additionally, in the case of foreign securities, the occurrence of certain events (such as a significant

surge or decline in the U.S. or other markets) after the close of foreign markets, but prior to the time

the Fund’s NAV is calculated will often result in an adjustment to the trading prices of foreign

securities when foreign markets open on the following business day.  If such events occur, the Fund

will value foreign securities at fair value, taking into account such events, in calculating the NAV.  In

such cases, use of fair valuation can reduce an investor’s ability to profit by estimating the Fund’s

NAV in advance of the time the NAV is calculated. The Fund’s investments in smaller or medium

capitalization companies are more likely to require a fair value determination because they may be

more thinly traded and less liquid than securities of larger companies. The Adviser anticipates that the

Fund’s portfolio holdings will be fair valued only if market quotations for those holdings are

unavailable or considered unreliable.

Shares of the Fund are purchased at the NAV per share next calculated after your purchase order is

received in good order by the Fund (as defined below).  Shares may be purchased directly from the

Fund or through a financial intermediary, including but not limited to, certain brokers, financial

planners, financial advisors, banks, insurance companies, retirement, benefit and pension plans or

certain packaged investment products.

Shares of the Fund have not been registered and are not offered for sale outside of the United States.

The Fund generally does not sell shares to investors residing outside the United States, even if they are

United States citizens or lawful permanent residents, except to investors with United States military

APO or FPO addresses or in certain other circumstances where the Chief Compliance Officer and

Anti-Money Laundering Officer for the Trust conclude that such sale is appropriate and is not in

contravention of U.S. law.

A service fee, currently $25, as well as any loss sustained by the Fund, will be deducted from a

shareholder’s account for any purchases that do not clear.  The Fund and U.S. Bancorp Fund Services,

LLC, the Fund’s transfer agent (the “Transfer Agent”), will not be responsible for any losses, liability,

cost or expense resulting from rejecting any purchase order.  Your initial order will not be accepted

until a completed account application (an “Account Application”) is received by the Fund or the

Transfer Agent.

Investment Minimums.  The minimum initial investment amount is $50,000 for regular accounts and

$5,000 for individual retirement accounts, and the minimum investment amount for subsequent

investments is $500.  The Fund reserves the right to waive the minimum initial or subsequent

investment amounts at its discretion.  Shareholders will be given at least 30 days’ written notice of any

increase in the minimum dollar amount of initial or subsequent investments.

Purchases through Financial Intermediaries.  For share purchases through a financial intermediary,

you must follow the procedures established by your financial intermediary.  Your financial

intermediary is responsible for sending your purchase order and payment to the Fund’s Transfer

Agent.  Your financial intermediary holds the shares in your name and receives all confirmations of

purchases and sales from the Fund.  Your financial intermediary may charge for the services that it

provides to you in connection with processing your transaction order or maintaining an account with

them. 

If you place an order for the Fund’s shares through a financial intermediary that is authorized by the

Fund to receive purchase and redemption orders on its behalf (an “Authorized Intermediary”), your

order will be processed at the NAV next calculated after receipt by the Authorized Intermediary,

17

consistent with applicable laws and regulations.  Authorized Intermediaries are authorized to designate

other Authorized Intermediaries to receive purchase and redemption orders on the Fund’s behalf.

If your financial intermediary is not an Authorized Intermediary, your order will be processed at the

NAV next calculated after the Transfer Agent receives your order from your financial intermediary.

Your financial intermediary must agree to send immediately available funds to the Transfer Agent in

the amount of the purchase price in accordance with the Transfer Agent’s procedures.  If payment is

not received in a timely manner, the Transfer Agent may rescind the transaction and your financial

intermediary will be held liable for any resulting fees or losses.  Financial intermediaries that are not

Authorized Intermediaries may set cut-off times for the receipt of orders that are earlier than the cut-

off times established by the Fund.

Purchase Requests Must be Received in Good Order

Your share price will be based on the next NAV per share calculated after the Transfer Agent or your

Authorized Intermediary receives your purchase request in good order.  “Good order” means that your

purchase request includes:

•The name of the Fund;

•The dollar amount of shares to be purchased;

•Your account application or Invest By Mail form that is attached to your confirmation

statement; and

•A check payable to the name of the Fund or a wire transfer received by the Fund.

An Account Application or subsequent order to purchase Fund shares is subject to acceptance by the

Fund and is not binding until so accepted.  The Fund reserves the right to reject any Account

Application or purchase order if, in its discretion, it is in the Fund’s best interest to do so.  For

example, a purchase order may be refused if it appears so large that it would disrupt the management

of the Fund.  Purchases may also be rejected from persons believed to be “market-timers,” as described

under “Tools to Combat Frequent Transactions,” below.  Accounts opened by entities, such as credit

unions, corporations, limited liability companies, partnerships or trusts, will require additional

documentation.  Please note that if any information listed above is missing, your Account Application

will be returned, and your account will not be opened.

Upon acceptance by the Fund, all purchase requests received in good order before the close of the

NYSE (generally 4:00 p.m., Eastern Time) will be processed at the NAV next calculated after receipt.

Purchase requests received after the close of the NYSE will be priced on the next business day.

Purchase by Mail.  To purchase Fund shares by mail, simply complete and sign the Account

Application or investment stub and mail it, along with a check made payable to the Fund, to:

The Fund does not consider the U.S. Postal Service or other independent delivery services to be its

agents.  Therefore, deposit in the mail or with such services, or receipt at the U.S. Bancorp Fund

Services, LLC post office box, of purchase orders or redemption requests does not constitute receipt by

the Transfer Agent.  Receipt of purchase orders or redemption requests is based on when the order is

received at the Transfer Agent’s offices.  All purchase checks must be in U.S. dollars drawn on a

domestic financial institution.  The Fund will not accept payment in cash or money orders.  To prevent

check fraud, the Fund will not accept third party checks, Treasury checks, credit card checks, traveler’s

checks or starter checks for the purchase of shares.  The Fund is unable to accept post-dated checks, or

any conditional order or payment.

18

Purchase by Wire.  If you are making your first investment in the Fund, the Transfer Agent must have

a completed Account Application before you wire the funds.  You can mail or use an overnight service

to deliver your Account Application to the Transfer Agent at the above address.  Upon receipt of your

completed Account Application, the Transfer Agent will establish an account for you.  Once your

account has been established, you may instruct your bank to send the wire.  Prior to sending the wire,

please call the Transfer Agent at 855-698-1378 to advise them of the wire and to ensure proper credit

upon receipt.  Your bank must include the name of the Fund, your name and your account number so

that your wire can be correctly applied.  Your bank should transmit immediately available funds by

wire to:

Wired funds must be received prior to the close of the NYSE (generally 4:00 p.m., Eastern Time) to be

eligible for same day pricing.  The Fund and U.S. Bank, N.A., the Fund’s custodian, are not

responsible for the consequences of delays resulting from the banking or Federal Reserve wire system,

or from incomplete wiring instructions.

Investing by Telephone.  You may not make initial purchases of Fund shares by telephone.  If you

accepted telephone transactions on your Account Application, or have been authorized to perform

telephone transactions by subsequent arrangement in writing with the Fund and your account has been

open for at least 7 business days, you may purchase additional shares by telephoning the Fund toll free

at 855-698-1378.  This option allows investors to move money from their bank account to their Fund

account upon request.  Only bank accounts held at domestic financial institutions that are Automated

Clearing House (“ACH”) members may be used for telephone transactions.  The minimum telephone

purchase amount is $500.  If your order is received prior to the close of the NYSE (generally 4:00

p.m., Eastern Time), shares will be purchased in your account at the NAV determined on the day your

order is placed.  Shareholders may encounter higher than usual call waiting times during periods of

high market activity.  Please allow sufficient time to place your telephone transaction.  The Fund is not

responsible for delays due to communications or transmission outages or failure. Once a telephone

transaction has been placed, it cannot be canceled or modified after the close of regular trading on the

NYSE (generally 4:00 p.m., Eastern Time).

Subsequent Investments.  Subject to the minimum subsequent investment amount described above, you

may add to your account at any time by purchasing shares by mail, telephone, or wire.  You must call

to notify the Fund at 855-698-1378 before wiring.  An Invest by Mail form, which is attached to your

individual confirmation statement, should accompany any investments made through the mail.  All

subsequent purchase requests must include the Fund name and your shareholder account number. If

you do not have the Invest by Mail form from your confirmation statement, include your name,

address, Fund name and account number on a separate piece of paper.

Automatic Investment Plan.  For your convenience, the Fund offers an Automatic Investment Plan

(“AIP”).  Under the AIP, after your initial investment, you may authorize the Fund to automatically

withdraw any amount of at least $500 that you wish to invest in the Fund, on a monthly or quarterly

basis, from your personal checking or savings account.  In order to participate in the AIP, your bank

must be a member of the ACH network.  If you wish to enroll in the AIP, complete the appropriate

section in the Account Application.  The Fund may terminate or modify this privilege at any time. You

may terminate your participation in the AIP at any time by notifying the Transfer Agent five days prior

to the next scheduled investment.  A fee will be charged if your bank does not honor the AIP draft for

any reason.

19

Anti-Money Laundering Program.  The Trust has established an Anti-Money Laundering Compliance

Program (the “Program”) as required by the Uniting and Strengthening America by Providing

Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT

Act”) and related anti-money laundering laws and regulations.  To ensure compliance with these laws,

the Account Application asks for, among other things, the following information for all “customers”

seeking to open an “account” (as those terms are defined in rules adopted pursuant to the USA

PATRIOT Act):

•Full name;

•Date of birth (individuals only);

•Social Security or taxpayer identification number; and

•Permanent street address (a P.O. Box number alone is not acceptable).

In compliance with the USA PATRIOT Act and other applicable anti-money laundering laws and

regulations, please note that the Transfer Agent will verify certain information on your account

application as part of the Program.  As requested on the account application, you must supply your full

name, date of birth, social security number and permanent street address. If you are opening the

account in the name of a legal entity (e.g., partnership, limited liability company, business trust,

corporation, etc.), you must also supply the identity of the beneficial owners. Mailing addresses

containing only a P.O. Box will not be accepted.  The Fund reserves the right to request additional

clarifying information and may close your account if such clarifying information is not received by the

Fund within a reasonable time of the request or if the Fund cannot form a reasonable belief as to your

true identity.  If you require additional assistance when completing your application, please contact the

Transfer Agent at 855-698-1378.

Cancellations and Modifications.  The Fund will not accept a request to cancel or modify a written

transaction once processing has begun.  Please exercise care when placing a transaction request.

In general, orders to sell or “redeem” shares may be placed directly with the Fund or through a

financial intermediary.  You may redeem all or part of your investment in the Fund’s shares on any

business day that the Fund calculates its NAV. 

However, if you originally purchased your shares through a financial intermediary, your redemption

order must be placed with the same financial intermediary in accordance with their established

procedures.  Your financial intermediary is responsible for sending your order to the Transfer Agent

and for crediting your account with the proceeds.  Your financial intermediary may charge for the

services that they provide to you in connection with processing your transaction order or maintaining

an account with them.

Shareholders who have an IRA or other retirement plan must indicate on their written redemption

request whether to withhold federal income tax.  Redemption requests failing to indicate an election

not to have tax withheld will generally be subject to 10% withholding. Shares held in IRA or other

retirement plan accounts may be redeemed by telephone at 855-698-1378.  Investors will be asked

whether or not to withhold taxes from any distribution.

Payment of Redemption Proceeds.  You may redeem your Fund shares at the NAV per share next

determined after the Transfer Agent or an Authorized Intermediary receives your redemption request

in good order.  Your redemption request cannot be processed on days the NYSE is closed.  All

requests received by the Fund in good order after the close of the regular trading session of the NYSE

(generally 4:00 p.m., Eastern time) will usually be processed on the next business day.  Under normal

circumstances, the Fund expects to meet redemption requests through the sale of investments held in

cash or cash equivalents.  In situations in which investment holdings in cash or cash equivalents are

not sufficient to meet redemption requests, the Fund may also choose to sell portfolio assets for the

purpose of meeting such requests.  The Fund further reserves the right to distribute “in-kind” securities

20

from the Fund’s portfolio in lieu (in whole or in part) of cash under certain circumstances, including

under stressed market conditions. Redemptions-in-kind are discussed in greater detail below.

A redemption request will be deemed in “good order” if it includes:

•The shareholder’s name;

•The name of the Fund;

•The account number;

•The share or dollar amount to be redeemed; and

•Signatures by all shareholders on the account and signature guarantee(s), if applicable.

Additional documents are required for certain types of redemptions, such as redemptions from

accounts held by credit unions, corporations, limited liability companies, or partnerships, or from

accounts with executors, trustees, administrators or guardians.  Please contact the Transfer Agent to

confirm the requirements applicable to your specific redemption request.  Redemption requests that do

not have the required documentation will be rejected.

While redemption proceeds may be paid by check sent to the address of record, the Fund is not

responsible for interest lost on such amounts due to lost or misdirected mail.  Redemption proceeds

may be wired to your pre-established bank account, or proceeds may be sent via electronic funds

transfer through the ACH network using the bank instructions previously established for your account.

The Fund typically sends the redemption proceeds on the next business day (a day when the NYSE is

open for normal business) after the redemption request is received in good order and prior to market

close, regardless of whether the redemption proceeds are sent via check, wire, or automated clearing

house (ACH) transfer.  Wires are subject to a $15 fee.  There is no charge to have proceeds sent via

ACH; however, funds are typically credited to your bank within two to three days after redemption.

Except as set forth below, proceeds will be paid within seven calendar days after the Fund receives

your redemption request.  Under unusual circumstances, the Fund may suspend redemptions, or

postpone payment for up to seven days, as permitted by federal securities law.

Please note that if the Transfer Agent has not yet collected payment for the shares you are redeeming,

and if you did not purchase your shares with a wire payment, the Transfer Agent may delay payment

of your redemption proceeds for up to 12 calendar days from the date of purchase or until your

payment has cleared, whichever comes first.  Furthermore, there are certain times when you may be

unable to sell Fund shares or receive proceeds.  Specifically, the Fund may suspend the right to redeem

shares or postpone the date of payment upon redemption for more than seven calendar days: (1) for

any period during which the NYSE is closed (other than customary weekend or holiday closings) or

trading on the NYSE is restricted; (2) for any period during which an emergency exists as a result of

which disposal by the Fund of its securities is not reasonably practicable or it is not reasonably

practicable for the Fund to fairly determine the value of its net assets; or (3) for such other periods as

the SEC may by order permit for the protection of shareholders.  Your ability to redeem shares by

telephone will be restricted for 15 calendar days after you change your address.  You may change your

address at any time by telephone or written request, addressed to the Transfer Agent.  Confirmations of

an address change will be sent to both your old and new address.

Signature Guarantee.  Redemption proceeds will be sent to the address of record.  The Transfer Agent

may require a signature guarantee for certain redemption requests.  A signature guarantee assures that

your signature is genuine and protects you from unauthorized account redemptions.  Signature

guarantees can be obtained from domestic banks, brokers, dealers, credit unions, national securities

exchanges, registered securities associations, clearing agencies and savings associations, as well as

from participants in the New York Stock Exchange Medallion Signature Program and the Securities

Transfer Agents Medallion Program (“STAMP”), but not from a notary public.  A signature guarantee,

from either a Medallion program member or a non-Medallion program member, is required of each

owner in the following situations:

21

•If ownership is being changed on your account;

•When redemption proceeds are payable or sent to any person, address or bank account not on

record;

•When a redemption is received by the Transfer Agent and the account address has changed

within the last 15 calendar days;

•For all redemptions in excess of $100,000 from any shareholder account.

Non-financial transactions, including establishing or modifying the ability to purchase and redeem

Fund shares by telephone and certain other services on an account, may require a signature guarantee,

signature verification from a Signature Validation Program member, or other acceptable form of

authentication from a financial institution source.

In addition to the situations described above, the Fund and/or the Transfer Agent reserve the right to

require a signature guarantee or other acceptable signature verification in other instances based on the

circumstances relative to the particular situation. 

Redemption by Mail.  You may execute most redemptions by furnishing an unconditional written

request to the Fund to redeem your shares at the current NAV per share upon receipt by the Fund of

such request.  Written redemption requests should be sent to the Transfer Agent at:

The Fund does not consider the U.S. Postal Service or other independent delivery services to be its

agents. Therefore, deposit in the mail or with such services, or receipt at the U.S. Bancorp Fund

Services, LLC post office box, of purchase orders or redemption requests does not constitute receipt by

the Transfer Agent of the Fund. Receipt of purchase orders or redemption requests is based on when

the order is received at the Transfer Agent’s offices.

Wire Redemption.  Wire transfers may be arranged to redeem shares.  However, the Transfer Agent

charges a fee, currently $15, per wire redemption against your account on dollar specific trades, and

from proceeds on complete redemptions and share-specific trades.

Telephone Redemption.  If you accepted telephone transactions on your Account Application or have

been authorized to perform telephone transactions by subsequent arrangement in writing with the

Fund, you may redeem shares, in amounts of $100,000 or less, by instructing the Fund by telephone at

855-698-1378.  Investors in an IRA or other retirement plan will be asked whether or not to withhold

federal income tax.

In order to qualify for, or to change, telephone redemption privileges on an existing account, a

signature guarantee, signature verification from a Signature Validation Program member, or other

acceptable form of authentication from a financial institution source may be required of all

shareholders in order to qualify for, or to change, telephone redemption privileges on an existing

account.  Telephone redemptions will not be made if you have notified the Transfer Agent of a change

of address within 15 calendar days before the redemption request.  Shareholders may encounter higher

than usual call waiting times during periods of high market activity.  Please allow sufficient time to

place your telephone transaction.  The Fund is not responsible for delays due to communication or

transmission outages or failures.

Note:  Neither the Fund nor any of its service providers will be liable for any loss or expense in acting

upon instructions that are reasonably believed to be genuine.  To confirm that all telephone instructions

are genuine, the Fund will use reasonable procedures, such as requesting that you correctly state:

22

•Your Fund account number;

•The name in which your account is registered; and/or

•The Social Security or taxpayer identification number under which the account is registered.

If an account has more than one owner or person authorized to perform transactions, the Fund will

accept telephone instructions from any one owner or authorized person.

Systematic Withdrawal Program.  The Fund offers a systematic withdrawal plan (“SWP”) whereby

shareholders or their representatives may request a redemption in a specific dollar amount of at least

$100 be sent to them each month, calendar quarter or annually.  Investors may choose to have a check

sent to the address of record, or proceeds may be sent to a pre-designated bank account via the ACH

network.  To start this program, your account must have Fund shares with a value of at least $10,000.

This program may be terminated or modified by the Fund at any time.  Any request to change or

terminate your SWP should be communicated in writing or by telephone to the Transfer Agent no later

than five days before the next scheduled withdrawal.  A withdrawal under the SWP involves

redemption of Fund shares, and may result in a gain or loss for federal income tax purposes.  In

addition, if the amount requested to be withdrawn exceeds the rate of growth of assets in your account,

including any dividends credited to your account, the account will ultimately be depleted.  To establish

the SWP, complete the SWP section of the Account Application.  Please call 855-698-1378 for

additional information regarding the SWP.

The Fund’s Right to Redeem an Account.  The Fund reserves the right to redeem the shares of any

shareholder whose account balance is less than $2,500, other than as a result of a decline in the NAV

of the Fund.  The Fund will provide a shareholder with written notice 30 days prior to redeeming the

shareholder’s account.

Redemption-in-Kind.  The Fund generally pays redemption proceeds in cash.  However, under unusual

conditions that make the payment of cash unwise (and for the protection of the Fund’s remaining

shareholders), the Fund may pay all or part of a shareholder’s redemption proceeds in portfolio

securities with a market value equal to the redemption price (redemption-in-kind).

Specifically, if the amount you are redeeming from the Fund during any 90-day period is in excess of

the lesser of $250,000 or 1% of the Fund’s net assets, valued at the beginning of such period, the Fund

has the right to redeem your shares by giving you the amount that exceeds this threshold in securities

instead of cash.  If the Fund pays your redemption proceeds by a distribution of securities, you could

incur brokerage or other charges in converting the securities to cash, and you may incur a taxable

capital gain or loss as a result of the distribution.  In addition, you will bear any market risks associated

with such securities until they are converted into cash.

Cancellations and Modifications.  The Fund will not accept a request to cancel or modify a written

transaction once processing has begun.  Please exercise care when placing a transaction request.

The Fund will make distributions of net investment income and net capital gains, if any, at least

annually, typically during the month of December.  The Fund may make additional distributions if

deemed to be desirable at other times during the year.

All distributions will be reinvested in Fund shares unless you choose one of the following options:

(1) receive distributions of net capital gains in cash, while reinvesting net investment income

distributions in additional Fund shares; (2) receive all distributions in cash; or (3) reinvest net capital

gain distributions in additional Fund shares, while receiving distributions of net investment income in

cash.

If you wish to change your distribution option, write or call the Transfer Agent in advance of the

payment date of the distribution.  However, any such change will be effective only as to distributions

23

for which the record date is five or more calendar days after the Transfer Agent has received your

request.

If you elect to receive distributions in cash and the U.S. Postal Service is unable to deliver your check,

or if a check remains uncashed for six months, the Fund reserves the right to reinvest the distribution

check in your account at the Fund’s then current NAV per share and to reinvest all subsequent

distributions.

The Fund is intended for long-term investors.  Short-term “market-timers” who engage in frequent

purchases and redemptions may disrupt the Fund’s investment program and create additional

transaction costs that are borne by all of the Fund’s shareholders.  The Board has adopted policies and

procedures that are designed to discourage excessive, short-term trading and other abusive trading

practices that may disrupt portfolio management strategies and harm performance.  The Fund takes

steps to reduce the frequency and effect of these activities in the Fund.  These steps include, among

other things, monitoring trading activity and using fair value pricing.  Although these efforts are

designed to discourage abusive trading practices, these tools cannot eliminate the possibility that such

activity will occur.  The Fund implements these tools to the best of its ability and in a manner that it

believes is consistent with shareholder interests.  Except as noted herein, the Fund applies all

restrictions uniformly in all applicable cases.

Monitoring Trading Practices.  The Fund monitors selected trades in an effort to detect excessive

short-term trading activities.  If, as a result of this monitoring, the Fund believes that a shareholder has

engaged in excessive short-term trading, it may, in its discretion, ask the shareholder to stop such

activities or refuse to process purchases in the shareholder’s accounts.  In making such judgments, the

Fund seeks to act in a manner that it believes is consistent with the best interests of its shareholders.

The Fund uses a variety of techniques to monitor for and detect abusive trading practices.  These

techniques may change from time to time as determined by the Fund in its sole discretion.  To

minimize harm to the Fund and its shareholders, the Fund reserves the right to reject any purchase

order (but not a redemption request), in whole or in part, for any reason and without prior notice.  The

Fund may decide to restrict purchase and sale activity in its shares based on various factors, including

whether frequent purchase and sale activity will disrupt portfolio management strategies and adversely

affect Fund performance.

Fair Value Pricing.  The Fund employs fair value pricing selectively to ensure greater accuracy in its

daily NAV and to prevent dilution by frequent traders or market timers who seek to take advantage of

temporary market anomalies.  The Board has developed procedures which utilize fair value pricing

when reliable market quotations are not readily available or when corporate events, events in the

securities market and/or world events cause the Adviser to believe that a security’s last sale price may

not reflect its actual market value.  Valuing securities at fair value involves reliance on judgment.  Fair

value determinations are made in good faith in accordance with procedures adopted by the Board.

There can be no assurance that the Fund will obtain the fair value assigned to a security if it were to

sell the security at approximately the time at which the Fund determines its NAV per share.  More

detailed information regarding fair value pricing can be found in this Prospectus under the heading

entitled “Pricing of Fund Shares.”

Due to the complexity and subjectivity involved in identifying abusive trading activity and the volume

of shareholder transactions the Fund handles, there can be no assurance that the Fund’s efforts will

identify all trades or trading practices that may be considered abusive.  In particular, since the Fund

receives purchase and sale orders through Authorized Intermediaries that use group or omnibus

accounts, the Fund cannot always detect frequent trading.  However, the Fund will work with

Authorized Intermediaries as necessary to discourage shareholders from engaging in abusive trading

practices and to impose restrictions on excessive trades.  In this regard, the Fund has entered into

information sharing agreements with Authorized Intermediaries pursuant to which these intermediaries

24

are required to provide to the Fund, at the Fund’s request, certain information relating to their

customers investing in the Fund through non-disclosed or omnibus accounts.  The Fund will use this

information to attempt to identify abusive trading practices.  Authorized Intermediaries are

contractually required to follow any instructions from the Fund to restrict or prohibit future purchases

from shareholders that are found to have engaged in abusive trading in violation of the Fund’s policies.

However, the Fund cannot guarantee the accuracy of the information provided to it from Authorized

Intermediaries and cannot ensure that it will always be able to detect abusive trading practices that

occur through non-disclosed and omnibus accounts.  As a result, the Fund’s ability to monitor and

discourage abusive trading practices in non-disclosed and omnibus accounts may be limited.

The following is a summary of certain important tax issues that affect the Fund and its shareholders.

The summary is based on current tax law, which may be changed by legislative, judicial or

administrative action. The summary is very general, and does not address investors subject to special

rules, such as investors who hold shares through an IRA, 401(k) or other tax-advantaged accounts.

More information about taxes is located in the SAI.

You are urged to consult your tax advisor regarding specific questions as to U.S. federal, state and

local income taxes.

The Fund has elected and intends to qualify each year for the special tax treatment afforded to a

regulated investment company (“RIC”) under the Code. As long as the Fund qualifies for treatment as

a RIC, it pays no federal income tax on the earnings it timely distributes to shareholders. However, the

Fund’s failure to qualify as a RIC or to meet minimum distribution requirements would result, if

certain relief provisions were unavailable, in fund-level taxation, thereby reducing the income

available for distribution to shareholders.

Unless you are a tax-exempt entity or your investment in Fund shares is made through a tax-deferred

retirement account, such as an IRA, you need to be aware of the possible tax consequences when:

•the Fund makes distributions; and

•you sell Fund shares.

Distributions of the Fund’s net investment company taxable income (which includes, but is not limited

to, interest, dividends, net short-term capital gains and net gains from foreign currency transactions), if

any, are generally taxable to the Fund’s shareholders as ordinary income. To the extent that the Fund’s

distributions of net investment company taxable income are designated as attributable to “qualified

dividend” income, such income may be subject to tax at the reduced rate of federal income tax

applicable to non-corporate shareholders for net long-term capital gains, if certain holding period

requirements have been satisfied by the shareholder. Qualified dividend income is, in general, dividend

income from taxable domestic corporations and certain foreign corporations (e.g., foreign corporations

incorporated in a possession of the United States or eligible for benefits under certain comprehensive

income tax treaties with the United States, or foreign corporations with respect to dividends paid on

stock that is readily tradable on an established securities market in the United States). Certain of the

Fund’s investment strategies may limit its ability to make distributions eligible for the reduced rates

applicable to qualified dividend income.

To the extent the Fund’s distributions of net investment company taxable income are attributable to net

short-term capital gains, such distributions will be treated as ordinary dividend income for the

purposes of income tax reporting and will not be available to offset a shareholder’s capital losses from

other investments.

Distributions of net capital gains (net long-term capital gains less net short-term capital losses) are

generally taxable as long-term capital gains (currently at a maximum federal rate of 20% for individual

shareholders in the highest income bracket) regardless of the length of time that a shareholder has

25

owned Fund shares, unless you are a tax-exempt organization or are investing through a tax-

advantaged arrangement such as a 401(k) plan or IRA. Distributions by the Fund that are not paid from

its earnings and profits will be treated as a return of capital, which is applied against and will reduce

the adjusted tax basis of your shares (but not below zero) and, after such adjusted tax basis is reduced

to zero, be treated as a gain from the sale or exchange of shares.

If at least 50% of the value of the Fund’s total assets at the close of each quarter of its taxable years

consists of debt obligations that generate interest exempt from U.S. federal income tax, then the Fund

may qualify to pass through to its shareholders the tax-exempt character of its income from such debt

obligations by paying tax-exempt interest dividends. Based on the Fund’s investment strategies, the

Fund does not expect to pass through to its shareholders the tax-exempt character of its income from

such debt obligations.

A RIC that receives business interest income may pass through its net business interest income for

purposes of the tax rules applicable to the interest expense limitations under Section 163(j) of the

Code. A RIC’s total “Section 163(j) Interest Dividend” for a tax year is limited to the excess of the

RIC’s business interest income over the sum of its business interest expense and its other deductions

properly allocable to its business interest income. A RIC may, in its discretion, designate all or a

portion of ordinary dividends as Section 163(j) Interest Dividends, which would allow the recipient

shareholder to treat the designated portion of such dividends as interest income for purposes of

determining such shareholder’s interest expense deduction limitation under Section 163(j) of the Code.

This can potentially increase the amount of a shareholder’s interest expense deductible under Section

163(j) of the Code. In general, to be eligible to treat a Section 163(j) Interest Dividend as interest

income, you must have held your shares in the Fund for more than 180 days during the 361-day period

beginning on the date that is 180 days before the date on which the share becomes ex-dividend with

respect to such dividend. Section 163(j) Interest Dividends, if so designated by the Fund, will be

reported to your financial intermediary or otherwise in accordance with the requirements specified by

the IRS.

U.S. individuals generally are subject to a 3.8% tax on the lesser of their “net investment income,”

which includes interest, dividends, and certain capital gains (including certain capital gain distributions

and capital gains realized on the sale of shares of the Fund) and the amount by which their modified

adjusted gross income exceeds $250,000 for married individuals filing jointly and qualifying surviving

spouses, $125,000 for married individuals filing separately, and $200,000 for other individuals. This

3.8% tax on net investment income (including capital gains and dividends) will also be imposed on

certain estates and trusts, subject to certain income thresholds.

You will be taxed in the same manner whether you receive your distributions (whether of net

investment company taxable income or net capital gains) in cash or reinvest them in additional Fund

shares. Distributions are generally taxable when received. However, distributions declared in October,

November or December to shareholders of record on a date in such a month and paid the following

January are taxable as if received on December 31.

The Fund may invest in foreign securities and therefore may be subject to foreign withholding taxes

with respect to dividends or interest the Fund receives from sources in foreign countries. If the Fund

qualifies to pass through to you the tax benefits from foreign taxes it pays on its investments, and

elects to do so, then you must include your share of the eligible foreign taxes in gross income and may

be entitled, subject to applicable limitations, to a foreign tax credit or deduction for those taxes.

A shareholder who sells or redeems shares generally will have a capital gain or loss from the sale or

redemption assuming the shareholder holds shares as a capital asset. The amount of the gain or loss

and the applicable rate of federal income tax will depend generally upon the amount paid for the

shares, the amount of reinvested taxable distributions, if any, the amount received from the sale or

redemption and how long the shares were held by a shareholder. Any loss arising from the sale or

redemption of shares held for six months or less, however, is treated as a long-term capital loss to the

extent of any amounts treated as distributions of net capital gain received on such shares. In

determining the holding period of such shares for this purpose, any period during which your risk of

26

loss is offset by means of options, short sales or similar transactions is not counted.  If you purchase

Fund shares within 30 days before or after redeeming other Fund shares at a loss, all or part of that loss

will not be deductible and will instead increase the basis of the newly purchased shares.

Shareholders will be advised annually as to the federal tax status of all distributions made by the Fund

for the preceding year. Distributions by the Fund and gains from the sale of Fund shares may also be

subject to state and local taxes. Additional tax information may be found in the SAI.

The Fund may be required to withhold at the 24% backup withholding rate (as “backup withholding”)

on certain reportable payments to a shareholder if (1) the shareholder fails to furnish a taxpayer

identification number in the required manner, (2) the Fund is notified that the taxpayer identification

number furnished by the shareholder is incorrect or, with respect to reportable interest or dividend

payments, (3) the Fund is notified that the shareholder is subject to backup withholding because of

underreporting of interest or dividends, or (4) the shareholder fails to certify, when required, that the

shareholder is not subject to backup withholding. Backup withholding generally will not apply to a

shareholder that properly establishes its foreign status under applicable IRS documentation

requirements.

This section assumes you are a U.S. shareholder and is not intended to be a full discussion of federal

tax laws and the effect of such laws on you. There may be other federal, state, foreign or local tax

considerations applicable to a particular investor. You are urged to consult your own tax advisor.

Telephone Transactions.  If you accepted telephone transactions on your Account Application or have

been authorized to perform telephone transactions by subsequent arrangement in writing with the

Fund, you may be responsible for fraudulent telephone orders made to your account as long as the

Fund has taken reasonable precautions to verify your identity.  In addition, once you place a telephone

transaction request, it cannot be canceled or modified after the close of regular trading on the NYSE

(generally, 4:00 p.m. Eastern Time).

During periods of significant economic or market change, telephone transactions may be difficult to

complete. If you are unable to contact the Fund by telephone, you may also mail the requests to the

Fund at the address listed previously in the “How to Purchase Fund Shares” section.

Telephone trades must be received by or prior to the close of the NYSE (generally 4:00 p.m., Eastern

Time).  Please allow sufficient time to ensure that you will be able to complete your telephone

transaction prior to the close of the NYSE.

Policies of Other Financial Intermediaries.  Financial intermediaries may establish policies that differ

from those of the Fund.  For example, the institution may charge transaction fees, set higher minimum

investments or impose certain limitations on buying or selling shares in addition to those identified in

this Prospectus.  Please contact your financial intermediary for details.

Closing the Fund.  The Board retains the right to close (or partially close) the Fund to new purchases if

it is determined to be in the best interest of the Fund’s shareholders.  Based on market and Fund

conditions, and in consultation with the Adviser, the Board may decide to close the Fund to new

investors, all investors or certain classes of investors (such as fund supermarkets) at any time.  If the

Fund is closed to new purchases it will continue to honor redemption requests, unless the right to

redeem shares has been temporarily suspended as permitted by federal law.

Householding.  In an effort to decrease costs, the Fund intends to reduce the number of duplicate

prospectuses and certain other shareholder documents you receive by sending only one copy of each to

those addresses shared by two or more accounts and to shareholders the Fund reasonably believes are

from the same family or household.  If you would like to discontinue householding for your accounts,

please call toll-free at 855-698-1378 to request individual copies of these documents.  Once the Fund

27

receives notice to stop householding, the Fund will begin sending individual copies 30 days after

receiving your request.  This Householding policy does not apply to account statements.

Lost Shareholders, Inactive Accounts and Unclaimed Property.  It is important that the Fund maintains

a correct address for each shareholder.  An incorrect address may cause a shareholder’s account

statements and other mailings to be returned to the Fund.  Based upon statutory requirements for

returned mail, the Fund will attempt to locate the shareholder or rightful owner of the account.  If the

Fund is unable to locate the shareholder, then they will determine whether the shareholder’s account

can legally be considered abandoned.  Your mutual fund account may be transferred to the state

government of your state of residence if no activity occurs within your account during the “inactivity

period” specified in your state’s abandoned property laws.  The Fund is legally obligated to escheat (or

transfer) abandoned property to the appropriate state’s unclaimed property administrator in accordance

with statutory requirements.  The shareholder’s last known address of record determines which state

has jurisdiction. Please proactively contact the Transfer Agent toll-free at 855-698-1378 at least

annually to ensure your account remains in active status.

If you are a resident of the state of Texas, you may designate a representative to receive notifications

that, due to inactivity, your mutual fund account assets may be delivered to the Texas Comptroller.

Please contact the Transfer Agent if you wish to complete a Texas Designation of Representative form.

Quasar Distributors, LLC (the “Distributor”), a wholly owned subsidiary of Foreside Financial Group,

LLC (dba ACA Group), is located at 190 Middle Street, Suite 301, Portland, ME 04101, and serves as

distributor and principal underwriter to the Fund.  The Distributor is a registered broker-dealer and

member of the Financial Industry Regulatory Authority, Inc.  Shares of the Fund are offered on a

continuous basis.

The Fund may pay service fees to intermediaries, such as banks, broker-dealers, financial advisors or

other financial institutions, including affiliates of the Adviser, for sub-administration, sub-transfer

agency and other shareholder services associated with shareholders whose shares are held of record in

omnibus accounts, other group accounts or accounts traded through registered securities clearing

agents.

The Adviser, out of its own resources and without additional cost to the Fund or its shareholders, may

provide additional cash payments to intermediaries who sell shares of the Fund.  These payments and

compensation are in addition to service fees paid by the Fund, if any.  Payments are generally made to

intermediaries that provide shareholder servicing, marketing support or access to sales meetings, sales

representatives and management representatives of the intermediary.  Payments may also be paid to

intermediaries for inclusion of the Fund on a sales list, including a preferred or select sales list or in

other sales programs.  Compensation may be paid as an expense reimbursement in cases in which the

intermediary provides shareholder services to the Fund.  The Adviser may also pay cash compensation

in the form of finder’s fees that vary depending on the dollar amount of the shares sold.

28

The financial highlights in the following table are intended to help you understand the financial

performance of the Fund for the fiscal years indicated.  Certain information reflects financial results

for a single Fund share.  The total return in the table represents the rate that an investor would have

earned or lost on an investment in the Fund (assuming reinvestment of all dividends and distributions).

This information has been derived from the financial statements audited by Cohen & Company, Ltd.,

the Fund’s independent registered public accounting firm, whose report, along with the Fund’s

financial statements, are included in the annual report, which is available upon request or on the

Fund’s website at https://lkfunds.com/.

29

(a)Net investment income per share has been calculated based on average shares outstanding during the year.

(b)Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to

reconcile the change in net asset value per share for the years and may not reconcile with the aggregate

gains and losses in the Statement of Operations due to share transactions for the years.

30

Investment Adviser

Lawson Kroeker Investment Management, Inc.

1926 South 67th Street, Suite 201

Omaha, Nebraska 68106

Independent Registered Public Accounting Firm

Cohen & Company, Ltd.

875 E Wisconsin Avenue, Suite 210

Milwaukee, Wisconsin 53202

Legal Counsel

Morgan, Lewis & Bockius LLP

1111 Pennsylvania Avenue, NW

Washington, D.C. 20004

Custodian

U.S. Bank N.A.

Custody Operations

1555 North Rivercenter Drive, Suite 302

Milwaukee, Wisconsin 53212

Transfer Agent, Fund Accountant and Fund Administrator

U.S. Bancorp Fund Services, LLC

615 East Michigan Street

Milwaukee, Wisconsin 53202

Distributor

Quasar Distributors, LLC

190 Middle Street, Suite 301

Portland, ME 04101

The Fund collects only relevant information about you that the law allows or requires it to have in

order to conduct its business and properly service you.  The Fund collects financial and personal

information about you (“Personal Information”) directly (e.g., information on account applications and

other forms, such as your name, address, and social security number, and information provided to

access account information or conduct account transactions online, such as password, account number,

e-mail address, and alternate telephone number), and indirectly (e.g., information about your

transactions with us, such as transaction amounts, account balance and account holdings).

The Fund does not disclose any non-public personal information about its shareholders or former

shareholders other than for everyday business purposes such as to process a transaction, service an

account, respond to court orders and legal investigations or as otherwise permitted by law.  Third

parties that may receive this information include companies that provide transfer agency, technology

and administrative services to the Fund, as well as the Fund’s investment adviser who is an affiliate of

the Fund.  If you maintain a retirement/educational custodial account directly with the Fund, we may

also disclose your Personal Information to the custodian for that account for shareholder servicing

purposes.  The Fund limits access to your Personal Information provided to unaffiliated third parties to

information necessary to carry out their assigned responsibilities to the Fund.  All shareholder records

will be disposed of in accordance with applicable law.  The Fund maintains physical, electronic and

procedural safeguards to protect your Personal Information and requires its third-party service

providers with access to such information to treat your Personal Information with the same high degree

of confidentiality.

In the event that you hold shares of the Fund through a financial intermediary, including, but not

limited to, a broker-dealer, bank, credit union or trust company, the privacy policy of your financial

intermediary governs how your non-public personal information is shared with unaffiliated third

parties.

LK Balanced Fund

A series of Managed Portfolio Series

You can find more information about the Fund in the following documents:

Statement of Additional Information

The SAI provides additional details about the investments and techniques of the Fund and certain other

additional information.  A current SAI is on file with the SEC and is incorporated into this Prospectus

by reference.  This means that the SAI is legally considered a part of this Prospectus even though it is

not physically within this Prospectus.

Annual and Semi-Annual Reports

The Fund’s annual and semi-annual reports and Form N-CSR provide additional information about the

Fund’s investments.  The annual reports contain a discussion of the market conditions and investment

strategies that significantly affected the Fund’s performance during the Fund’s prior fiscal year. In

Form N-CSR, you will find the Fund's annual and semi-annual financial statements.

You can obtain a free copy of these documents and the SAI, request other information, such as the

Fund’s financial statements, or make general inquiries about the Fund by calling the Fund (toll-free) at

855-698-1378, by visiting the Adviser’s website at https://lkfunds.com/ or by writing to:

LK Balanced Fund

c/o U.S. Bank Global Fund Services

P.O. Box 219252

Kansas City, MO 64121-9252

You can review and copy information, including the Fund’s reports and SAI:

•Free of charge from the SEC’s EDGAR database on the SEC’s Internet website at http://

www.sec.gov; or

•For a fee, by electronic request at the following e-mail address: [email protected].

Institutional Class – LKBLX

Statement of Additional Information

October 28, 2026

This Statement of Additional Information (“SAI”) provides general information about the LK

Balanced Fund (the “Fund”), a series of Managed Portfolio Series (the “Trust”).  This SAI is not a

prospectus and should be read in conjunction with the Fund’s current prospectus dated October 28,

2026 (the “Prospectus”), as supplemented and amended from time to time.  In addition, the Fund’s

financial statements for the fiscal year ended June 30, 2026 are incorporated herein by reference to

the Fund’s certified shareholder report on Form N-CSR for the fiscal year ended June 30, 2026.  To

obtain a copy of the Prospectus and/or annual report, free of charge, please write or call the Fund at

the address or toll-free telephone number below, or visit the Fund’s website at https://lkfunds.com/.

LK Balanced Fund

c/o U.S. Bank Global Fund Services

P.O. Box 219252

Kansas City, MO 64121-9252

855-698-1378

TABLE OF CONTENTS

1

The Trust and the Fund

The Trust is a Delaware statutory trust organized on January 27, 2011, and is registered with the U.S.

Securities and Exchange Commission (“SEC”) as an open-end management investment company.

The Fund is one series, or mutual fund, of the Trust. Prior to July 1, 2012, the Fund’s investment

adviser managed a limited partnership with an investment objective and investment policies that

were, in all material respects, equivalent to those of the Fund. The limited partnership, which incepted

on December 31, 1986, converted into, and the Fund commenced operations in, the Trust on July 1,

2012. The Fund has one class of shares: Institutional Class. The Fund is a diversified series and has

its own investment objective and policies. Shares of other series of the Trust are offered in separate

prospectuses and SAIs. The Fund does not hold itself out as related to any other series within the

Trust for purposes of investment and investor services, nor does it share the same investment adviser

with any other series of the Trust. The Fund’s Prospectus and this SAI are a part of the Trust’s

Registration Statement filed with the SEC. Copies of the Trust’s complete Registration Statement

may be obtained from the SEC upon payment of the prescribed fee, or may be accessed free of charge

at the SEC’s website at https://www.sec.gov/. As permitted by Delaware law, the Trust’s Board of

Trustees (the “Board”) may create additional classes of the Fund and may create additional series

(and classes thereof) of the Trust and offer shares of these series and classes under the Trust at any

time without the vote of shareholders. 

All shares of a series shall represent an equal proportionate interest in the assets held with respect to

that series (subject to the liabilities held with respect to that series and such rights and preferences as

may have been established and designated with respect to classes of shares of such series), and each

share of a series shall be equal to each other share of that series.

Shares are voted in the aggregate and not by series or class, except in matters where a separate vote is

required by the Investment Company Act of 1940, as amended (the “1940 Act”), or when the matters

affect only the interest of a particular series or class.  When matters are submitted to shareholders for

a vote, each shareholder is entitled to one vote for each full share owned and fractional votes for

fractional shares owned. 

The Trust does not normally hold annual meetings of shareholders.  Meetings of the shareholders

shall be called by any member of the Board upon written request of shareholders holding, in the

aggregate, not less than 10% of the shares, such request specifying the purpose or purposes for which

such meeting is to be called.

Interests in the Fund are represented by shares of beneficial interest, each with no par value per share.

Each share of the Fund represents an equal proportionate interest in the assets and liabilities

belonging to the Fund and is entitled to such distributions out of the income belonging to the Fund as

may be declared by the Board. 

The Board has the authority from time to time to divide or combine the shares of any series into a

greater or lesser number of shares of that series without materially changing the proportionate

beneficial interest of the shares of that series in the assets belonging to that series or materially

affecting the rights of shares of any other series.  In case of the liquidation of a series, the holders of

shares of the series being liquidated are entitled to receive a distribution out of the assets, net of the

liabilities, belonging to that series.  Expenses attributable to any series (or class thereof) are borne by

that series (or class).  Any general expenses of the Trust not readily identifiable as belonging to a

particular series are allocated by, or under the direction of, the Board to all applicable series (and

classes thereof) in such manner and on such basis as deemed fair and equitable.  No shareholder is

2

liable to further calls for the payment of any sum of money or assessment whatsoever with respect to

the Trust or any series of the Trust without his or her express consent.

All consideration received by the Trust for the issue or sale of the Fund’s shares, together with all

assets in which such consideration is invested or reinvested, and all income, earnings, profits and

proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such

assets, and any funds or payments derived from any reinvestment of such proceeds, subject only to

the rights of creditors, shall constitute the underlying assets of the Fund.

Lawson Kroeker Investment Management, Inc. (the “Adviser”) serves as the investment adviser for

the Fund.

Investment Policies, Strategies and Associated Risks

The following discussion supplements the description of the Fund’s investment objective and

principal investment strategies and principal risks set forth in the Prospectus.  Except for the

fundamental investment limitations listed below (see “Fundamental and Non-Fundamental

Investment Limitations”), the Fund’s investment strategies and policies are not fundamental and may

be changed by sole action of the Board, without shareholder approval.  While the Fund is permitted to

hold securities and engage in various strategies as described hereafter, it is not obligated to do so. The

Fund might not invest in all of these types of securities or use all of these techniques at any one time.

The Fund's transactions in a particular type of security or use of a particular technique is subject to

limitations imposed by the Fund's investment objective, policies and restrictions described in the

Fund's Prospectus and/or this SAI, as well as the federal securities laws.

Investment Objective

The investment objective of the Fund is set forth under the “Summary Section” in the Fund’s

Prospectus. 

Diversification

The Fund is diversified.  A diversified fund is a fund that satisfies the definition of a “diversified

company” set forth in the 1940 Act.  A “diversified company” means that as to 75% of the Fund’s

total assets, excluding cash, government securities and securities of other investment companies, (1)

no more than 5% may be invested in the securities of a single issuer, and (2) the Fund may not hold

more than 10% of the outstanding voting securities of a single issuer.

Because the Fund intends to qualify as a “regulated investment company” (“RIC”) under Subchapter

M of the Internal Revenue Code of 1986, as amended, (the “Code”), the Fund will limit its

investment, excluding cash, cash items (including receivables), U.S. government securities and

securities of other regulated investment companies, so that at the close of each quarter of the taxable

year, (1) not more than 25% of the Fund’s total assets will be invested in the securities of a single

issuer, and (2) with respect to 50% of its total assets, not more than 5% of the Fund’s total assets will

be invested in the securities of a single issuer and the Fund will not hold more than 10% of the

issuer’s outstanding voting securities. 

Percentage Limitations

The Fund’s compliance with its investment policy and limitations will be determined immediately

after and as a result of the Fund’s acquisition of such security or other asset.  Accordingly, except

with respect to borrowing or illiquid investments, any subsequent change in values, net assets or other

circumstances will not be considered when determining whether an investment complies with the

3

Fund’s investment policies and limitations.  In addition, if a bankruptcy or other extraordinary event

occurs concerning a particular investment by the Fund, the Fund may receive stock, real estate or

other investments that the Fund would not, or could not, buy.  If this happens, the Fund will sell such

investments as soon as practicable while trying to maximize the return to its shareholders.

Market Volatility

U.S. and international markets have from time to time experienced significant volatility. Certain

social, political, economic, environmental and other conditions and events (such as natural disasters

and weather-related phenomena generally, epidemics and pandemics, terrorism, conflicts and social

unrest) may adversely interrupt the global economy and result in prolonged periods of significant

market volatility. During certain volatile periods, the fixed income markets have experienced

substantially lower valuations, reduced liquidity, price volatility, credit downgrades, increased

likelihood of default and valuation difficulties.  At times, concerns have spread to domestic and

international equity markets.  In some cases, the stock prices of individual companies have been

negatively affected even though there may be little or no apparent degradation in the financial

conditions or prospects of that company.  Continued volatility may have adverse effects on the Fund,

and may increase the risks discussed below.

Equity Securities

An equity security represents a proportionate share of the ownership of a company.  Its value is based

on the success of the company’s business, any income paid to stockholders, the value of its assets and

general market conditions. The value of equity securities will be affected by changes in the stock

markets, which may be the result of domestic or international political or economic news, changes in

interest rates or changing investor sentiment. At times, stock markets can be volatile and stock prices

can change substantially. Equity securities risk affects the Fund’s net asset value per share (“NAV”),

which will fluctuate as the value of the securities it holds changes. Not all stock prices change

uniformly or at the same time, and not all stock markets move in the same direction at the same time.

Other factors affect a particular stock’s prices, such as poor earnings reports by an issuer, loss of

major customers, major litigation against an issuer, or changes in governmental regulations affecting

an industry. Adverse news affecting one company can sometimes depress the stock prices of all

companies in the same industry. Not all factors can be predicted. Common stocks and preferred

stocks are examples of equity securities. The fundamental risk of investing in common and preferred

stock is the risk that the value of the stock might decrease.

Common Stock

Common stock represents an ownership interest in a company. In addition to the general risks set

forth above, investments in common stocks are subject to the risk that in the event a company in

which the Fund invests is liquidated, the holders of preferred stock and creditors of that company will

be paid in full before any payments are made to the Fund as holders of common stock.  It is possible

that all assets of that company will be exhausted before any payments are made to the Fund.

Preferred Stock

Preferred stock represents an ownership interest in a company, often pays dividends at a specific rate

and has a preference over common stocks in dividend payments and liquidation of assets. A preferred

stock is a blend of the characteristics of a bond and common stock. It can offer the higher yield of a

bond and has priority over common stock in equity ownership, but does not have the seniority of a

bond and, unlike common stock, its participation in the issuer’s growth may be limited. Although the

dividend is set at a fixed annual rate, in some circumstances it can be changed or omitted by the

issuer. In addition, preferred stock usually does not have voting rights.

4

Foreign Investments and Currencies

The Fund may invest in securities of foreign issuers that are not traded in the United States and/or are

not U.S. dollar denominated, purchase and sell foreign currency on a spot basis.  The Fund may also

invest in American Depositary Receipts (“ADRs”) and foreign securities that are traded on a U.S.

exchange.  Investments in ADRs and foreign securities involve certain inherent risks, including the

following:

Depositary Receipts.  Generally, ADRs, in registered form, are denominated in U.S. dollars and are

designed for use in the U.S. securities markets.  ADRs are receipts typically issued by a U.S. bank or

trust company evidencing ownership of the underlying securities.  ADRs may be purchased through

“sponsored” or “unsponsored” facilities.  A sponsored facility is established jointly by the issuer of

the underlying security and a depositary, whereas a depositary may establish an unsponsored facility

without participation by the issuer of the depositary security.  Holders of unsponsored depositary

receipts generally bear all the costs of such facilities, and the depositary of an unsponsored facility

frequently is under no obligation to distribute shareholder communications received from the issuer of

the deposited security or to pass through voting rights to the holders of such receipts of the deposited

securities. Accordingly, available information concerning the issuer may not be current and the prices

of unsponsored depositary receipts may be more volatile than the prices of sponsored depositary

receipts.  For purposes of the Fund’s investment policies, ADRs are deemed to have the same

classification as the underlying securities they represent.  Thus, an ADR representing ownership of

common stock will be treated as common stock.

Political and Economic Factors.  Individual foreign economies of certain countries may differ

favorably or unfavorably from the U.S. economy in such respects as growth of gross national product,

rate of inflation, capital reinvestment, resource self-sufficiency, diversification and balance of

payments position.  The internal politics of certain foreign countries may not be as stable as those of

the United States.  Governments in certain foreign countries also continue to participate to a

significant degree, through ownership interest or regulation, in their respective economies.  Action by

these governments could include restrictions on foreign investment, nationalization, expropriation of

goods or imposition of taxes, and could have a significant effect on market prices of securities and

payment of interest.  The economies of many foreign countries are heavily dependent upon

international trade and are accordingly affected by the trade policies and economic conditions of their

trading partners.  Enactment by these trading partners of protectionist trade legislation could have a

significant adverse effect upon the securities markets of those countries.

Unexpected political, regulatory and diplomatic events within the U.S. and abroad may affect investor

and consumer confidence and may adversely impact global financial markets and the broader

economy. Foreign conflicts have caused, and could continue to cause, significant market disruptions

and volatility within specific markets and globally. The hostilities and sanctions resulting from those

hostilities have, and could continue to have, a significant impact on certain Fund investments as well

as Fund performance and liquidity. The economies of the United States and its trading partners, as

well as the financial markets generally, may be adversely impacted by trade disputes and other

matters.

Currency Fluctuations.  The Fund may invest in securities denominated in foreign currencies.

Accordingly, a change in the value of any such currency against the U.S. dollar will result in a

corresponding change in the U.S. dollar value of the Fund’s assets denominated in that currency.

5

Such changes will also affect the Fund’s income.  The value of the Fund’s assets may also be affected

significantly by currency restrictions and exchange control regulations enacted from time to time.

Market Characteristics.  The Adviser expects that many foreign securities in which the Fund may

invest could be purchased in over-the-counter (“OTC”) markets or on exchanges located in the

countries in which the principal offices of the issuers of the various securities are located, if that is the

best available market.  Foreign exchanges and markets may be more volatile than those in the United

States.  While growing in volume, they usually have substantially less volume than U.S. markets, and

the Fund’s investments in foreign securities may be less liquid and more volatile than investments in

U.S. securities.  Moreover, settlement practices for transactions in foreign markets may differ from

those in U.S. markets, and may include delays beyond periods customary in the United States.

Foreign security trading practices, including those involving securities settlement where Fund assets

may be released prior to receipt of payment or securities, may expose the Fund to increased risk in the

event of a failed trade or the insolvency of a foreign broker-dealer.

Legal and Regulatory Matters.  Certain foreign countries may have less supervision of securities

markets, brokers and issuers of securities, non-uniform accounting standards and less financial

information available from issuers, than is available in the United States.  It may be more difficult to

obtain and enforce a judgment against a foreign issuer.  Legal remedies available to investors in

certain foreign countries may be more limited than those available with respect to investments in the

United States or in other foreign countries.  The laws of some foreign countries may limit the Fund’s

ability to invest in securities of certain issuers located in those foreign countries. 

Taxes.  The interest and dividends payable on certain of the Fund’s foreign portfolio securities may be

subject to foreign withholding taxes, thus reducing the net amount of income available for distribution

to Fund shareholders.  Foreign issuers may not be subject to auditing and financial reporting

standards and requirements comparable to those which apply to U.S. companies.

Costs.  To the extent that the Fund invests in foreign securities, its expense ratio is likely to be higher

than those of investment companies investing only in domestic securities, because related brokerage

costs and the cost of maintaining the custody of foreign securities may be higher.

Additional Risks of Emerging Markets.  In addition, the Fund may invest in foreign securities of

companies that are located in developing or emerging markets.  Investing in securities of issuers

located in these markets may pose greater risks not typically associated with investing in more

established markets, such as increased risk of social, political and economic instability.  Emerging

market countries typically have smaller securities markets than developed countries and therefore less

liquidity and greater price volatility than more developed markets.  Securities traded in emerging

markets may also be subject to risks associated with the lack of modern technology, poor

governmental and/or judicial infrastructures relating to private or foreign investment or to judicial

redress for injury to private property, the lack of capital base to expand business operations, foreign

taxation and the inexperience of financial intermediaries, custodians and transfer agents.  Emerging

market countries are also more likely to impose restrictions on the repatriation of an investor’s assets

and even where there is no outright restriction on repatriation, the mechanics of repatriations may

delay or impede the Fund’s ability to obtain possession of its assets.  As a result, there may be an

increased risk or price volatility associated with the Fund’s investments in emerging market countries,

which may be magnified by currency fluctuations.

6

Real Estate Securities

The real estate securities in which the Fund may invest consist of securities issued by Real Estate

Investment Trusts (“REITs”) or Real Estate Operating Companies (“REOCs”) that are listed on a

securities exchange or traded OTC. A REIT is a corporation or trust that invests in fee or leasehold

ownership of real estate, mortgages or shares issued by other REITs and that receives favorable tax

treatment provided it meets certain conditions. REITs may be characterized as equity REITs (i.e.,

REITs that primarily invest in fee ownership and leasehold ownership of land), mortgage REITs (i.e.,

REITs that primarily invest in mortgages on real estate and other real estate debt) or hybrid REITs

which invest in both fee and leasehold ownership of land and mortgages. A U.S. REIT that meets the

applicable requirements of the Code may deduct dividends paid to shareholders, effectively

eliminating any corporate level federal tax. As a result, U.S. REITs are able to distribute a larger

portion of their earnings to investors than other corporate entities subject to the federal corporate tax.

There is the risk that a REIT held by the Fund will fail to qualify for this tax-free pass-through

treatment of its income. By investing in REITs indirectly through the Fund, in addition to bearing a

proportionate share of the expenses of the Fund, investors will also indirectly bear similar expenses of

the REITs in which the Fund invests. A U.S. REOC is typically structured as a “C” corporation under

the tax code and is not required to distribute any portion of its income. A REOC, therefore, does not

receive the same favorable tax treatment that is accorded a REIT. In addition, the value of the Fund’s

securities issued by REOCs may be adversely affected by income streams derived from businesses

other than real estate ownership.

Fixed-Income Securities

The Fund may invest in a wide range of fixed-income securities, which may include obligations of

any rating or maturity.  The Fund may invest in investment grade debt securities and below

investment grade debt securities (commonly known as “junk bonds” or “high yield bonds”).

Investment grade debt securities are those rated BBB- or better by Standard & Poor’s Rating Service,

Inc. (“S&P”) or Baa3 or better by Moody’s Investors Service, Inc. (“Moody’s”), each of which is

considered a nationally recognized statistical rating organization (“NRSRO”), or an equivalent rating

by another NRSRO.  Securities rated BBB- by S&P are considered investment grade, but Moody’s

considers securities rated Baa3 to have speculative characteristics. The Fund will not invest in

securities that are, at the time of purchase, rated D by S&P or that are rated C by Moody’s. The Fund

may hold a debt security rated D or C, respectively, if a downgrade occurs after the security has been

purchased. The Fund may also invest in unrated debt securities that the Adviser believes are of

comparable quality to the rated securities which the Fund may purchase.

The Adviser selects debt securities identically to how it selects equity securities except that the

valuation study is not done using traditional equity valuation, but rather using historical studies of

interest levels for the appropriate company given its financial strength to allow for a determination of

the value of the debt instrument.  The total return potential of the debt instrument is reviewed relative

to the total return potential of other investment opportunities in determining whether to invest in a

debt security.

Debt securities carry credit risk, interest rate risk and prepayment risk.  Credit risk is the risk that the

Fund could lose money if the issuer of a debt security defaults or fails to pay interest or principal

when it is due.  Some debt securities that are rated below investment grade are generally considered

speculative because they present a greater risk of loss, including default, than higher quality debt

securities.  The credit risk of a particular issuer’s debt security may vary based on its priority for

repayment.  For example, higher ranking (senior) debt securities have a higher priority than lower

7

ranking (subordinated) securities.  This means that the issuer might not make payments on

subordinated securities while continuing to make payments on senior securities.  In addition, in the

event of bankruptcy, holders of higher-ranking senior securities may receive amounts otherwise

payable to the holders of more junior securities. 

Interest rate risk is the risk that the value of certain debt securities will tend to fall when interest rates

rise.  In general, debt securities with longer terms tend to fall more in value when interest rates rise

than debt securities with shorter terms. Prepayment risk occurs when issuers prepay fixed rate debt

securities when interest rates fall, forcing the Fund to invest in securities with lower interest rates.

Issuers of debt securities are also subject to the provisions of bankruptcy, insolvency and other laws

affecting the rights and remedies of creditors that may restrict the ability of the issuer to pay, when

due, the principal of and interest on its debt securities. The possibility exists therefore, that, as a result

of bankruptcy, litigation or other conditions, the ability of an issuer to pay, when due, the principal of

and interest on its debt securities may become impaired.

Junk Bonds.  Junk bonds generally offer a higher current yield than that available for investment

grade issues.  However, below investment grade debt securities involve higher risks, in that they are

especially subject to adverse changes in general economic conditions and in the industries in which

the issuers are engaged, to changes in the financial condition of the issuers, and to price fluctuations

in response to changes in interest rates.  During periods of economic downturn or rising interest rates,

highly leveraged issuers may experience financial stress that could adversely affect their ability to

make payments of interest and principal and increase the possibility of default.  At times in recent

years, the prices of many below investment grade debt securities declined substantially, reflecting an

expectation that many issuers of such securities might experience financial difficulties.  As a result,

the yields on below investment grade debt securities rose dramatically, reflecting the risk that holders

of such securities could lose a substantial portion of their value as a result of the issuers’ financial

restructuring or default. There can be no assurance that such price declines will not recur.  The market

for below investment grade debt issues generally is thinner and less active than that for higher quality

securities, which may limit the Fund’s ability to sell such securities at fair value in response to

changes in the economy or financial markets. Adverse publicity and investor perceptions, whether

based on fundamental analysis or not, may also decrease the values and liquidity of below investment

grade debt securities, especially in a thinly traded market. Changes by recognized rating services in

their rating of a debt security may affect the value of these investments. The Fund will not necessarily

dispose of a security when its rating is reduced below its rating at the time of purchase.  However, the

Adviser will monitor the investment to determine whether continued investment in the security will

assist in meeting the Fund’s investment objective.

Variable and Floating Rate Securities.  Variable and floating rate securities provide for a periodic

adjustment in the interest rate paid on the obligations.  The terms of such obligations must provide

that interest rates are adjusted periodically based upon an interest rate adjustment index as provided in

the respective obligations. The adjustment intervals may be regular, and range from daily up to

annually, or may be event-based, such as based on a change in the base rate.  The base rate usually is

a benchmark that “floats” or changes to reflect current interest rates, such as the prime rate offered by

one or more major U.S. banks. The applicable benchmark is defined by the terms of an obligation and

will remain the same for the life of such obligation. If the benchmark interest rate on a floating rate

security changes, the rate payable will, in turn, change at the next scheduled adjustment date.

8

Corporate Debt Securities.  Corporate debt securities are fixed-income securities issued by businesses

to finance their operations, although corporate debt instruments may also include bank loans to

companies. Notes, bonds, debentures and commercial paper are the most common types of corporate

debt securities, with the primary difference being their maturities and secured or unsecured status.

Commercial paper has the shortest term and is usually unsecured.

The broad category of corporate debt securities includes debt issued by domestic or foreign

companies of all kinds, including those with small, mid and large capitalizations. Corporate debt may

be rated investment grade or below investment grade and may carry fixed, variable or floating rates of

interest.

Because of the wide range of types and maturities of corporate debt securities, as well as the range of

creditworthiness of its issuers, corporate debt securities have widely varying potentials for return and

risk profiles.  For example, commercial paper issued by a large established domestic corporation that

is rated investment grade may have a modest return on principal, but carries relatively limited risk.

On the other hand, a long-term corporate note issued by a small foreign corporation from an emerging

market country that has not been rated may have the potential for relatively large returns on principal,

but carries a relatively high degree of risk.

Exchange-Traded Notes.  The Fund may invest in Exchange-Traded Notes (“ETNs”).  An ETN is a

type of unsecured, unsubordinated debt security that differs from other types of bonds and notes

because ETN returns are typically based upon the performance of a market index.  ETNs are publicly

traded on a U.S. securities exchange.  An ETN incurs certain expenses not incurred by its applicable

index, and an investment in an ETN will bear its proportionate share of any fees and expenses borne

by the ETN. The market value of an ETN share may differ from its NAV; the share may trade at a

premium or discount to its NAV, which may be due to, among other things, differences in the supply

and demand in the market for the share.  Although an ETN is a debt security, it is unlike a typical

bond, in that there are no periodic interest payments and principal is not protected.  ETNs are subject

to credit risk and the value of the ETN may drop due to a downgrade in the issuer’s credit rating,

despite the underlying market benchmark or strategy remaining unchanged.

Convertible Securities. Convertible securities include fixed income securities that may be exchanged

or converted into a predetermined number of shares of the issuer’s underlying common stock or other

equity security at the option of the holder during a specified period.  Convertible securities entitle the

holder to receive interest paid or accrued on debt or dividends paid or accrued on preferred stock until

the security matures or is redeemed, converted or exchanged. Convertible securities may take the

form of convertible preferred stock, convertible bonds or debentures, units consisting of “usable”

bonds and warrants or a combination of the features of several of these securities.  The investment

characteristics of convertible securities vary widely, which allows convertible securities to be

employed for a variety of investment strategies.  The Fund will exchange or convert convertible

securities into shares of underlying common stock when, in the opinion of the Adviser, the investment

characteristics of the underlying common stock or other equity security will assist the Fund in

achieving its investment objectives.  The Fund may also elect to hold or trade convertible securities.

In selecting convertible securities, the Adviser evaluates the investment characteristics of the

convertible security as a fixed income instrument, and the investment potential of the underlying

equity security for capital appreciation.

Contingent Convertible Securities. Contingent convertible securities (“CoCos”) are a form of hybrid

debt security that are intended to either convert into equity or have their principal written down upon

9

the occurrence of certain “triggers.” The triggers are generally linked to regulatory capital thresholds

or regulatory actions calling into question the issuing banking institution’s continued viability as a

going concern. CoCos’ unique equity conversion or principal write-down features are tailored to the

issuing banking institution and its regulatory requirements. Some additional risks associated with

CoCos include, but are not limited to:

•Loss absorption risk. CoCos have fully discretionary coupons. This means coupons can

potentially be cancelled at the banking institution’s discretion or at the request of the relevant

regulatory authority in order to help the bank absorb losses.

•Subordinated instruments. CoCos will, in the majority of circumstances, be issued in the form

of subordinated debt instruments in order to provide the appropriate regulatory capital

treatment prior to a conversion. Accordingly, in the event of liquidation, dissolution or

winding-up of an issuer prior to a conversion having occurred, the rights and claims of the

holders of the CoCos, such as the Fund, against the issuer in respect of or arising under the

terms of the CoCos shall generally rank junior to the claims of all holders of unsubordinated

obligations of the issuer. In addition, if the CoCos are converted into the issuer’s underlying

equity securities following a conversion event (i.e., a “trigger”), each holder will be

subordinated due to their conversion from being the holder of a debt instrument to being the

holder of an equity instrument.

•Market value will fluctuate based on unpredictable factors. The value of CoCos is

unpredictable and will be influenced by many factors including, without limitation: (i) the

creditworthiness of the issuer and/or fluctuations in such issuer’s applicable capital ratios; (ii)

supply and demand for the CoCos; (iii) general market conditions and available liquidity; and

(iv) economic, financial and political events that affect the issuer, its particular market or the

financial markets in general.

Asset-Backed Securities. Asset-backed securities represent an interest in a pool of assets such as car

loans and credit card receivables.  Almost any type of fixed income assets (including other fixed

income securities) may be used to create an asset-backed security. However, most asset-backed

securities involve consumer or commercial debts with maturities of less than ten years.  Asset-backed

securities may have a higher level of default and lower recoveries than mortgage-backed securities.

Asset-backed securities may take the form of commercial paper or notes, in addition to pass-through

certificates or asset-backed bonds.

Mortgage-Backed Securities. Mortgage-backed securities generally represent interests in pools of

mortgages on residential or commercial property.  Mortgages may have fixed or adjustable interest

rates. Interests in pools of adjustable rate mortgages are known as ARMs.  Mortgage-backed

securities come in a variety of forms. Many have extremely complicated terms. The simplest form of

mortgage-backed securities is a “pass-through certificate.” Holders of pass-through certificates

receive a pro rata share of the payments from the underlying mortgages. Holders also receive a pro

rata share of any prepayments, so they assume all the prepayment risk of the underlying mortgages.

Mortgage-backed securities tend to pay higher yields to compensate for prepayment risk.

Collateralized mortgage obligations (“CMOs”) are complicated instruments that allocate payments

and prepayments from an underlying pass-through certificate among holders of different classes of

mortgage-backed securities. This creates different prepayment and market risks for each CMO class.

In addition, CMOs may allocate interest payments to one class (Interest Only or IOs) and principal

payments to another class (Principal Only or POs). POs increase in value when prepayment rates

10

increase. In contrast, IOs decrease in value when prepayments increase, because the underlying

mortgages generate less interest payments. However, IOs’ prices tend to increase when interest rates

rise (and prepayments fall), making IOs a useful hedge against market risk.

Residential mortgage-backed securities include securities that reflect an interest in, and are secured

by, mortgage loans on residential real property.  Generally, homeowners have the option to prepay

their mortgages at any time without penalty. Homeowners frequently refinance high rate mortgages

when mortgage rates fall. This results in the prepayment of the mortgages underlying residential

mortgage-backed securities, which deprives holders of the securities of the higher yields. Conversely,

when mortgage rates increase, prepayments due to refinancings decline. This extends the life of

residential mortgage-backed securities with lower yields. As a result, increases in prepayments of

residential mortgage-backed securities purchased at a premium, or decreases in prepayments of

residential mortgage-backed securities purchased at a discount, may reduce their yield and price. This

relationship between interest rates and mortgage prepayments makes the price of residential

mortgage-backed securities more volatile than most other types of fixed income securities with

comparable credit risks.

Commercial mortgage-backed securities include securities that reflect an interest in, and are secured

by, mortgage loans on commercial real property. In addition to prepayment and extension risk,

commercial mortgage-backed securities also reflect the risks of investing in the real estate securing

the underlying mortgage loans including, the effects of local and other economic conditions on real

estate markets, the ability of the property owner to make loan payments, the ability of tenants to make

lease payments, and the ability of a property to attract and retain tenants. Commercial mortgage-

backed securities may be less liquid and exhibit greater price volatility than other types of mortgage-

or asset-backed securities.

Municipal Securities.  Municipal securities are fixed income securities issued by states, counties,

cities and other political subdivisions and authorities. Although most municipal securities are exempt

from federal income tax, municipalities also may issue taxable securities. Tax-exempt securities are

generally classified by their source of payment.

Zero-Coupon Securities.  Zero-coupon securities make no periodic interest payments, but are sold at a

deep discount from their face value.  The buyer recognizes a rate of return determined by the gradual

appreciation of the security, which is redeemed at face value on a specified maturity date.  The

discount varies depending on the time remaining until maturity, as well as market interest rates,

liquidity of the security, and the issuer’s perceived credit quality.  If the issuer defaults, the holder

may not receive any return on its investment.  Because zero-coupon securities bear no interest, their

price fluctuates more than other types of bonds.  Since zero-coupon bondholders do not receive

interest payments, when interest rates rise, zero-coupon securities fall more dramatically in value than

bonds paying interest on a current basis.  When interest rates fall, zero-coupon securities rise more

rapidly in value because the bonds reflect a fixed rate of return.  An investment in zero-coupon may

cause the Fund to recognize income and make distributions to shareholders before it receives any cash

payments on its investment.

Unrated Debt Securities.  The Fund may also invest in unrated debt securities.  Unrated debt, while

not necessarily lower in quality than rated securities, may not have as broad a market.  Because of the

size and perceived demand for the issue, among other factors, certain issuers may decide not to pay

the cost of getting a rating for their bonds.  The creditworthiness of the issuer, as well as any financial

11

institution or other party responsible for payments on the security, will be analyzed to determine

whether to purchase unrated bonds.

Inflation-Indexed Securities. Inflation-indexed securities are debt securities, the principal value of

which is periodically adjusted to reflect the rate of inflation as indicated by the Consumer Price Index

for all Urban Consumers before seasonal adjustment (“CPI”). Inflation-indexed securities may be

issued by the U.S. government, agencies and instrumentalities of the U.S. government, and by

corporations. The U.S. Treasury issues Treasury inflation-protected securities (“TIPS”) and some

other issuers use a structure that accrues inflation into the principal value of the bond. Most other

issuers pay out the CPI accruals as part of a semiannual coupon.

The periodic adjustment of U.S. inflation-indexed securities is tied to the CPI, which is calculated

monthly by the U.S. Bureau of Labor Statistics. The CPI is a measurement of changes in the cost of

living, made up of components such as housing, food, transportation, and energy. There can be no

assurance that the CPI will accurately measure the real rate of inflation in the prices of goods and

services.

Inflation, which is a general rise in prices of goods and services, erodes the purchasing power of an

investor’s portfolio. For example, if an investment provides a “nominal” total return of 5% in a given

year and inflation is 2% during that period, the inflation-adjusted, or real, return is 3%. Inflation, as

measured by the CPI, has occurred in almost each of the past 50 years, so investors should be

conscious of both the nominal and real returns of their investments.  Although inflation-indexed

securities are expected to be protected from long-term inflationary trends, short-term increases in

inflation may lead to a decline in value. If interest rates rise because of reasons other than inflation

(for example, because of changes in currency exchange rates), investors in these securities may not be

protected to the extent that the increase is not reflected in the bond’s inflation measure.

If the periodic adjustment rate measuring inflation (i.e., the CPI) falls, the principal value of inflation-

indexed securities will be adjusted downward, and consequently the interest payable on these

securities (calculated with respect to a smaller principal amount) will be reduced. Repayment of the

original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of TIPS,

even during a period of deflation. However, the current market value of the inflation-indexed

securities is not guaranteed, and will fluctuate. Other inflation-indexed securities include inflation-

related bonds, which may or may not provide a similar guarantee. If a guarantee of principal is not

provided, the adjusted principal value of the bond repaid at maturity may be less than the original

principal.

The value of inflation-indexed securities should change in response to changes in real interest rates.

Real interest rates, in turn, are tied to the relationship between nominal interest rates and the rate of

inflation. Therefore, if inflation were to rise at a faster rate than nominal interest rates, real interest

rates might decline, leading to an increase in value of inflation-indexed securities. In contrast, if

nominal interest rates increased at a faster rate than inflation, real interest rates might rise, leading to a

decrease in value of inflation-indexed securities.

Coupon payments that the Fund receives from inflation-indexed securities are included in the Fund’s

gross income for the period during which they accrue. Any increase in principal for an inflation-

indexed security resulting from inflation adjustments is considered by Internal Revenue Service

(“IRS”) regulations to be taxable income in the year it occurs. For direct holders of an inflation-

indexed security, this means that taxes must be paid on principal adjustments, even though these

12

amounts are not received until the bond matures. By contrast, a fund holding these securities

distributes both interest income and the income attributable to principal adjustments each quarter in

the form of cash or reinvested shares (which, like principal adjustments, are taxable to shareholders).

It may be necessary for the Fund to liquidate portfolio positions, including when it is not

advantageous to do so, in order to make required distributions.

U.S. Government Obligations

The Fund may invest in U.S. government obligations.  U.S. government obligations include securities

issued or guaranteed as to principal and interest by the U.S. government, its agencies or

instrumentalities.  Treasury bills, the most frequently issued marketable government securities, have a

maturity of up to one year and are issued on a discount basis.  U.S. government obligations include

securities issued or guaranteed by government-sponsored enterprises.

Payment of principal and interest on U.S. government obligations may be backed by the full faith and

credit of the United States or may be backed solely by the issuing or guaranteeing agency or

instrumentality itself.  In the latter case, the investor must look principally to the agency or

instrumentality issuing or guaranteeing the obligation for ultimate repayment, which agency or

instrumentality may be privately owned.  There can be no assurance that the U.S. government would

provide financial support to its agencies or instrumentalities, including government-sponsored

enterprises, where it is not obligated to do so (see “Agency Obligations,” below).  In addition, U.S.

government obligations are subject to fluctuations in market value due to fluctuations in market

interest rates.  As a general matter, the value of debt instruments, including U.S. government

obligations, declines when market interest rates increase and rises when market interest rates

decrease.  Certain types of U.S. government obligations are subject to fluctuations in yield or value

due to their structure or contract terms.

Agency Obligations

The Fund may invest in agency obligations, such as the Export-Import Bank of the United States,

Tennessee Valley Authority, Resolution Funding Corporation, Farmers Home Administration,

Federal Home Loan Banks, Federal Intermediate Credit Banks, Federal Farm Credit Banks, Federal

Land Banks, Federal Housing Administration, Government National Mortgage Association,

commonly known as “Ginnie Mae,” Federal National Mortgage Association (“FNMA”), commonly

known as “Fannie Mae,” Federal Home Loan Mortgage Corporation (“FHLMC”), commonly known

as “Freddie Mac,” and the Student Loan Marketing Association (“SLMA”), commonly known as

“Sallie Mae.”  Some, such as those of the Export-Import Bank of United States, are supported only by

the right of the issuer to borrow from the Treasury; others, such as those of the FNMA and FHLMC,

are supported by only the discretionary authority of the U.S. government to purchase the agency’s

obligations; still others, such as those of the SLMA, are supported only by the credit of the

instrumentality.  No assurance can be given that the U.S. government would provide financial support

to U.S. government-sponsored instrumentalities because they are not obligated by law to do so.  As a

result, there is a risk that these entities will default on a financial obligation.  For instance, in

September 2008, at the direction of the U.S. Treasury, FNMA and FHLMC were placed into

conservatorship under the Federal Housing Finance Agency, a newly created independent regulator.

Warrants and Rights

The Fund may purchase, or receive as a distribution from other investments, warrants and rights,

which are instruments that permit the Fund to acquire, by subscription, the capital stock of a

corporation at a set price, regardless of the market price for such stock.  The principal difference

between warrants and rights is their term-rights typically expire within weeks while warrants have

13

longer durations.  Neither rights nor warrants have voting rights or pay dividends.  The market price

of warrants is usually significantly less than the current price of the underlying stock.  Thus, there is a

greater risk that warrants might drop in value at a faster rate than the underlying stock.

When-Issued Securities

When-issued securities transactions involve a commitment by the Fund to purchase or sell particular

securities with payment and delivery taking place at a future date, and permit the Fund to lock in a

price or yield on a security it owns or intends to purchase, regardless of future changes in interest

rates or market action.  Typically, no income accrues to the purchaser of a security on a when-issued

basis prior to delivery.  Such securities are recorded as an asset and its value may fluctuate.

Purchasing a security on a when-issued basis can involve a risk that the market price at the time of

delivery may be lower than the agreed-upon purchase price, in which case there could be an

unrealized loss at the time of delivery.  The Fund will only make commitments to purchase securities

on a when-issued basis with the intention of actually acquiring the securities within 35 days of the

trade date.

Initial Public Offerings

The Fund may invest in securities offered by companies in initial public offerings (“IPOs”).  IPOs

involve companies that have no public operating history and therefore entail more risk than

established public companies.  Because IPO shares frequently are volatile in price, the Fund may hold

IPO shares for a very short period of time.  This may increase the turnover of the Fund’s portfolio and

may lead to increased expenses to the Fund, such as commissions and transaction costs.  By selling

IPO shares, the Fund may realize taxable capital gains that it will subsequently distribute to

shareholders.  Companies that offer securities in IPOs tend to typically have small market

capitalizations and therefore their securities may be more volatile and less liquid than those issued by

larger companies.  Certain companies offering securities in an IPO may have limited operating

experience and, as a result face a greater risk of business failure.

Master Limited Partnerships

The Fund may invest in publicly traded master limited partnerships (“MLPs”) that are registered

under the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”), and listed

on a major United States stock exchange, if the issuer meets the Fund’s investment criteria.  MLPs are

businesses organized as limited partnerships which trade their proportionate shares of the partnership

(units) on a public exchange. MLPs often own, or own interests in, properties or businesses that are

related to oil and gas industries, including pipelines, although MLPs may invest in other types of

investments, including credit-related investments. MLPs are required to pay out most or all of their

cash flow in distributions. This pass through creates passive income or losses, along with dividend

and investment income. The MLPs the Fund may purchase are comprised of a general partner (the

“GP”) and multiple limited partners (the “LP Holders”). The GP is responsible for the operations and

the maintenance of the partnership’s businesses, while the LP Holders assume economic risk up to

their level of investment.  Typically, the GP has a 1% to 2% investment in the MLP, but can extract a

higher percentage of the partnership’s profits as the MLP’s distributions increase.  This serves as an

incentive to the GP to grow the partnership’s distributions. Conflicts of interest may exist among unit

holders, subordinated unit holders and the general partner of an MLP, including those arising from

incentive distribution payments.

Generally speaking, MLP investment returns are enhanced during periods of declining or low interest

rates and tend to be negatively influenced when interest rates are rising.  As an income vehicle, the

unit price can be influenced by general interest rate trends independent of specific underlying

14

fundamentals.  In addition, most MLPs are fairly leveraged and typically carry a portion of a

“floating” rate debt.  As such, a significant upward swing in interest rates would also drive interest

expense higher.  Furthermore, most MLPs grow by acquisitions partly financed by debt, and higher

interest rates could make it more difficult to make acquisitions.

The manner and extent of the Fund’s investments in MLPs may be limited by its intention to qualify

as a RIC under the Code, and any such investments by the Fund may adversely affect the ability of

the Fund to so qualify.

Private Placements and Restricted Securities

The Fund may invest in restricted securities (securities with limited transferability under the securities

laws) acquired from the issuer in “private placement” transactions.  Private placement securities are

not registered under the Securities Act of 1933, as amended (the “Securities Act”), and are subject to

restrictions on resale.  They are eligible for sale only to certain qualified institutional buyers, like the

Fund, and are not sold on a trading market or exchange.  While private placement securities offer

attractive investment opportunities otherwise not available on an open market, because such securities

are available to few buyers, they are often both difficult to sell and to value.  Certain of the Fund’s

investments may be placed in smaller, less seasoned, issuers that present a greater risk due to limited

product lines and/or financial resources.  The issuer of privately placed securities may not be subject

to the disclosure and other investor protection requirements of a public trade.  Additionally, the Fund

could obtain material non-public information from the issuer of such securities that would restrict the

Fund’s ability to conduct transactions in underlying securities.

Privately placed securities can usually only be resold to other qualified institutional buyers, or in a

private transaction, or to a limited number of purchasers, or in limited quantities after they have been

held for a specified period of time and other conditions are met pursuant to an exemption from

registration.  The Fund may incur more cost in the disposition of such securities because of the time

and legal expense required to negotiate a private placement.  Because of the limited market, the Fund

may find it difficult to sell the securities when it finds it advisable to do so and, to the extent such

securities are sold in private negotiations, they may be sold for less than the price for which they were

purchased or less than their fair market value.

Privately placed securities cannot be resold to the public unless they have been registered under the

Securities Act or pursuant to an exemption, such as Rule 144A.  The Fund may purchase Rule 144A

securities subject to the limitation on investments in illiquid investments, described in the “Illiquid

Investments” section below.  The Fund may also purchase certain commercial paper issued in reliance

on the exemption from regulations in Section 4(2) of the Securities Act (“4(2) Paper”).  The liquidity

of Rule 144A securities and 4(2) Paper will be determined in accordance with Rule 22e-4 under the

1940 Act.

Cash Investments

The Fund may invest in high-quality, short-term debt securities and money market instruments

(“Cash Investments”) for (i) temporary defensive purposes in response to adverse market, economic,

or political conditions and (ii) retaining flexibility in meeting redemptions, paying expenses, and

identifying and assessing investment opportunities.  Cash Investments include shares of other mutual

funds, certificates of deposit, bankers’ acceptances, time deposits, savings association obligations,

commercial paper, short-term notes (including discount notes), and other obligations. 

15

The Fund may hold a substantial position in Cash Investments for long periods of time, which may

result in the Fund not achieving its investment objective.  If the market advances during periods when

the Fund is holding a large Cash Investment, the Fund may not participate to the extent it would have

if the Fund had been more fully invested.  To the extent that the Fund uses a money market fund for

its Cash Investment, there will be some duplication of expenses because the Fund would bear its pro

rata portion of such money market fund’s advisory fees and operational expenses.

Cash Investments are subject to credit risk and interest rate risk, although to a lesser extent than

longer-term debt securities, due to their short-term, significant liquidity, and the high credit quality

typically associated with such securities.

The Fund may invest in any of the following Cash Investments:

Money Market Mutual Funds.  Generally, money market mutual funds seek to earn income consistent

with the preservation of capital and maintenance of liquidity.  They primarily invest in high quality

money market obligations, including U.S. government obligations, bank obligations and high-grade

corporate instruments.  These investments generally mature within 397 calendar days from the date of

acquisition.  An investment in a money market mutual fund is not a bank account and is not insured

or guaranteed by the Federal Deposit Insurance Corporation or any government agency. 

To the extent that the Fund invests in money market mutual funds, your cost of investing in the Fund

will generally be higher because you will indirectly bear fees and expenses charged by the underlying

money market mutual funds in addition to the Fund’s direct fees and expenses.  Furthermore,

investing in money market mutual funds could affect the timing, amount and character of

distributions to you and therefore may increase the amount of taxes payable by you.

Bank Certificates of Deposit, Bankers’ Acceptances and Time Deposits.  The Fund may acquire

certificates of deposit, bankers’ acceptances and time deposits.  Certificates of deposit are negotiable

certificates issued against monies deposited in a commercial bank for a definite period of time and

earning a specified return.  Bankers’ acceptances are negotiable drafts or bills of exchange, normally

drawn by an importer or exporter to pay for specific merchandise, which are “accepted” by a bank,

meaning in effect that the bank unconditionally agrees to pay the face value of the instrument on

maturity.  Certificates of deposit and bankers’ acceptances acquired by the Fund will be dollar-

denominated obligations of domestic or foreign banks or financial institutions which at the time of

purchase have capital, surplus and undivided profits in excess of $100 million (including assets of

both domestic and foreign branches), based on latest published reports, or less than $100 million if

the principal amount of such bank obligations are fully insured by the U.S. government.

In addition to purchasing certificates of deposit and bankers’ acceptances, to the extent permitted

under the investment objective and policies stated above and in the Prospectus, the Fund may make

interest-bearing time deposits or other interest-bearing deposits in commercial or savings banks. 

Time deposits are non-negotiable deposits maintained at a banking institution for a specified period of

time at a specified interest rate.

Savings Association Obligations.  The Fund may invest in certificates of deposit (interest-bearing

time deposits) issued by savings banks or savings and loan associations that have capital, surplus and

undivided profits in excess of $100 million, based on latest published reports, or less than

$100 million if the principal amount of such obligations is fully insured by the U.S. government.

16

Commercial Paper, Short-Term Notes and Other Corporate Obligations.  The Fund may invest a

portion of its assets in commercial paper, short-term notes, and other corporate obligations. 

Commercial paper consists of unsecured promissory notes issued by corporations.  Issues of

commercial paper and short-term notes will normally have maturities of less than nine months and

fixed rates of return, although such instruments may have maturities of up to one year.

Commercial paper and short-term notes will consist of issues rated at the time of purchase “A‑2” or

higher by S&P, “Prime-1” or “Prime-2” by Moody’s, or similarly rated by another NRSRO or, if

unrated, determined by the Adviser to be of comparable quality.

Corporate obligations include bonds and notes issued by corporations to finance longer-term credit

needs than supported by commercial paper.  While such obligations generally have maturities of ten

years or more, the Fund may purchase corporate obligations which have remaining maturities of one

year or less from the date of purchase and which are rated “A” or higher by S&P or “A” or higher by

Moody’s, similarly rated by another NRSRO, or, if unrated, determined by the Adviser to be of

comparable quality.

Investment Companies

The Fund may invest in other investment companies to the extent permitted by the 1940 Act. The

Fund generally may purchase or redeem, without limitation, shares of any affiliated or unaffiliated

money market funds, including unregistered money market funds, so long as the Fund does not pay a

sales load or service fee in connection with the purchase, sale or redemption or if such fees are paid,

and the Fund’s investment adviser waives its management fee in an amount necessary to offset the

amounts paid.  With respect to other investments in investment companies, the 1940 Act generally

limits the Fund from acquiring (i) more than 3% of the total outstanding shares of another investment

company; (ii) shares of another investment company having an aggregate value in excess of 5% of the

value of the total assets of the Fund; or (iii) shares of another registered investment company and all

other investment companies having an aggregate value in excess of 10% of the value of the total

assets of the Fund.

Investments by the Fund in other investment companies will be subject to the limitations of the 1940

Act (including limitations on sales charges), and the rules and regulations thereunder. By investing in

securities of an investment company, the Fund’s shareholders will indirectly bear the fees and

expenses of that underlying fund in addition to the Fund’s own fees and expenses.

In October 2020, the SEC adopted regulatory changes related to the ability of an investment company

to invest in other investment companies in excess of specified statutory limits. These changes include,

among other things, amendments to Rule 12d1-1, the rescission of Rule 12d1-2, the adoption of new

Rule 12d1-4, and the rescission of certain exemptive relief issued by the SEC permitting certain fund

of funds arrangements. Rule 12d1-4, which became effective on January 19, 2021, permits the Fund

to invest in other investment companies, including money market funds, beyond the statutory limits,

subject to certain conditions. The rescission of the applicable exemptive orders and the withdrawal of

the applicable no-action letters was effective on January 19, 2022. Following this effectiveness, an

investment company is no longer able to rely on these exemptive orders and no-action letters, and is

subject instead to Rule 12d1-4 and other applicable rules under Section 12(d)(1).

Closed-End Funds. Closed-end funds are investment companies that typically issue a fixed number of

shares that trade on a securities exchange or OTC. The risks of investment in closed-end funds

typically reflect the risk of the types of securities in which the funds invest. Investments in closed-end

17

funds are subject to the additional risk that shares of the fund may trade at a premium or discount to

their NAV. Closed-end funds come in many varieties and can have different investment objectives,

strategies and investment portfolios. They also can be subject to different risks, volatility and fees and

expenses. Although closed-end funds are generally listed and traded on an exchange, the degree of

liquidity, or ability to be bought and sold, will vary significantly from one closed-end fund to another

based on various factors including, but not limited to, demand in the marketplace. When the Fund

invests in shares of a closed-end fund, shareholders of the Fund bear their proportionate share of the

closed-end fund’s fees and expenses, as well as their share of the Fund’s fees and expenses.

Open-End Mutual Funds. Open-end mutual funds are investment companies that issue new shares

continuously and redeem shares daily. The risks of investment of open-end mutual funds typically

reflect securities in which the funds invest. The NAV per share of an open-end fund will fluctuate

daily depending upon the performance of the securities held by the fund. Each open-end fund may

have a different investment objective and strategy and different investment portfolio. Different funds

may also be subject to different risks, volatility and fees and expenses. When the Fund invests in

shares of an open-end fund, shareholders of the Fund bear their proportionate share of the open-end

funds’ fees and expenses, as well as their share of the Fund’s fees and expenses.

Exchange-Traded Funds. Exchange-Traded Funds (“ETFs”) are typically open-end investment

companies that are bought and sold on a national securities exchange.  When the Fund invests in an

ETF, it will bear additional expenses based on its pro rata share of the ETF’s operating expenses,

including the potential duplication of management fees.  The risk of owning an ETF generally reflects

the risks of owning the underlying securities it holds.  Many ETFs seek to replicate a specific

benchmark index.  However, an ETF may not fully replicate the performance of its benchmark index

for many reasons, including because of the temporary unavailability of certain index securities in the

secondary market or discrepancies between the ETF and the index with respect to the weighting of

securities or the number of stocks held.  Some ETFs are actively managed and instead of replicating,