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证券法文件编号 33-49098

投资公司法文件编号 811-06719

美国

证券交易委员会

华盛顿特区 20549

表格 N-1A

\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n\n \n \n\n \n \n\n \n \n\n \n \n

1933年证券法注册声明	[X]

预先生效修正案编号	[ ]
生效后修正案编号 173	[X]

和/或

1940年投资公司法注册声明	[X]

修正案编号 174	[X]

STERLING CAPITAL FUNDS
\n（根据章程规定的注册人准确名称）

\n北卡罗来纳州费耶特维尔街 434 号 500 室罗利市，27601
\n（主要执行办公室地址，邮政编码）

\n注册人的电话号码，包括区号：(800) 228-1872

\nJames T. Gillespie

Sterling Capital Funds

北卡罗来纳州费耶特维尔街 434 号，500 室

罗利市，27601
\n（服务代理人姓名和地址）

附送副本至：

Thomas R. Hiller

Ropes & Gray LLP

普鲁登特大厦，800 Boylston 街

波士顿，MA 02119

拟议本文件将在以下时间生效：

\n\n

[X]

立即生效，根据第(b)段；

\n\n

[ ]

在\n_________ 生效，根据第(b)段；

\n\n

[ ]

自提交之日起60天后根据第(a)(1)段生效；

\n\n

[ ]

在（日期）根据第(a)(1)段生效；

\n\n

[ ]

自提交之日起75天后根据第(a)(2)段生效；或

\n\n

[ ]

在（日期）根据规则485第(a)(2)段生效。

如果适用，请勾选以下框：

\n\n

[ ]

本生效后修正案为之前提交的生效后修正案指定新的生效日期。

$\"\"$ \n

公开说明书

2026年10月19日\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

股票基金
STERLING CAPITAL LARGE CAP VALUE FOCUSED FACTOR ETF			交易代码：SCFL
STERLING CAPITAL SMALL CAP VALUE FOCUSED FACTOR ETF			交易代码：SCFS
STERLING CAPITAL SMALL CAP VALUE ETF			交易代码：SCSV
免税债券基金
STERLING CAPITAL NORTH CAROLINA INTERMEDIATE TAX-FREE ETF			交易代码：SCNC
STERLING CAPITAL VIRGINIA INTERMEDIATE TAX-FREE ETF			交易代码：SCVA

本公开说明书提供了有关 Sterling Capital Large Cap Value Focused Factor ETF、Sterling Capital Small Cap Value Focused Factor ETF、Sterling Capital Small Cap Value ETF、Sterling Capital North Carolina Intermediate Tax-Free ETF 和 Sterling Capital Virginia Intermediate Tax-Free ETF 的重要信息，这些是 Sterling Capital Funds 的系列基金（每个称为“基金”，合称为“基金”）。请仔细阅读并妥善保存以备将来参考。美国证券交易委员会未批准或否决本公开说明书所述的股份，也未确定本公开说明书是否准确或完整。任何告诉您相反信息的人均在犯法。

斯特林资本大型资本价值聚焦因子ETF、斯特林资本小型资本价值聚焦因子ETF、斯特林资本小型资本价值ETF、斯特林资本北卡罗来纳州中期免税ETF和斯特林资本弗吉尼亚州中期免税ETF均为新设立的基金，旨在收购斯特林资本行为型大型资本价值股权基金（“前身行为型大型资本价值股权基金”）、斯特林资本行为型小型资本价值股权基金（“前身行为型小型资本价值股权基金”）、斯特林资本小型资本价值基金（“前身小型资本价值基金”）、斯特林资本北卡罗来纳州中期免税基金（“前身北卡罗来纳州中期免税基金”）和斯特林资本弗吉尼亚州中期免税基金（“前身弗吉尼亚州中期免税基金”，与前身行为型大型资本价值股权基金、前身行为型小型资本价值股权基金、前身小型资本价值基金和前身北卡罗来纳州中期免税基金一起，统称为“前身基金”）各自的资产和负债，分别进行重组（每项称为“重组”，合称为“重组”），这些重组已获得前身基金董事会的批准。每个前身基金被视为其各自重组中的会计和税务继承者，因此，有关前身基金的业绩信息、财务亮点和其他信息已包含在斯特林资本大型资本价值聚焦因子ETF的招募说明书、斯特林资本小型资本价值聚焦因子ETF的招募说明书、斯特林资本小型资本价值ETF的招募说明书、斯特林资本北卡罗来纳州中期免税ETF的招募说明书和斯特林资本弗吉尼亚州中期免税ETF的招募说明书之中，视情况而定。\n

每只基金均为新设立的基金，没有之前的会计、税务或运营历史。\n

基金的份额在Cboe BZX交易所，Inc.上市并交易。\n

在重组完成之前，基金的份额不会进行销售。

有问题吗？\n

拨打1-800-228-1872
或您的投资代表。\n

\n\n\n\n\n\n\n\n\n


斯特林资本基金	目录


基金摘要
仔细阅读这一重要部分，其中总结了每只基金的目标、费用、主要投资策略和风险、历史业绩、管理方式、如何购买和出售基金单位、税务信息以及支付给经纪商的信息。
	股票基金
4	大型资本价值聚焦因子ETF
10	小型资本价值聚焦因子ETF
16	小型资本价值ETF
	免税债券基金
21	北卡罗来纳州中期免税ETF
27	弗吉尼亚州中期免税ETF
额外的投资策略和风险
阅读此部分以获取有关投资策略及其风险的更多信息。
	股票基金
34	大型资本价值聚焦因子ETF
34	小型资本价值聚焦因子ETF
34	小型资本价值ETF
	债券基金
34	北卡罗来纳州中期免税ETF
34	弗吉尼亚州中期免税ETF
36	投资实践
38	关于基金投资的其他信息
41	ETF 和共同基金的投资区别
42	投资风险
基金管理
请查看此部分以了解负责基金管理的人员和组织的详细信息。
51	投资顾问
52	投资组合经理
53	管理人和承销商

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斯特林资本基金	目录

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如何购买和出售份额
请查看此部分以了解份额估值方式、如何购买和出售份额、相关费用和分红及分配的支付方式。
54	一般信息
54	份额定价方式
55	账面记录
55	溢价/折价信息
55	基金份额的频繁购买和赎回
55	分配和服务计划
56	金融中介支持支付
56	分红、其他分配和税收
60	关于基金的其他信息
关于基金的其他信息
62	财务亮点

\n\n\n\n\n\n\n\n\n\n\n

$\"\"$		斯特林资本大型价值聚焦因子 ETF
	概要

交易代码：SCFL\n

投资目标\n

该基金通过主要投资于大型公司的股权证券，旨在实现最大的长期总回报。\n

费用表\n

本表描述了您在购买、持有和出售该基金份额时可能支付的费用。斯特林资本基金（“信托”）与斯特林资本管理有限责任公司（“斯特林资本”，“顾问”，或“管理人”）（“统一费用管理服务协议”）之间的统一费用管理服务协议规定，管理人将支付基金的所有运营费用，但以下表格中列出的管理费、分配和服务（规则 12b-1）费用、分配费用、任何类型的与投资相关的费用、借贷和其他与投资相关的成本和费用、收购基金费用和支出、利息费用、税收和政府费用、任何形式的诉讼和赔偿费用和支出、与负利率投资或现金相关的保管或其他费用、短期股息费用、任何信托的高管和员工（如有）的工资和其他薪酬或费用，包括差旅费用，这些高管和员工不是顾问或其子公司或附属公司的高管、董事、股东、成员、合伙人或员工、信托和基金的组织和发行费用、股东会议的相关费用、与证券出借相关的费用或支出、根据一般会计原则资本化的任何其他费用、特别费用，以及基金董事会可能批准的其他费用。您可能支付其他费用，例如经纪佣金和其他向金融中介支付的费用，这些费用未反映在下面的表格和示例中。\n

基金年度运营费用 （您每年支付的费用，占您投资价值的百分比）

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n


管理费⁽¹⁾	0.55%
分配和服务（12b-1）费用⁽²⁾	无
其他费用⁽³⁾	0.00%
基金年度总运营费用	0.55%

⁽¹⁾ 包括 0.45% 的投资咨询费和 0.10% 的统一管理服务费。\n

⁽²⁾ 基金已采用规则12b-1分发计划，受托人委员会（“委员会”）已授权12b-1费用不超过基金股份平均每日净资产的0.25%。目前基金不支付或在本招股说明书日期起的前十二（12）个月内不会支付任何分发和服务（12b-1）费用。此后，只有在获得基金委员会批准后，才能征收12b-1费用。\n

⁽³⁾金额是针对当前财年估算的。

\n\n

⁽¹⁾

包括0.45%的投资咨询费和0.10%的统一行政服务费。\n

\n\n

⁽²⁾

基金已采用规则12b-1分发计划，受托人委员会（“委员会”）已授权12b-1费用不超过基金股份平均每日净资产的0.25%。目前基金不支付或在本招股说明书日期起的前十二（12）个月内不会支付任何分发和服务（12b-1）费用。此后，只有在获得基金委员会批准后，才能征收12b-1费用。\n

\n\n

⁽³⁾

金额是针对当前财年估算的。

示例\n

此示例旨在帮助您比较投资于该基金与其他基金的成本。该示例假设您将10,000美元投资于该基金，并在所指示的时间段内赎回所有股份。该示例还假设您的投资每年有5%的回报，并且该基金的运营费用保持不变。尽管您的实际成本可能更高或更低，但根据这些假设，您的成本将是：\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

	1 \n年	3 \n年	5 \n年	10 \n年
	$56	$177	$308	$691

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	斯特林资本大型价值聚焦因子ETF
摘要

投资组合周转\n

该基金在买卖证券（或“周转”其投资组合）时会支付交易成本，如佣金。较高的投资组合周转率可能表明较高的交易成本，并且在基金股份持有于应税账户时可能导致更高的税款。这些成本未反映在年度基金运营费用或示例中，会影响基金的表现。在最近的财年中，前身行为型大型价值股票基金（如下所述）的投资组合周转率为该基金投资组合平均价值的108.16%。\n

策略、风险和表现\n

主要策略\n

该基金是一个主动管理的交易所交易基金（“ETF”）。为了实现其投资目标，该基金在正常情况下，至少将其净资产加上用于投资目的的借款的80%投资于斯特林资本管理有限责任公司（“斯特林资本”）认定具有价值特征的大型资本化公司的股权证券。衍生品投资在计入该基金80%政策时，仅限于它们为该政策中包含的证券或一个或多个与这些证券相关的市场风险因素提供投资敞口的程度。\n

根据基金的80%政策，Sterling Capital认定的大盘股公司的股权证券是指在购买时市值处于彭博500^®指数中公司市值范围内的股权证券。截至2025年12月31日，彭博500^®指数中市值最小的公司为77亿美元，最大的公司为4.5万亿美元。\n

根据基金的80%政策，Sterling Capital认定的价值型公司的股权证券是指在购买时符合以下任一筛选条件的股权证券：(i) 被纳入彭博美国3000^®价值指数；(ii) 自由现金流收益率高于彭博美国3000^®价值指数的加权平均值，其中“自由现金流收益率”定义为过去十二个月每股市值的报告自由现金流（经营现金流减去资本支出）除以当前股价；(iii) 运营现金流倍数低于彭博美国3000^®价值指数的加权平均值，其中“运营现金流倍数”定义为当前股价除以过去十二个月每股市值的报告运营现金流；(iv) 过去十二个月市盈率低于彭博美国3000^®价值指数的加权平均值；或(v) 预计未来十二个月市盈率低于彭博美国3000^®价值指数的加权平均值。\n

在正常市场条件下，基金主要投资于美国交易的股权证券。“美国交易的股权证券”指的是在美国国内交易的美国普通股（包括房地产投资信托基金（“REITs”）和交易所交易基金（“ETFs”））以及外国公司在美国交易的股权证券。基金可能会投资于中盘股公司的证券。\n

Sterling Capital的“聚焦因子”策略采用一种有纪律的、系统化的因子驱动方法进行投资组合构建，旨在利用Sterling Capital认为由于投资者行为偏差（例如基于经验的技术或投资决策中的情绪）而具有持久性和长期性的价值和动量因子，而不是通过基本面研究或公司访问。这种方法的核心理念是，人类容易受到认知偏差和错误的影响，这些偏差和错误在市场中以可观察和可衡量的方式表现出来；该方法的关键是一个框架，用于识别因非理性投资者行为而被错误定价的股票。\n股票选择根据价值和动量因子暴露的综合排名对美国最大的1000只股票进行同等权重的排名。\n所使用的价值代理例子包括自由现金流、预期收益收益率和股息收益率。所使用的动量代理例子包括九个月的滞后价格动量和三个月的收益修正。该公司会对输出结果进行定性审查，以消除不足或错误的数据。在我们的框架中排名有利的股票会被购买，但需考虑市值、头寸规模限制和GICS行业组限制。\n

斯特林的专注因子股权团队采用一种纪律严明的因子驱动方法，利用估值和动量异常，这些异常已显示出长期的有效性。这些策略与通过基本面研究驱动团队提供的策略相辅相成，其研究和投资过程以行为金融学的原则为基础——即通过理解和利用驱动许多投资决策的心理学，可以实现成功的主动管理。人类容易受到认知偏见和错误的影响，这些偏见和错误在市场中以可观察和可衡量的方式表现出来；该过程的关键是一个能够识别因非理性投资者行为而被错误定价的股票的框架。这些偏见在市场中以可观察和可衡量的方式表现出来。该过程的关键是一个能够识别和捕捉基于行为金融学概念的估值和动量异常的框架，这些异常会带来与通常预期不同的未来回报机会。

\n\n\n\n\n\n\n\n\n

	斯特林资本大盘价值专注因子ETF
摘要

斯特林的专注因子股权团队相信，可以创建一个投资过程，以识别由投资者行为所产生的机会。\n

该基金可能会积极交易其证券。\n

主要风险\n

所有投资都存在一定风险，该基金无法保证能够实现其投资目标。投资该基金不是任何银行的存款或义务，未经任何银行的批准或担保，也不受联邦存款保险公司（“FDIC”）或其他政府机构的保险。您可能会因投资该基金而损失资金。以下是投资该基金的主要风险。\n

ETF结构风险. 该基金结构为ETF，受与交易所交易相关的风险影响，包括：\n

\n\n\n\n\n\n

●\t

该基金的份额在国家证券交易所（“交易所”）上市交易，并在二级市场以市场价格买卖。尽管预计基金份额的市场价格通常会大致接近基金的净资产值（“NAV”），但在某些时候，市场价格可能会显著高于或低于NAV，尤其是在市场波动较大或其他异常市场条件下。\n

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●\t

尽管该基金的份额在交易所上市，但可能无法维持该基金份额的活跃交易市场。\n

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●\t

该基金可能会面临交易暂停和/或从交易所退市的风险。在市场压力时期，包括在基金份额层面和基金持仓层面，这种风险会更高。\n

\n\n\n\n\n\n

●\t

只有授权参与者（“授权参与者”）才能直接与基金进行创建或赎回交易，且这些授权参与者均无义务进行创建和/或赎回交易。该基金仅有有限数量的机构可以以代理方式（即代表其他市场参与者）担任授权参与者。如果授权参与者退出业务或无法就该基金的创建或赎回订单进行操作，并且没有其他授权参与者能够站出来创建或赎回创建单位，那么基金单位可能更有可能以高于或低于净资产值（NAV）的价格交易，可能面临交易暂停或退市。\n

\n\n\n\n\n\n

●\t

如果基金按照其常规做法以现金方式进行创建和赎回，基金可能需要出售证券以筹集必要的资金用于赎回。此类出售可能导致基金实现资本利得，根据适用的税务规定，必须将这些利得分配给所有股东，从而导致股东产生潜在的税务责任，而如果赎回是以实物方式进行的，则不会产生此类责任。此类现金赎回还可能导致基金产生经纪成本，如果创建单位的购买或赎回是以实物方式进行的，这些成本可能不会产生，而此类成本的产生可能会降低基金的净资产值。使用现金创建和赎回还可能导致基金单位在市场上的买卖价差变宽，或相对于基金的NAV出现更大的溢价或折价。\n

市场风险: 基金持有的股票价格可能因股市下跌或其他国内、地区或全球事件而下跌的可能性。市场通常会周期性波动，先经历价格上涨期，然后是价格下跌期。您的投资价值往往会随着这些波动而增加或减少。\n

投资风格风险: 该基金关注的市场细分领域——大盘股、价值股和动量股——可能表现不佳，与其他类型的投资或市场平均水平相比。如果其他投资者未能认识到该公司的价值，或投资组合经理认为会导致股价上涨的因素未能出现，价值股的价格可能会下跌，或可能不会如投资组合经理预期的那样上涨。主要基于动量特征的股票可能会突然表现不佳。此外，该基金对行为金融学原则的侧重可能导致该基金的表现落后于不采用行为金融策略的基金。无法保证该基金的投资顾问在选择股票时考虑的因素以及顾问对每个因素的权重，能够有效识别和利用股价异常。\n

\n\n\n\n\n\n\n\n\n

	斯特林资本大盘价值导向因子ETF
摘要

公司特定风险: 某只特定股票可能因该公司自身因素而贬值的可能性，包括其基本特征的恶化、该公司发生不利事件，或其业务前景的下滑。\n

中等市值公司风险: 投资于中等市值公司可能更具风险性、波动性更大，并且更容易受到经济、市场和行业变化的影响，相较于投资于更大、更成熟的公司而言。因此，股价的变化可能比其他股权证券的价格更加突然或不稳定，尤其是在短期内。\n

与房地产相关的投资和REIT风险: 与房地产相关的投资可能因影响房地产行业的因素而价值下降。投资于房地产行业公司的证券相关风险包括底层房地产价值的下降、违约、提前还款、由于利率变化和对房地产及租赁物业需求变化而导致的价值变化，以及REIT发行人的管理能力和信用状况。该基金将间接承担其在所投资的每个REIT中支付的费用（包括管理费）的相应份额。\n

ETF风险: 投资ETF相关的风险包括持有ETF所设计跟踪的底层证券的风险。如果ETF缺乏流动性，可能导致ETF比其底层证券组合更加波动。当基金投资于ETF时，除了直接承担自身运营相关的费用外，基金还将承担ETF费用的相应比例。因此，持有ETF可能比直接持有底层证券组合更昂贵。\n

积极交易风险: 该基金可能会积极交易证券，这可能增加其交易成本（从而降低其业绩），并通过增加基金实现的资本利得金额以及增加基金实现的资本利得中短期资本利得的比例，增加股东需支付的税款。\n

运营与技术风险: 可能影响基金服务提供商、交易对手、市场参与者或基金所持证券发行人的网络攻击、中断或故障，可能对基金及其股东产生不利影响，包括导致基金亏损或损害基金的运作。\n

集中投资风险: 投资于受相同或类似风险因素影响的资产类别、国家、地区、行业或发行人，或价格高度相关的投资，相比更分散的投资或价格不那么相关的投资，面临更大的总体风险。\n

管理风险: 基金经理使用的投资策略可能无法实现预期结果的风险。\n

有关基金风险的更多信息，请参阅本招募说明书中的“额外投资策略和风险”部分。\n

业绩\n

以下条形图和表格提供了一些关于投资该基金风险的参考。由于重组，该基金采用的是 Sterling Capital Behavioral Large Cap Value Equity Fund（“前身 Behavioral Large Cap Value Equity Fund”）机构份额的表现。重组前，该基金尚未开始运营。条形图显示了前身 Behavioral Large Cap Value Equity Fund 的年度业绩变化（以前身 Behavioral Large Cap Value Equity Fund 的机构份额的表现来表示）。表格显示了前身 Behavioral Large Cap Value Equity Fund 过去 1、5 和 10 年的平均年收益率（以前身 Behavioral Large Cap Value Equity Fund 的机构份额的平均年收益率来表示）与广泛市场表现的一个衡量标准以及一个反映基金主要投资策略的额外指数的比较。如果前身 Behavioral Large Cap Value Equity Fund 被设计为 ETF，其表现可能会有所不同。该基金（以及前身 Behavioral Large Cap Value Equity Fund）的过去表现（税前和税后）不一定能说明该基金未来的表现。 可通过访问 www.sterlingcapitalfunds.com 或致电 1-800-228-1872 免费获取更新的业绩信息。\n

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	Sterling Capital Large Cap Value Focused Factor ETF
摘要

截至 12 月 31 日的前行为大型价值股票基金机构份额年度总回报\n

$\"\"$ \n

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年份	回报
2016	10.69%
2017	18.82%
2018	-10.31%
2019	20.17%
2020	-1.59%
2021	31.07%
2022	-5.48%
2023	12.48%
2024	20.93%
2025	23.55%

年初至今总回报. 截至 2026 年 6 月 30 日的六个月，该基金的总回报为 18.16%。\n

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最佳季度：	14.78%	3/31/2021
最差季度：	-26.64%	3/31/2020

截至 2025 年 12 月 31 日的平均年总回报

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	1 \n年	5 \n年	10 \n年
机构份额
税前回报	23.55%	15.80%	11.25%
税后分配回报	23.06%	15.36%	10.40%
税后分配和基金份额出售回报	14.23%	12.67%	9.00%
Bloomberg 美国 3000^® 指数⁽¹⁾
(不扣除费用、开支或税款) ⁽¹⁾	17.21%	13.09%	14.27%
Russell 3000^® 指数⁽¹⁾
(不扣除费用、开支或税款) ⁽¹⁾	17.15%	13.15%	14.29%
Bloomberg 美国 1000 价值^® 指数⁽²⁾
(不扣除费用、开支或税款)⁽²⁾	16.53%	13.14%	11.07%

Bloomberg 美国 3000® 指数（不扣除费用、开支或税款）

Russell 3000® 指数（不扣除费用、开支或税款）

Bloomberg 美国 1000 价值® 指数（不扣除费用、开支或税款）

⁽¹⁾Bloomberg 美国 3000^® 指数是该基金的新监管基准。此前，该基金的监管基准是 Russell 3000^® 指数。新的监管基准代表了广泛的市场表现，并用于遵守监管要求。\n

⁽²⁾Bloomberg 美国 1000 价值^® 指数是该基金的策略指数。\n

\n\n

⁽¹⁾

彭博美国3000®指数是该基金的新监管基准。此前，该基金的监管基准是罗素3000®指数。新的监管基准代表了广泛的市场表现，并用于遵守监管要求。

\n\n

⁽²⁾

彭博美国1000价值®指数是该基金的策略指数。

税后收益是根据历史最高个人联邦边际所得税率计算的，不反映州和地方税的影响。实际税后收益取决于投资者的税务情况，可能与显示的有所不同。税后收益不适用于通过税收优惠安排（如401(k)计划或个人退休账户）持有基金份额的投资者。\n

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	斯特林资本大型价值聚焦因子ETF
摘要

管理

投资顾问\n

斯特林资本管理有限责任公司（“斯特林资本”）\n

投资组合经理\n

罗伯特·W·布里奇斯，CFA^®
\n斯特林资本的高级董事总经理、首席投资官和股票主管，以及联合投资组合经理
\n自2013年8月起\n

罗伯特·O·韦勒，CFA^®
\n斯特林资本的执行董事和联合投资组合经理
\n自2013年8月起\n

基金份额的购买与出售\n

该基金的个人份额只能通过经纪人或交易商在二级市场（即全国证券交易所）以市场价格购买和出售。由于基金份额以市场价格而非净资产值（NAV）交易，基金份额可能以高于NAV（溢价）或低于NAV（折价）的价格交易。在二级市场买卖份额时，您可能会因买方愿意为基金份额支付的最高价格（买入价）和卖方愿意接受的最低价格（卖出价）之间的差额（“买卖价差”）而产生成本。当可用时，有关基金的净资产值、市场价格、溢价和折价以及买卖价差的最新信息将在www.sterlingcapital.com/etf上提供。\n

税务信息\n

该基金通常会将其净投资收益和净实现资本利得（如有）分配给股东。这些分配通常会作为普通收入或资本利得对你征税，除非你通过税收优惠安排（如401(k)计划（可能在提款时征税）或个人退休账户（可能在提款时征税））进行投资。卖出份额可能导致资本利得或损失。\n

向经纪人-交易商和其他金融中介支付的费用\n

如果你通过经纪人-交易商或其他金融中介（如银行）购买该基金，该基金及其关联公司可能会向中介支付基金份额销售及相关服务的费用。这些费用可能会因影响经纪人-交易商或其他中介及其销售人员推荐该基金而非其他投资而产生利益冲突。请向你的销售人员咨询或访问你的金融中介网站获取更多信息。

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$\"\"$		斯特林资本小型价值聚焦因子ETF
	摘要

交易代码：SCFS\n

投资目标\n

该基金通过主要投资于小型资本化公司的股权证券，旨在实现最大长期总回报。\n

费用表\n

本表描述了如果您购买、持有和卖出该基金的份额可能支付的费用和开支。斯特林资本基金（“信托”）与斯特林资本管理有限责任公司（“斯特林资本”，“顾问”或“管理人”）（“统一费用行政服务协议”）之间的统一费用行政服务协议规定，管理人将支付基金的所有运营费用，但不包括下表中列出的管理费、分配和服务（规则12b-1）费用、分配费用、任何类型的与投资相关的费用、借贷和其他投资相关成本和费用、收购基金费用和开支、利息费用、税款和政府费用、任何类型的诉讼和赔偿费用和开支、与投资或现金的负利率相关的托管或其他费用、短期股息费用、任何不属于顾问或其子公司或附属公司的官员、董事、股东、成员、合伙人或员工的信托的高级官员和员工的工资和其他薪酬或费用，包括差旅费用、信托和基金的组织和发行费用、股东会议的相关费用、与证券出借相关的费用或开支、根据一般会计原则资本化的其他费用、非常规费用，以及基金董事会可能批准的其他费用。您可能还需支付其他费用，例如经纪佣金和其他财务中介费用，这些费用未在下面的表格和示例中体现。\n

基金年度运营费用 (您每年支付的费用，占您投资价值的百分比)\n

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管理费⁽¹⁾	0.75%
分配和服务（12b-1）费用⁽²⁾	无
其他费用⁽³⁾	0.00%
基金年度总运营费用	0.75%

⁽¹⁾ 包括0.60%的投资咨询费和0.15%的统一行政服务费。\n

⁽²⁾ 该基金已采用规则12b-1分配计划，信托委员会（“委员会”）已授权不超过基金份额平均每日净资产0.25%的12b-1费用。目前该基金并未支付分配和服务（12b-1）费用，且在本招股说明书日期起的前十二（12）个月内也不会支付。此后，只有在基金委员会批准后，才能征收12b-1费用。\n

⁽³⁾ 金额是针对当前财年的估算。\n

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(1)	包括0.60%的投资咨询费和0.15%的统一行政服务费
(2)	该基金已采用规则12b-1分配计划，信托委员会（“委员会”）已授权不超过基金份额平均每日净资产0.25%的12b-1费用。目前该基金并未支付分配和服务（12b-1）费用，且在本招股说明书日期起的前十二（12）个月内也不会支付。此后，只有在基金委员会批准后，才能征收12b-1费用。
(3)	金额是针对当前财年的估算。

示例\n

此示例旨在帮助您比较投资该基金的成本与投资其他基金的成本。该示例假设您将10,000美元投资于该基金，投资时间如所指示，然后在这些时间段结束时赎回所有份额。该示例还假设您的投资每年有5%的回报，且该基金的运营费用保持不变。尽管您的实际成本可能更高或更低，但根据这些假设，您的成本将是：\n

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	1 \n年	3 \n年	5 \n年	10 \n年
	$77	$241	$418	$933

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	斯特林资本小盘价值聚焦因子ETF
概要

组合周转\n

该基金在购买和出售证券（或“周转”其投资组合）时会支付交易成本，如佣金。较高的投资组合周转率可能表明交易成本较高，并且在基金股份持有于应税账户时可能导致更高的税款。这些成本未反映在年度基金运营费用或示例中，会影响基金的表现。在最近的财政年度中，前身行为小盘价值股票基金（如下所述）的投资组合周转率为投资组合平均价值的89.59%。\n

策略、风险和业绩\n

主要策略\n

该基金是一个主动管理的交易所交易基金（\"ETF\"）。为了实现其投资目标，该基金在正常情况下，至少将其净资产加上用于投资目的的借款的80%投资于斯特林资本管理有限责任公司（\"斯特林资本\"）认定的具有价值特征的小盘公司股权证券。衍生品的投资将根据其提供的对政策中包含的证券或与这些证券相关的一个或多个市场风险因素的投资敞口，计入该基金的80%政策。\n

就该基金的80%政策而言，由斯特林资本认定的小盘公司股权证券是指在购买时市值处于彭博美国2000^®指数中公司市值范围内的股权证券。截至2025年12月31日，彭博美国2000^®指数中市值最小的公司为120万美元，市值最大的公司为151亿美元。\n

根据基金的80%政策，Sterling Capital识别的价值公司股票是指在购买时符合以下任一筛选条件的股票：(i) 被纳入彭博美国3000^®价值指数；(ii) 自由现金流收益率高于彭博美国3000^®价值指数的加权平均值，其中“自由现金流收益率”定义为过去12个月每股市值的报告自由现金流（经营现金流减去资本支出）除以当前股价；(iii) 经营现金流倍数低于彭博美国3000^®价值指数的加权平均值，其中“经营现金流倍数”定义为当前股价除以报告的经营现金流；(iv) 过去12个月市盈率低于彭博美国3000^®价值指数的加权平均值；或(v) 预计未来12个月市盈率低于彭博美国3000^®价值指数的加权平均值。\n

该基金主要投资于小型资本化公司的美国交易股票。术语“美国交易股票”指的是国内交易的美国普通股（包括房地产投资信托基金（“REITs”）和交易所交易基金（“ETFs”）的证券），以及外国公司在美国交易的股票。该基金可能会投资于中型和大型资本化公司的证券。\n

“Sterling Capital 的‘聚焦因子’策略采用一种有纪律的、系统化的因子驱动方法来构建投资组合，旨在利用 Sterling Capital 认为由于投资者行为偏差（例如基于经验的技术或投资决策中的情绪）而具有持久性和长期性的价值和动量因子，而不是通过基本面研究或公司访问来实现。这种方法的核心理念是，人类容易受到认知偏差和错误的影响，这些偏差和错误在市场中以可观察和可衡量的方式表现出来；该过程的关键是一个能够识别因非理性投资者行为而被错误定价的股票的框架。\n股票选择根据价值因子和动量因子的综合排名，对美国股票中最小的15%进行排序，其中价值因子占2/3，动量因子占1/3。所使用的价值代理指标包括自由现金流、经营现金流收益率、有形账面价值和市盈率。所使用的动量代理指标包括九个月的动量和三个月的盈利修正。该公司将对输出结果进行定性审查，以消除不足或错误的数据。在符合市值、头寸规模限制和GICS行业组限制的前提下，我们框架中排名良好的股票将被购买。

斯特林的专注因子权益团队采用一种纪律严明的因子驱动方法，利用估值和动量异常，这些异常已显示出长期的有效性。这些策略与通过基本面研究驱动团队提供的策略相辅相成，其研究和投资过程以行为金融学的原则为基础——即通过理解和利用驱动许多投资决策的心理学，可以实现成功的主动管理。人类容易受到认知偏见和错误的影响，这些偏见和错误在市场中以可观察和可衡量的方式表现出来；该过程的关键是能够识别出因非理性投资者行为而被错误定价的股票。这些偏见在市场中以可观察和可衡量的方式表现出来。该过程的关键是能够识别并捕捉基于行为金融学概念的估值和动量异常，这些异常

\n\n\n\n\n\n\n\n\n

	斯特林资本小盘价值专注因子ETF
摘要

呈现出的未来回报机会可能与通常预期的不同。斯特林的专注因子权益团队认为，可以创建一个投资过程，以识别投资者行为所产生的机会。\n

该基金可能会积极交易其证券。\n

主要风险\n

所有投资都存在一定风险，基金无法保证能够实现其投资目标。投资于该基金不是任何银行的存款或义务，未经任何银行的批准或担保，也不受联邦存款保险公司（“FDIC”）或其他政府机构的保险。通过投资该基金，您可能会损失资金。以下是投资该基金的主要风险。\n

ETF结构风险。 该基金结构为ETF，受与交易所交易相关的风险影响，包括：\n

\n\n\n\n\n\n

●\t

该基金的份额在国家证券交易所（“交易所”）上市交易，并在二级市场以市场价格买卖。尽管预计基金份额的市场价格通常会大致接近基金的净资产价值（“NAV”），但在某些时候，市场价格可能会显著高于或低于NAV，尤其是在市场波动较大或其他异常市场条件下。\n

\n\n\n\n\n\n

●\t

尽管该基金的份额在交易所上市，但可能无法维持该基金份额的活跃交易市场。\n

\n\n\n\n\n\n

●\t

该基金可能会面临交易暂停和/或从交易所退市的风险。在市场压力时期，包括在基金份额层面和基金持仓层面，这种风险会更高。\n

\n\n\n\n\n\n

●\t

只有授权参与者（“授权参与者”）才能直接与基金进行创设和赎回交易，而这些授权参与者中没有哪一个有义务进行创设和/或赎回交易。基金仅有有限数量的机构可以以代理方式（即代表其他市场参与者）担任授权参与者。如果授权参与者退出业务或无法就基金进行创设或赎回订单，并且没有其他授权参与者能够站出来进行创设或赎回创设单位，那么基金单位可能更有可能以高于或低于净资产值（NAV）的价格交易，可能面临交易暂停或退市。\n

\n\n\n\n\n\n

●\t

如果基金按照其通常做法以现金方式进行创设和赎回，基金可能需要出售证券以筹集必要的资金用于赎回。此类出售可能导致基金实现资本利得，根据适用的税务规定，必须将这些利得分配给所有股东，从而导致股东产生潜在的税务责任，而如果赎回是以实物方式进行的，则不会产生此类责任。此类现金赎回还可能导致基金产生经纪成本，如果创设单位的买卖或赎回是以实物方式进行的，这些成本可能不会产生，而此类成本的产生可能会降低基金的净资产值。使用现金创设和赎回还可能导致基金单位在市场上的买卖价差更宽，或相对于基金的NAV出现更大的溢价或折价。\n

市场风险： 基金的股票持仓可能因股市下跌或其他国内、地区或全球事件而价格下跌的可能性。市场通常会周期性地波动，先是价格上涨，然后是价格下跌。您的投资价值往往会随着这些波动而增加或减少。\n

小盘公司风险： 投资于较小的、知名度较低的公司比投资于更成熟的公司涉及更大的风险。例如，一家小公司的财务状况可能严重依赖于少数几项产品或服务。此外，小公司股票的交易频率较低，交易量较少，其市场价格往往比大公司的股票波动更大。\n

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	英镑资本小盘价值导向因子ETF
摘要

投资风格风险： 该基金关注的市场细分领域（如小盘股、价值股和动量股）可能表现弱于其他投资或市场平均水平。如果其他投资者未能认识到该公司的价值，或基金经理认为会导致股价上涨的因素未能出现，价值股的价格可能会下跌，或可能不会如基金经理预期那样上涨。主要基于动量特征的股票可能会突然表现不佳。此外，该基金对行为金融学原理的侧重可能导致其表现弱于不采用行为金融策略的基金。无法保证该基金投资顾问在选择股票时考虑的因素，以及顾问对每个因素的权重，能够有效识别和利用股价异常。

公司特定风险： 某只股票可能因公司自身因素而贬值，包括其基本面的恶化、公司内部出现不利事件，或其业务前景的恶化。

中盘公司风险： 与投资于更大、更成熟的公司相比，投资于中盘公司可能更具风险性、波动性更大，且更容易受到经济、市场和行业变化的影响。因此，股价变化可能更加突然或无序，尤其是在短期内。

房地产相关投资和REIT风险： 房地产相关投资可能因影响房地产行业的因素而贬值。投资于房地产行业公司的证券相关风险包括底层房地产价值的下降、违约、提前偿付、利率和对房地产及租赁物业需求变化导致的价值变化，以及REIT发行人的管理能力和信用状况。该基金将间接承担其在所投资的每个REIT中支付的费用（包括管理费）的相应份额。

ETF风险： 投资ETF相关的风险包括持有ETF所跟踪的底层证券的风险。如果ETF缺乏流动性，可能导致ETF比其跟踪的证券组合更加波动。当该基金投资于ETF时，除了直接承担自身运营相关的费用外，该基金还将承担ETF费用的相应比例。因此，持有ETF可能比直接持有底层证券组合更昂贵。

积极交易风险： 该基金可能会积极交易证券，这可能增加其交易成本（从而降低其表现），并可能增加股东需支付的税款，因为这会增加基金实现的资本利得，并增加基金实现的资本利得中短期资本利得的比例。

运营和技术风险：可能影响基金的托管人、交易对手、市场参与者或基金所持证券发行人的网络攻击、中断或故障可能对基金及其股东产生不利影响，包括可能导致基金损失或损害基金运作。\n

集中投资风险：投资于受相同或类似风险因素影响的资产类别、国家、地区、行业、产业或发行人，或价格高度相关的投资，其总体风险大于多元化投资或价格相关性较低的投资。\n

管理风险： 基金投资经理使用的投资策略可能无法达到预期效果的风险。\n

有关基金风险的更多信息，请参阅本招募说明书中的“额外投资策略和风险”部分。\n

业绩\n

以下柱状图和表格提供了一些关于投资于基金的风险的说明。由于重组，基金采用了Sterling Capital Behavioral Small Cap Value Equity Fund的机构份额的业绩（即“前身Behavioral Small Cap Value Equity Fund”）。重组前，基金尚未开始运营。柱状图显示了前身Behavioral Small Cap Value Equity Fund业绩的年度变化（以前身Behavioral Small Cap Value Equity Fund的机构份额的业绩为基准）。表格显示了前身Behavioral Small Cap Value Equity Fund在过去1年、5年和10年的平均年收益率（以前身Behavioral Small Cap Value Equity Fund的机构份额的平均年收益率为基准）与广泛市场表现指标以及另一个反映基金主要投资策略的指数的比较。\n

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	Sterling Capital Small Cap Value Focused Factor ETF
摘要

基金的投资策略。如果前身行为小盘价值股票基金被设计为ETF，其表现可能会有所不同。基金（以及前身行为小盘价值股票基金）的历史表现（税前和税后）不一定能说明基金未来的表现。 可通过访问 www.sterlingcapitalfunds.com 或致电 1-800-228-1872 免费获取更新后的业绩信息。\n

前身行为小盘价值股票基金机构份额年度总回报率（截至12月31日的年份）\n

$\"\"$ \n

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年份	回报率
2016	24.08%
2017	8.89%
2018	-17.34%
2019	21.95%
2020	-5.81%
2021	43.51%
2022	-11.08%
2023	19.35%
2024	10.03%
2025	8.46%

年初至今总回报率。截至 2026年6月30日的六个月，基金的总回报率为 21.63%。\n

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最佳季度：	25.24%	3/31/2021
最差季度：	-38.86%	3/31/2020

截至2025年12月31日的平均年总回报率\n

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	1 \n年	5 \n年	10 \n年
机构份额
税前回报	8.46%	12.69%	8.84%
税后分配回报	5.97%	10.95%	7.40%
税后分配和基金份额出售回报	6.85%	9.96%	6.90%
Bloomberg U.S. 3000^®指数⁽¹⁾
(不扣除费用、开支或税款) ⁽¹⁾	17.21%	13.09%	14.27%
Russell 3000^®指数⁽¹⁾
(不扣除费用、开支或税款) ⁽¹⁾	17.15%	13.15%	14.29%
Bloomberg U.S. 2000 Value 指数⁽²⁾
(不扣除费用、开支或税款) ⁽²⁾	8.96%	10.22%	9.91%

Bloomberg U.S. 3000® 指数（不扣除费用、开支或税款）

Russell 3000® 指数（不扣除费用、开支或税款）

Bloomberg U.S. 2000 Value 指数（不扣除费用、开支或税款）

⁽¹⁾Bloomberg U.S. 3000^® 指数是基金的新监管基准。此前，基金的监管基准是 Russell 3000^® 指数。新的监管基准代表了广泛的市场表现，并用于遵守监管要求。\n

⁽²⁾ Bloomberg U.S. 2000 Value^® 指数是基金的策略指数。\n

\n\n \n \n\n \n \n

(1)	Bloomberg U.S. 3000® 指数是基金的新监管基准。此前，基金的监管基准是\nthe Russell 3000® 指数。新的监管基准代表了广泛的市场表现，并用于遵守\n监管要求。\n
(2)	Bloomberg U.S. 2000 Value® 指数是基金的策略指数。\n

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	Sterling Capital 小盘价值聚焦因子 ETF
摘要

税后回报率是根据历史最高个人联邦边际所得税率计算的，不反映州和地方税的影响。实际税后回报率取决于投资者的税务状况，可能与所显示的不同。税后回报率对通过税务优惠安排（如401(k)计划或个人退休账户）持有基金份额的投资者来说并不相关。\n

管理\n

投资顾问\n

Sterling Capital Management LLC（“Sterling Capital”）\n

Portfolio Managers\n

Robert W. Bridges, CFA^®
\nSenior Managing Director, CIO and Head of Equity of Sterling Capital and Co-Portfolio Manager
\nSince June 2013\n

Robert O. Weller, CFA^®
\nExecutive Director of Sterling Capital and Co-Portfolio Manager
\nSince June 2013\n

Purchase and Sale of Fund Shares\n

Individual shares of the Fund may only be purchased and sold in the secondary market (i.e., on a national securities exchange) through a broker or dealer at market prices. Because Fund shares trade at market prices rather than at NAV, Fund shares may trade at a price greater than NAV (premium) or less than NAV (discount). When buying or selling shares in the secondary market, you may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase shares of the Fund (bid) and the lowest price a seller is willing to accept for shares of the Fund (ask) (the “bid-ask spread”). When available, recent information regarding the Fund’s NAV, market price, premiums and discounts, and bid-ask spreads will be available at www.sterlingcapital.com/etf.\n

Tax Information\n

The Fund normally distributes its net investment income and net realized capital gains, if any, to shareholders. These distributions are generally taxable to you as ordinary income or capital gains, unless you are investing through a tax-advantaged arrangement, such as a 401(k) plan (which may be taxable upon withdrawal) or an individual retirement account (which may be taxable upon withdrawal). A sale of shares may result in capital gain or loss.\n

Payments to Broker-Dealers and Other Financial Intermediaries\n

If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict 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 Web site for more information.

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$\"\"$		Sterling Capital Small Cap Value ETF
	Summary

Ticker: SCSV\n

Investment Objective\n

The Fund seeks long-term capital appreciation.\n

Fee Table\n

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. The investment advisory agreement between Sterling Capital Funds (the “Trust”) and Sterling Capital Management LLC (“Sterling Capital” or the “Adviser”) (the “Investment Advisory Agreement”) provides that the Adviser will pay all operating expenses of the Fund, except any Management Fees set forth in the table below, (ii) Distribution and Service (Rule 12b-1) Fees, distribution expenses, investment-related expenses of any kind, borrowing and other investment-related costs and fees, acquired fund fees and expenses, interest expenses, taxes and governmental fees, litigation and indemnification fees and expenses of any kind, custody or other expenses attributable to negative interest rates on investments or cash, short dividend expense, salaries and other compensation or expenses, including travel expenses, of any of the Trust’s executive officers and employees, if any, who are not officers, directors, shareholders, members, partners or employees of the Adviser or its subsidiaries or affiliates, organizational and offering expenses of the Trust and the Fund, costs related to any meetings of shareholders, fees or expenses incurred in connection with securities lending, any other expenses which are capitalized in accordance with generally accepted accounting principles, extraordinary expenses, and such other expenses as may be approved by the Fund’s Board. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.\n

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)\n

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Management Fees	0.75%
Distribution and Service (12b-1) Fees ⁽¹⁾	None
Other Expenses ⁽²⁾	0.00%
Total Annual Fund Operating Expenses	0.75%

⁽¹⁾ The Fund has adopted a Rule 12b-1 Distribution Plan, and the Board of Trustees (the “Board”) has authorized a 12b-1 fee not to exceed 0.25% of the average daily net assets of Fund shares. No Distribution and Service (12b-1) fee is currently paid by the Fund or will be made during the first twelve (12) month period from the date of this prospectus. Thereafter, 12b-1 fees may only be imposed after approval by the Fund’s Board.\n

⁽²⁾Amounts have been estimated for the current fiscal year.\n

\n\n \n \n\n \n \n

(1)

The Fund has adopted a Rule 12b-1 Distribution Plan, and the Board of Trustees (the “Board”) has authorized a 12b-1 fee not\nto exceed 0.25% of the average daily net assets of Fund shares. No Distribution and Service (12b-1) fee is currently paid by the Fund\nor will be made during the first twelve (12) month period from the date of this prospectus. Thereafter, 12b-1 fees may only be imposed\nafter approval by the Fund’s Board.

(2)

Amounts have been estimated for the current fiscal year.

Example\n

This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other 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. Although your actual costs may be higher or lower, based on these assumptions your costs would be:\n

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	1 \nYear	3 \nYears	5 \nYears	10 \nYears
	$77	$241	$418	$933

Portfolio Turnover\n

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 annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the portfolio turnover rate of the Predecessor Small Cap Value Fund (defined below) was 6.19% of the average value of its portfolio.\n

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	Sterling Capital Small Cap Value ETF
Summary

Strategy, Risks and Performance\n

Principal Strategy\n

The Fund is an actively managed exchange traded fund (“ETF”). To pursue its investment objective, the Fund will invest, under normal circumstances, at least 80% of its net assets in common stock and securities convertible into common stock of small capitalization companies identified by Sterling Capital Management LLC (“Sterling Capital”) as having value characteristics. Investments in derivatives are counted toward the Fund’s 80% policy to the extent that they provide investment exposure to the securities included within that policy or to one or more market risk factors associated with such securities.\n

For purposes of the Fund’s 80% policy, common stock and securities convertible into common stock of small capitalization companies identified by Sterling Capital are equity and equity-related securities that at the time of purchase have market capitalizations that are below the market capitalization of the largest company in the Bloomberg U.S. 2500^® Index. As of December 31, 2025, the market capitalization of the largest company in the Bloomberg U.S. 2500^® Index was $34.8 billion.\n

For purposes of the Fund’s 80% policy, equity securities of value companies identified by Sterling Capital are equity securities that at the time of purchase clear any one of several screens: (i) inclusion in the Bloomberg US 3000^® Value Index; (ii) have a free cash flow yield above the weighted average of the Bloomberg US 3000^® Value Index, where “free cash flow yield” is defined as reported free cash flow (operating cash flow less capital expenditures) per share over the trailing twelve months divided by the current share price; (iii) have an operating cash flow multiple below the weighted average of the Bloomberg US 3000^® Value Index, where “operating cash flow multiple” is defined as the current share price divided by reported operating cash flow per share over the trailing twelve months; (iv) have a trailing twelve month price/earnings ratio below the weighted average of the Bloomberg US 3000^® Value Index; or (v) have an estimated forward twelve month price/earnings ratio below the weighted average of the Bloomberg US 3000^® Value Index.\n

Sterling Capital believes that undervalued companies with good earnings prospects have superior appreciation potential with reasonable\nlevels of risk. Quantitatively, Sterling Capital focuses on a stock's fundamental valuation relative to its peers. Sterling Capital considers\nadditional quantitative measures, such as earnings momentum and relative price strength. Qualitatively, Sterling Capital utilizes internal\nand third-party research and analysis to identify business catalysts which will serve to drive future earnings growth, increase investor\ninterest and expand valuation.\n

Principal Risks\n

All investments carry a certain amount of risk and the Fund cannot guarantee that it will achieve its investment objective. An investment in the Fund is not a deposit or obligation of any bank, is not endorsed or guaranteed by any bank and is not insured by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency. You may lose money by investing in the Fund. Below are the principal risks of investing in the Fund.\n

ETF Structure Risks. The Fund is structured as an ETF and is subject to risks related to exchange trading, including:\n

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●\t

The Fund’s shares are listed for trading on a national securities exchange (the “Exchange”) and are bought and sold on the secondary market at market prices. Although it is expected that the market price of Fund shares will typically approximate the Fund’s net asset value (“NAV”), there may be times when the market price reflects a significant premium or discount to NAV, including during periods of high market volatility or other unusual market conditions.\n

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●\t

Although the Fund’s shares are listed on the Exchange, it is possible that an active trading market in the Fund’s shares may not be maintained.\n

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The Fund could potentially face trading halts and/or delisting from the Exchange. This risk is heightened in times of market stress, including at both the Fund share level and at the Fund holdings level.\n

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	Sterling Capital Small Cap Value ETF
Summary

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Only an authorized participant (an “Authorized Participant”) may engage in creation or redemption transactions directly with the Fund, and none of those Authorized Participants is obligated to engage in creation and/or redemption transactions. The Fund has a limited number of institutions that may act as Authorized Participants on an agency basis (i.e., on behalf of other market participants). To the extent that Authorized Participants exit the business or are unable to proceed with creation or redemption orders with respect to the Fund and no other Authorized Participant is able to step forward to create or redeem Creation Units, Fund shares may be more likely to trade at a premium or discount to NAV and possibly face trading halts or delisting.\n

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To the extent that the Fund effects its creation and redemptions in cash, as it intends regularly to do, the Fund may need to sell securities to generate the necessary funds for a redemption. Such sales may result in the Fund realizing capital gains, which under applicable tax regulations must be distributed to all shareholders, leading to potential tax liabilities for shareholders that would not have been incurred had the redemptions been in-kind. Such cash redemptions may also result in the Fund incurring brokerage costs that might not have been incurred if the purchase or redemption of Creation Units were effected in kind, and the imposition of such costs may decrease the Fund’s net asset value. The use of cash creations and redemptions may also cause the Fund’s shares to trade in the market at wider bid-ask spreads or greater premiums or discounts to the Fund’s NAV.\n

Market Risk: The possibility that the Fund’s stock holdings will decline in price because of a stock market decline or other domestic, regional, or global events. Markets generally move in cycles, with periods of rising prices followed by periods of falling prices. The value of your investment will tend to increase or decrease in response to these movements.\n

Small Capitalization Company Risk: Investing in smaller, lesser-known companies involves greater risk than investing in those that are more established. A small company’s financial well-being may, for example, depend heavily on just a few products or services. In addition, small company stocks tend to trade less frequently and in lesser quantities, and their market prices often fluctuate more, than those of larger firms.\n

Investment Style Risk: The possibility that the market segment on which this Fund focuses - small cap value stocks - will underperform other kinds of investments or market averages. A value stock may decrease in price or may not increase in price as anticipated by the portfolio manager if other investors fail to recognize the company’s value or the factors that the portfolio manager believes will cause the stock price to increase do not occur.\n

Convertible Securities Risk: Convertible securities are securities that may be converted or exchanged into shares of an underlying stock or other asset at a stated exchange ratio or predetermined price. The market value of convertible securities tends to decline as interest rates increase and may be affected by changes in the price of the underlying security.\n

Company-Specific Risk: The possibility that a particular stock may lose value due to factors specific to the company itself, including deterioration of its fundamental characteristics, an occurrence of adverse events at the company, or a downturn in its business prospects.\n

Operational and Technology Risk: Cyber-attacks, disruptions, or failures that affect the Fund’s service providers, counterparties, market participants, or issuers of securities held by the Fund may adversely affect the Fund and its shareholders, including by causing losses for the Fund or impairing Fund operations.\n

Focused Investment Risk: Investments focused in asset classes, countries, regions, sectors, industries, or issuers that are subject to the same or similar risk factors and investments whose prices are closely correlated are subject to greater overall risk than investments that are more diversified or whose prices are not as closely correlated.\n

Management Risk: The risk that an investment technique used by the Fund’s portfolio manager may fail to produce the intended result.\n

For more information about the Fund’s risks, please see the “Additional Investment Strategies and Risks” section in this Prospectus.\n

Performance\n

The following bar chart and table provide some indication of the risks of investing in the Fund. The Fund is adopting the performance of the Institutional Shares of the Sterling Capital Small Cap Value Fund (the “Predecessor Small Cap Value Fund”) as a result of the Reorganization. Prior to the Reorganization, the Fund had not yet commenced operations. The bar chart shows changes in the Predecessor Small Cap Value Fund’s

The following bar chart and table provide some indication of the risks of investing in the Fund. The Fund is adopting the performance\nof the Institutional Shares of the Sterling Capital Small Cap Value Fund (the “Predecessor Small Cap Value Fund”) as a result\nof the Reorganization. Prior to the Reorganization, the Fund had not yet commenced operations. The bar chart shows changes in the Predecessor\nSmall Cap Value Fund’s performance from year to year (represented by the performance of the Predecessor Small Cap Value Fund’s Institutional Shares). The\ntable shows how the Predecessor Small Cap Value Fund’s average annual returns (represented by the average annual returns of the\nPredecessor Small Cap Value Fund’s Institutional Shares) for 1, 5 and 10 years compared with those of a broad measure of market\nperformance and an additional index that reflects the principal investment strategies of the Fund.

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	Sterling Capital Small Cap Value ETF
Summary

performance from year to year (represented by the performance of the Predecessor Small Cap Value Fund’s Institutional Shares). The table shows how the Predecessor Small Cap Value Fund’s average annual returns (represented by the average annual returns of the Predecessor Small Cap Value Fund’s Institutional Shares) for 1, 5 and 10 years compared with those of a broad measure of market performance and an additional index that reflects the principal investment strategies of the Fund. Had the Predecessor Small Cap Value Fund been structured as an ETF, its performance may have differed. The Fund’s (and the Predecessor Small Cap Value Fund’s) past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. Updated performance information is available at no cost by visiting www.sterlingcapitalfunds.com or by calling 1-800-228-1872. \n

Predecessor Small Cap Value Fund Institutional Shares Annual Total Returns for years ended 12/31 ^\n

$\"\"$ \n

\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n

Year	Return
2016	25.25%
2017	13.20%
2018	-14.46%
2019	24.51%
2020	3.19%
2021	31.61%
2022	-14.46%
2023	17.70%
2024	13.57%
2025	11.49%

Year-to-date total return. The fund’s total return for the six months ended June 30, 2026, was 24.95%.\n

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Best quarter:	27.59%	12/31/2020
Worst quarter:	-32.38%	3/31/2020

Average Annual Total Returns as of December 31, 2025\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

	1 \nYear	5 \nYears	10 \nYears
Institutional Shares
Return Before Taxes	11.49%	10.90%	10.09%
Return After Taxes on Distributions	7.09%	5.40%	6.23%
Return After Taxes on Distributions and Sale of Fund Shares	10.08%	7.95%	7.55%
Bloomberg U.S. 3000^® Index⁽¹⁾
(reflects\n no deductions for fees, expenses, or taxes) ⁽¹⁾	17.21%	13.09%	14.27%
Russell 3000^® Index⁽¹⁾
(reflects\n no deductions for fees, expenses, or taxes) ⁽¹⁾	17.15%	13.15%	14.29%
Bloomberg U.S. 2000 Value^® Index⁽²⁾
(reflects\n no deductions for fees, expenses, or taxes) ⁽²⁾	8.96%	10.22%	9.91%

Bloomberg U.S. 3000® Index (reflects no deductions for fees, expenses, or taxes)

Russell 3000® Index (reflects no deductions for fees, expenses, or taxes)

Bloomberg U.S. 2000 Value® Index (reflects no deductions for fees, expenses, or taxes)

⁽¹⁾ The Bloomberg U.S. 3000^® Index is the Fund’s new regulatory benchmark. Previously, the Fund’s regulatory benchmark was the Russell 3000^® Index. The new regulatory benchmark represents a broad measure of market performance and is included to comply with regulatory requirements.\n

⁽²⁾ The Bloomberg U.S. 2000 Value^® Index is the strategy index for the Fund.\n

\n\n \n \n\n \n \n

(1)	The Bloomberg U.S. 3000® Index is the Fund’s new regulatory benchmark. Previously, the Fund’s regulatory benchmark was\nthe Russell 3000® Index. The new regulatory benchmark represents a broad measure of market performance and is included to comply with\nregulatory requirements.
(2)	The Bloomberg U.S. 2000 Value® Index is the strategy index for the Fund.

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	Sterling Capital Small Cap Value ETF
Summary

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 an investor’s tax situation and may differ from those shown. After-tax returns are not relevant to investors who hold their Fund shares through tax-advantaged arrangements such as 401(k) plans or individual retirement accounts.\n

Management\n

Investment Adviser\n

Sterling Capital Management LLC (“Sterling Capital”)\n

Portfolio Managers\n

Gerald M. Van Horn, CFA^®
\nExecutive Director of Sterling Capital and Lead Portfolio Manager
\nSince November 2015\n

Andrew T. DiZio, CFA^®
\nExecutive Director of Sterling Capital and Associate Portfolio Manager
\nSince November 2015\n

Purchase and Sale of Fund Shares\n

Tax Information\n

Payments to Broker-Dealers and Other Financial Intermediaries\n

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$\"\"$		Sterling Capital North Carolina Intermediate Tax-Free ETF
	Summary

Ticker: SCNC\n

Investment Objective\n

The Fund seeks current income exempt from federal and North Carolina income taxes consistent with preservation of capital.\n

Fee Table\n

This table describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. The unitary fee administrative services agreements between Sterling Capital Funds (the “Trust”) and Sterling Capital Management LLC (“Sterling Capital”, the “Adviser”, or the “Administrator”) (the “Unitary Fee Administrative Services Agreement”) provides that the Administrator will pay all operating expenses of the Fund, except the Management Fees set forth in the table below, Distribution and Service (Rule 12b-1) Fees, distribution expenses, investment related expenses of any kind, borrowing and other investment-related costs and fees, acquired fund fees and expenses, interest expenses, taxes and governmental fees, litigation and indemnification fees and expenses of any kind, custody or other expenses attributable to negative interest rates on investments or cash, short dividend expense, salaries and other compensation or expenses, including travel expenses, of any of the Trust’s executive officers and employees, if any, who are not officers, directors, shareholders, members, partners or employees of the Adviser or its subsidiaries or affiliates, organizational and offering expenses of the Trust and the Fund, costs related to any meetings of shareholders, fees or expenses incurred in connection with securities lending, any other expenses which are capitalized in accordance with generally accepted accounting principles, extraordinary expenses, and such other expenses as may be approved by the Fund’s Board. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below.\n

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)\n

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Management Fees⁽¹⁾	0.45%
Distribution and Service (12b-1) Fees⁽²⁾	None
Other Expenses⁽³⁾	0.00%
Total Annual Fund Operating Expenses	0.45%

⁽¹⁾ Includes an investment advisory fee of 0.35% and a unitary administrative services fee of 0.10%.\n

⁽²⁾ The Fund has adopted a Rule 12b-1 Distribution Plan, and the Board of Trustees (the “Board”) has authorized a 12b-1 fee not to exceed 0.25% of the average daily net assets of Fund shares. No Distribution and Service (12b-1) fee is currently paid by the Fund or will be made during the first twelve (12) month period from the date of this prospectus. Thereafter, 12b-1 fees may only be imposed after approval by the Fund’s Board.\n

⁽³⁾ Amounts have been estimated for the current fiscal year.\n

\n\n \n \n\n \n \n\n \n \n

(1)	Includes an investment advisory fee of 0.35% and a unitary administrative services fee of 0.10%.
(2)	The Fund has adopted a Rule 12b-1 Distribution Plan, and the Board of Trustees (the “Board”) has authorized a 12b-1 fee not\nto exceed 0.25% of the average daily net assets of Fund shares. No Distribution and Service (12b-1) fee is currently paid by the Fund\nor will be made during the first twelve (12) month period from the date of this prospectus. Thereafter, 12b-1 fees may only be imposed\nafter approval by the Fund’s Board.
(3)	Amounts have been estimated for the current fiscal year.

Example\n

This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other 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. Although your actual costs may be higher or lower, based on these assumptions your costs would be:\n

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	1 \nYear	3 \nYears	5 \nYears	10 \nYears
	$46	$145	$253	$568

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	Sterling Capital North Carolina Intermediate Tax-Free ETF
Summary

Portfolio Turnover\n

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 annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the portfolio turnover rate of the Predecessor North Carolina Intermediate Tax-Free Fund (defined below) was 29.62% of the average value of its portfolio.\n

Strategy, Risks and Performance\n

Principal Strategy\n

The Fund is an actively managed exchange traded fund (“ETF”). As a matter of fundamental policy, the Fund will invest, under normal market conditions, at least 80% of its net assets plus borrowings for investment purposes in investments the income from which is exempt from federal income tax, alternative minimum tax, and North Carolina personal income tax (“North Carolina Tax-Exempt Obligations”). The Fund invests, under normal market conditions, primarily in municipal securities of the State of North Carolina and its political subdivisions that provide income exempt from both federal personal income tax and North Carolina personal income tax. Municipal securities in which the Fund will invest include municipal notes and bonds, general obligation bonds, special revenue bonds, private activity bonds, lease obligations, certificates of participation, variable rate demand notes, and tax-exempt commercial paper. The Fund invests in North Carolina municipal securities only if they are “investment grade” (rated at the time of purchase in one of the four highest rating categories by a nationally recognized statistical rating organization, or are determined by the portfolio manager to be of comparable quality). The Fund will maintain an average duration of 3.5 to 8 years. The Fund’s dollar-weighted average maturity is expected to be more than 3 years but less than 10 years. Duration is the expected life of a fixed income security and is used to determine the sensitivity of the security’s price to changes in interest rates. Maturity merely measures the time until final payment is due. Unlike maturity, duration accounts for the time until all payments of interest and principal on a security are expected to be made, including how these payments are affected by prepayments and by changes in interest rates.\n

In managing the Fund’s portfolio, the portfolio manager uses a “top down” investment management approach focusing on interest rates and credit quality. The portfolio manager sets, and continually adjusts, a target for the interest rate sensitivity of the Fund’s portfolio based on expectations about interest rate movements. The portfolio manager then selects securities consistent with this target based on their individual characteristics.\n

The portfolio manager may consider selling a security owned by the Fund to reposition the Fund along the yield curve, to adjust the Fund’s average maturity or duration, to replace a security with one that the portfolio manager believes offers greater total return potential, or to exit a security whose credit fundamentals are deteriorating.\n

The Fund is non-diversified and, therefore, may invest in a limited number of issuers.\n

Principal Risks\n

ETF Structure Risks. The Fund is structured as an ETF and is subject to risks related to exchange trading, including:\n

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●\t

\n\n\n\n\n\n

●\t

Although the Fund’s shares are listed on the Exchange, it is possible that an active trading market in the Fund’s shares may not be maintained.\n

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	Sterling Capital North Carolina Intermediate Tax-Free ETF
Summary

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●\t

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●\t

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●\t

Interest Rate Risk: The possibility that the value of the Fund’s investments will decline due to an increase in interest rates. Interest rate risk is generally higher for longer-term debt instruments and lower for shorter-term debt instruments.\n

State-Specific Risk: By concentrating its investments in securities issued by North Carolina and its political subdivisions, the Fund may be more vulnerable to unfavorable developments in North Carolina (e.g., adverse changes in North Carolina economic conditions, government policies or tax revenues and expenditures) than funds that are more geographically diversified.\n

Credit Risk: The possibility that an issuer cannot make timely interest and principal payments on its debt securities such as bonds. The lower a security’s rating, the greater its credit risk. Changes in actual or perceived creditworthiness may occur quickly.\n

Tax Risk: The risk that the issuer of the securities will fail to comply with certain requirements of the Internal Revenue Code, which would cause adverse tax consequences. Changes or proposed changes in federal or state tax laws may cause the prices of tax-exempt securities to fall and/or may affect the tax-exempt status of the securities in which the Fund invests.\n

Municipal Securities Risk: Municipal obligations are issued by or on behalf of states, territories and possessions of the United States and their political subdivisions, agencies and instrumentalities and the District of Columbia to obtain funds for various public purposes. Municipal obligations are subject to more credit risk than U.S. government securities that are supported by the full faith and credit of the United States. The ability of municipalities to meet their obligations will depend on the availability of tax and other revenues, economic, political and other conditions within the state and municipality, and the underlying fiscal condition of the state and municipality. As with other fixed income securities, municipal securities also expose their holders to market risk because their values typically change as interest rates fluctuate.\n

Non-Diversified Risk: Because the Fund is non-diversified, it may invest a greater percentage of its assets in a particular issuer compared with other funds. Accordingly, the Fund’s portfolio may be more sensitive to changes in the market value of a single issuer or industry.\n

Prepayment/Call Risk: When obligations are prepaid and when securities are called, the Fund may have to reinvest in securities with a lower yield or fail to recover additional amounts (i.e., premiums) paid for securities with higher interest rates, resulting in an unexpected capital loss. Call risk is the possibility that, during periods of declining interest rates, a bond issuer will “call” - or repay - higher-yielding bonds before their stated maturity date. In both cases, investors receive their principal back and are typically forced to reinvest it in bonds that pay lower interest rates.\n

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	Sterling Capital North Carolina Intermediate Tax-Free ETF
Summary

Estimated Maturity Risk: The possibility that an underlying security holder will exercise its right to pay principal on an obligation earlier or later than expected. This may happen when there is a rise or fall in interest rates. These events may shorten or lengthen the duration (i.e., interest rate sensitivity) and potentially reduce the value of these securities.\n

Income Risk: The possibility that the Fund’s income will decline due to a decrease in interest rates. Income risk is generally higher for shorter-term bonds and lower for longer-term bonds.\n

Fixed Income Market Risk: Fixed income securities markets may, in response to governmental intervention, economic or market developments (including potentially a reduction in the number of broker-dealers willing to engage in market-making activity), or other factors, experience periods of increased volatility and reduced liquidity.\n

Counterparty Risk: The possibility that a counterparty to a contract will default or otherwise become unable to honor a financial obligation.\n

Variable and Floating Rate Instrument Risk: Variable and floating rate instruments are generally less sensitive to interest rate changes than other fixed rate instruments; however, the value of floating rate instruments may decline if their interest rates do not rise as quickly, or as much, as general interest rates.\n

Management Risk: The risk that an investment technique used by the Fund’s portfolio manager may fail to produce the intended result.\n

For more information about the Fund’s risks, please see the “Additional Investment Strategies and Risks” section in this Prospectus.\n

Performance\n

The following bar chart and table provide some indication of the risks of investing in the Fund. The Fund is adopting the performance of the Institutional Shares of the Sterling Capital North Carolina Intermediate Tax-Free Fund (the “Predecessor North Carolina Intermediate Tax-Free Fund”) as a result of the Reorganization. Prior to the Reorganization, the Fund had not yet commenced operations. The bar chart shows changes in the Predecessor North Carolina Intermediate Tax-Free Fund’s performance from year to year (represented by the performance of the Predecessor North Carolina Intermediate Tax-Free Fund’s Institutional Shares). The table shows how the Predecessor North Carolina Intermediate Tax-Free Fund’s average annual returns (represented by the average annual returns of the Predecessor North Carolina Intermediate Tax-Free Fund’s Institutional Shares) for 1, 5 and 10 years compared with those of a broad measure of market performance and an additional index that reflects the principal investment strategies of the Fund. Had the Predecessor North Carolina Intermediate Tax-Free Fund been structured as an ETF, its performance may have differed. The Fund’s (and the Predecessor North Carolina Intermediate Tax-Free Fund’s) past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. Updated performance information is available at no cost by visiting www.sterlingcapitalfunds.com or by calling 1-800-228-1872. \n

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	Sterling Capital North Carolina Intermediate Tax-Free ETF
Summary

Predecessor North Carolina Intermediate Tax-Free Fund Institutional Shares Annual Total Returns for years ended 12/31\n

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Year	Return
2016	-0.41%
2017	3.27%
2018	0.72%
2019	5.90%
2020	4.41%
2021	-0.23%
2022	-5.86%
2023	3.87%
2024	0.20%
2025	4.26%

Year-to-date total return. The fund’s total return for the six months ended June 30, 2026, was 1.04%.\n

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Best quarter:	6.09%	12/31/2023
Worst quarter:	-5.07%	3/31/2022

Average Annual Total Returns as of December 31, 2025\n

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	1 \nYear	5 \nYears	10 \nYears
Institutional Shares
Return Before Taxes	4.26%	0.38%	1.56%
Return After Taxes on Distributions	4.23%	0.37%	1.54%
Return After Taxes on Distributions and Sale of Fund Shares	3.61%	0.78%	1.70%
Bloomberg Municipal Bond Index⁽¹⁾
(reflects\n no deductions for fees, expenses, or taxes) ⁽¹⁾	4.25%	0.80%	2.34%
ICE BofA 2-17 Year Municipal Bond Index⁽²⁾
(reflects\n no deductions for fees, expenses, or taxes) ⁽²⁾	5.17%	1.14%	2.31%

Bloomberg Municipal Bond Index (reflects no deductions for fees, expenses, or taxes)

ICE BofA 2-17 Year Municipal Bond Index (reflects no deductions for fees, expenses, or taxes)

⁽¹⁾ The Bloomberg Municipal Bond Index is the Fund’s regulatory benchmark, which represents a broad measure of market performance and is included to comply with regulatory requirements.\n

⁽²⁾ The ICE BofA 2-17 Year Municipal Bond Index is the strategy index for the Fund.\n

\n\n \n \n\n \n \n

(1)	The Bloomberg Municipal Bond Index is the Fund’s regulatory benchmark, which represents a broad measure of market performance and\nis included to comply with regulatory requirements.
(2)	The ICE BofA 2-17 Year Municipal Bond Index is the strategy index for the Fund.

Management\n

Investment Adviser\n

Sterling Capital Management LLC (“Sterling Capital”)\n

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	Sterling Capital North Carolina Intermediate Tax-Free ETF
Summary

Portfolio Managers\n

Michael P. McVicker
\nExecutive Director of Sterling Capital and Co-Portfolio Manager
\nSince November 2025
\n(formerly Associate Portfolio Manager from February 2016 - November 2025)\n

Mark Merullo
\nDirector of Sterling Capital and Co-Portfolio Manager
\nSince November 2025\n

Purchase and Sale of Fund Shares\n

Tax Information\n

Payments to Broker-Dealers and Other Financial Intermediaries\n

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$\"\"$		Sterling Capital Virginia Intermediate Tax-Free ETF
	Summary

Ticker: SCVA\n

Investment Objective\n

The Fund seeks current income exempt from federal and Virginia income taxes consistent with preservation of capital.\n

Fee Table\n

Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n


Management Fees⁽¹⁾	0.45%
Distribution and Service (12b-1) Fees⁽²⁾	None
Other Expenses⁽³⁾	0.00%
Total Annual Fund Operating Expenses	0.45%

⁽¹⁾ Includes an investment advisory fee of 0.35% and a unitary administrative services fee of 0.10%.\n

⁽³⁾ Amounts have been estimated for the current fiscal year.\n

\n\n \n \n\n \n \n\n \n \n

(1)	Includes an investment advisory fee of 0.35% and a unitary administrative services fee of 0.10%.
(2)	The Fund has adopted a Rule 12b-1 Distribution Plan, and the Board of Trustees (the “Board”) has authorized a 12b-1 fee not\nto exceed 0.25% of the average daily net assets of Fund shares. No Distribution and Service (12b-1) fee is currently paid by the Fund\nor will be made during the first twelve (12) month period from the date of this prospectus. Thereafter, 12b-1 fees may only be imposed\nafter approval by the Fund’s Board.
(3)	Amounts have been estimated for the current fiscal year.

Example\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

	1 \nYear	3 \nYears	5 \nYears	10 \nYears
	$46	$145	$253	$568

\n\n\n\n\n\n\n\n\n

	Sterling Capital Virginia Intermediate Tax-Free ETF
Summary

Portfolio Turnover\n

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 annual fund operating expenses or in the example, affect the Fund’s performance. During the most recent fiscal year, the portfolio turnover rate of the Predecessor Sterling Capital Virgina Intermediate Tax-Free Fund (defined below) was 17.40% of the average value of its portfolio.\n

Strategy, Risks and Performance\n

Principal Strategy\n

The Fund is an actively managed exchange traded fund (“ETF”). As a matter of fundamental policy, the Fund will invest, under normal market conditions, at least 80% of its net assets plus borrowings for investment purposes in investments the income from which is exempt from federal income tax, alternative minimum tax, and Virginia personal income tax (“Virginia Tax-Exempt Obligations”). The Fund invests, under normal market conditions, primarily in municipal securities of the Commonwealth of Virginia and its political subdivisions that provide income exempt from both federal personal income tax and Virginia personal income tax. Municipal securities in which the Fund will invest include municipal notes and bonds, general obligation bonds, special revenue bonds, private activity bonds, lease obligations, certificates of participation, variable rate demand notes, and tax-exempt commercial paper. The Fund invests in Virginia municipal securities only if they are “investment grade” (rated at the time of purchase in one of the four highest rating categories by a nationally recognized statistical rating organization, or are determined by the portfolio manager to be of comparable quality). The Fund will maintain an average duration of 3.5 to 8 years. The Fund’s dollar-weighted average maturity is expected to be more than 3 years but less than 10 years. Duration is the expected life of a fixed income security and is used to determine the sensitivity of the security’s price to changes in interest rates. Maturity merely measures the time until final payment is due. Unlike maturity, duration accounts for the time until all payments of interest and principal on a security are expected to be made, including how these payments are affected by prepayments and by changes in interest rates.\n

The Fund is non-diversified and, therefore, may invest in a limited number of issuers.\n

Principal Risks\n

ETF Structure Risks. The Fund is structured as an ETF and is subject to risks related to exchange trading, including:\n

\n\n\n\n\n\n

●\t

\n\n\n\n\n\n

●\t

Although the Fund’s shares are listed on the Exchange, it is possible that an active trading market in the Fund’s shares may not be maintained.\n

\n\n\n\n\n\n

●\t

\n\n\n\n\n\n\n\n\n

	Sterling Capital Virginia Intermediate Tax-Free ETF
Summary

\n\n\n\n\n\n

●\t

\n\n\n\n\n\n\n\n

●\t

State-Specific Risk: By concentrating its investments in securities issued by Virginia and its political subdivisions, the Fund may be more vulnerable to unfavorable developments in Virginia (e.g., adverse changes in Virginia economic conditions, government policies or tax revenues and expenditures) than funds that are more geographically diversified.\n

\n\n\n\n\n\n\n\n\n

	Sterling Capital Virginia Intermediate Tax-Free ETF
Summary

Income Risk: The possibility that the Fund’s income will decline due to a decrease in interest rates. Income risk is generally higher for shorter-term bonds and lower for longer-term bonds.\n

Counterparty Risk: The possibility that a counterparty to a contract will default or otherwise become unable to honor a financial obligation.\n

Management Risk: The risk that an investment technique used by the Fund’s portfolio manager may fail to produce the intended result.\n

For more information about the Fund’s risks, please see the “Additional Investment Strategies and Risks” section in this Prospectus.\n

Performance\n

The following bar chart and table provide some indication of the risks of investing in the Fund. The Fund is adopting the performance of the Institutional Shares of the Sterling Capital Virginia Intermediate Tax-Free Fund (the “Predecessor Virginia Intermediate Tax-Free Fund”) as a result of the Reorganization. Prior to the Reorganization, the Fund had not yet commenced operations. The bar chart shows changes in the Predecessor Virginia Intermediate Tax-Free Fund’s performance from year to year (represented by the performance of the Predecessor Virginia Intermediate Tax-Free Fund’s Institutional Shares). The table shows how the Predecessor Virginia Intermediate Tax-Free Fund’s average annual returns (represented by the average annual returns of the Predecessor Virginia Intermediate Tax-Free Fund’s Institutional Shares) for 1, 5 and 10 years compared with those of a broad measure of market performance and an additional index that reflects the principal investment strategies of the Fund. Had the Predecessor Virginia Intermediate Tax-Free Fund been structured as an ETF, its performance may have differed. The Fund’s (and the Predecessor Virginia Intermediate Tax-Free Fund’s) past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. Updated performance information is available at no cost by visiting www.sterlingcapitalfunds.com or by calling 1-800-228-1872.\n

\n\n\n\n\n\n\n\n\n

	Sterling Capital Virginia Intermediate Tax-Free ETF
Summary

Predecessor Virginia Intermediate Tax-Free Fund Institutional Shares Annual Total Returns for years ended 12/31\n

$\"\"$ \n

\n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n\n \n \n

Year	Return
2016	-0.53%
2017	3.28%
2018	0.78%
2019	6.13%
2020	4.28%
2021	-0.60%
2022	-5.60%
2023	3.80%
2024	0.09%
2025	3.80%

Year-to-date total return. The fund’s total return for the six months ended June 30, 2026, was 1.10%.\n

\n\n\n\n\n\n\n\n\n\n\n

Best quarter:	5.94%	12/31/2023
Worst quarter:	-5.08	3/31/2022

Average Annual Total Returns as of December 31, 2025\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

	1 \nYear	5 \nYears	10 \nYears
Institutional Shares
Return Before Taxes	3.80%	0.24%	1.49%
Return After Taxes on Distributions	3.77%	0.22%	1.46%
Return After Taxes on Distributions and Sale of Fund Shares	3.28%	0.64%	1.62%
Bloomberg Municipal Bond Index⁽¹⁾
(reflects\n no deductions for fees, expenses, or taxes) ⁽¹⁾	4.25%	0.80%	2.34%
ICE BofA 2-17 Year Municipal Bond Index⁽²⁾
(reflects\n no deductions for fees, expenses, or taxes) ⁽²⁾	5.17%	1.14%	2.31%

Bloomberg Municipal Bond Index (reflects no deductions for fees, expenses, or taxes)

ICE BofA 2-17 Year Municipal Bond Index (reflects no deductions for fees, expenses, or taxes)

⁽¹⁾ The Bloomberg Municipal Bond Index is the Fund’s regulatory benchmark, which represents a broad measure of market performance and is included to comply with regulatory requirements.\n

⁽²⁾ The ICE BofA 2-17 Year Municipal Bond Index is the strategy index for the Fund.\n

\n\n \n \n\n \n \n

(1)	The Bloomberg Municipal Bond Index is the Fund’s regulatory benchmark, which represents a broad measure of market performance and\nis included to comply with regulatory requirements.
(2)	The ICE BofA 2-17 Year Municipal Bond Index is the strategy index for the Fund.

Management\n

Investment Adviser\n

Sterling Capital Management LLC (“Sterling Capital”)\n

\n\n\n\n\n\n\n\n\n

	Sterling Capital Virginia Intermediate Tax-Free Fund
Summary

Portfolio Managers\n

Michael P. McVicker
\nExecutive Director of Sterling Capital and Co-Portfolio Manager
\nSince November 2025
\n(formerly Associate Portfolio Manager from February 2016 - November 2025)\n

Mark Merullo
\nDirector of Sterling Capital and Co-Portfolio Manager
\nSince November 2025\n

Purchase and Sale of Fund Shares\n

Tax Information\n

Payments to Broker-Dealers and Other Financial Intermediaries\n

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\n\n\n\n\n\n\n\n\n\n

$\"\"$
	Additional Investment Strategies and Risks

The investment objective and principal investment strategies of each Fund are described under its respective “Investment Objective” and “Strategy, Risks and Performance” section earlier in this Prospectus. The following information supplements the investment objective and principal investment strategies of each Fund and provides additional information regarding non-principal strategies in which a Fund may engage.\n

Equity Funds\n

Sterling Capital Large Cap Value Focused Factor ETF, Sterling Capital Small Cap Value Focused Factor ETF, and Sterling Capital Small Cap Value ETF (“Equity Funds”)\n

All Equity Funds: Foreign Securities - Each Fund may invest in foreign securities (including securities of issuers located in emerging markets) through the purchase of American Depositary Receipts (“ADRs”) or the purchase of U.S. traded equity stocks of foreign companies. The Equity Funds will not invest in foreign securities if immediately after a purchase and as a result of the purchase the total value of foreign securities owned by a Fund would exceed 25% of the value of its total assets. \n

Sterling Capital Small Cap Value ETF - The common stocks in which a Fund invests are of well-established companies that Sterling Capital Management LLC (“Sterling Capital” or the “Adviser”) believes are underpriced based on traditional measures of valuation such as price-to-cash flow and price-to-earnings ratios.\n

Bond Funds\n

Sterling Capital North Carolina Intermediate Tax-Free ETF and Sterling Capital Virginia Intermediate Tax-Free ETF (“Tax-Free Bond Funds”) (the Tax-Free Bond Funds, together with the Equity Funds, the “Funds”)\n

All Tax-Free Bond Funds: Portfolio Maturity - Certain debt securities such as, but not limited to, mortgage backed securities, collateralized mortgage obligations and asset-backed securities, as well as securities subject to prepayment of principal prior to the stated maturity date, are expected to be repaid prior to their stated maturity dates. As a result, the effective maturity of these securities is expected to be shorter than the stated maturity. For purposes of calculating a Fund’s weighted average portfolio maturity, the effective maturity of these securities will be used. \n

“Dollar-weighted average maturity” - As used in a Fund’s “Principal Strategy” section, the term dollar-weighted average maturity is derived by multiplying the market value of each investment by the time remaining to its expected maturity, adding these calculations, and then dividing the total by the value of a Fund’s portfolio.\n

Each Fund may invest up to 20% of its net assets in taxable obligations or debt securities, the interest income from which may be subject to the federal alternative minimum tax for individual shareholders. \n

Temporary Defensive Measures. If deemed appropriate under the circumstances, each Tax-Free Bond Fund may invest in cash or securities subject to federal income tax. This may cause a Fund to receive and distribute taxable income to investors, and to that extent to fail to meet its investment objective. \n

Sterling Capital North Carolina Intermediate Tax-Free ETF - For temporary defensive purposes, the Fund may increase its total holdings in tax-exempt obligations other than North Carolina Tax-Exempt Obligations to over 20% of its total assets. \n

Sterling Capital Virginia Intermediate Tax-Free ETF - For temporary defensive purposes, the Fund may increase its holdings in tax-exempt obligations other than Virginia Tax-Exempt Obligations to over 20% of its total assets.\n

All Funds\n

Active Trading - Each Fund may trade securities actively, which could increase its transaction costs (thereby lowering its performance) and may increase the amount of taxes that you pay. Frequent and active trading may cause adverse tax consequences for shareholders by increasing the amount of a Fund’s realized capital gains, which in turn may result in increased taxable distributions to shareholders, and by increasing the portion of the Fund’s realized capital gains that are short-term capital gains, which when distributed are generally taxable to shareholders that are individuals at ordinary income rates. \n

\n\n\n\n\n\n\n

Additional Investment Strategies and Risks

Fundamental Policies - Any of the policies identified above as fundamental may only be changed with respect to a particular Fund by a vote of a majority of the outstanding shares of that Fund (as defined in the Investment Company Act of 1940, as amended (the “1940 Act”). \n

Large Shareholder Redemptions - To the extent that a large number of shares of a Fund is held by a single shareholder (e.g., an institutional investor) or by a single intermediary on behalf of shareholders (e.g., a 401(k) plan), the Fund is subject to the risk that a redemption by that shareholder of all or a large portion of its Fund shares will require the Fund to sell securities at disadvantageous prices or otherwise disrupt the Fund’s operations. \n

Non-Fundamental Policies - Unless otherwise identified above as fundamental, the investment objectives of the Funds are non-fundamental and may be changed without shareholder approval. Also except as otherwise noted, the investment policies and restrictions described in this Prospectus are also non-fundamental, and may be changed without shareholder approval. \n

Investing Share Proceeds - On days during which there are net purchases of Fund shares, a Fund must invest the proceeds at prevailing market yields or hold cash. If a Fund holds cash, or if the yield of the securities purchases is less than that of the securities already in the portfolio, the Fund’s yield will likely decrease. Conversely, net purchases on days on which short term yields rise will cause a Fund’s yield to increase. The larger the amount that must be invested or the greater the difference between the yield of the securities purchased and the yield of the existing investments, the greater the impact will be on the yield of a Fund. In the event of significant changes in short term yields or significant net purchases, a Fund retains the discretion to close to new investments. However, a Fund is not required to close, and no assurance can be given that this will be done in any given circumstance.\n

Temporary Defensive Measures - A Fund may, from time to time, take temporary defensive positions that are inconsistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political, or other conditions. If deemed appropriate under the circumstances, each Fund may increase its holdings in short-term obligations to up to 100% of its total assets. A Fund may not achieve its investment objective as a result of any such temporary defensive position. Under normal market conditions, the Equity Funds will limit their investment in short-term obligations to 20% of each Fund’s total net assets. Such short-term obligations may include money market instruments and repurchase agreements.\n

Name Policies\n

To comply with SEC rules regarding the use of descriptive words in a fund’s name, the Funds have adopted policies of investing at least 80% of their net assets plus any borrowings made for investment purposes in specific types of investments or industries. Each Fund’s policy is described in its summary description under the heading “Principal Strategy.” A Fund will not change its name policy without providing its shareholders at least 60 days’ prior written notice. For purposes of the Funds’ 80% policies, the Funds will “look-through” investments in investment companies and will include such investments in their respective percentage totals. Compliance with an 80% policy is tested at the time of investment and periodically thereafter consistent with the requirements under applicable rules and regulations of the 1940 Act.\n

\n\n\n\n\n\n\n

Additional Investment Strategies and Risks

Investment Practices\n

The Funds invest in a variety of securities and employ a number of investment techniques. Each security and technique involves certain risks. The following table identifies the securities and techniques each Fund may use as a part of either its principal or non-principal strategy. Equity securities are subject mainly to market risk. Fixed-income securities are primarily influenced by market, credit and prepayment risks, although certain securities may be subject to additional risks. The following table identifies the securities and techniques each Fund may use as a part of either its principal or non-principal strategy. Following the table is a more complete discussion of risks associated with the securities and investment techniques described below. You may also consult the statement of additional information (“SAI”) for additional details regarding these and other permissible investments.\n

Sterling Capital Funds

Asset-
\nBacked Securities\n

Common Stock\n

Convertible Bonds\n

Delayed Delivery/ When-Issued\n

Debt
\nSecurities\n

Derivatives\n

Emerging Markets\n

Forward Foreign Currency Contracts\n

High-
\nYield/ High-Risk Debt Securities\n

Illiquid Securities\n

Investment Company Securities\n

Equity Funds

Large Cap Value Focused Factor ETF

Small Cap Value Focused Factor ETF

Small Cap Value ETF

Tax-Free Bond Funds

North Carolina Intermediate Tax-Free ETF

Virginia Intermediate Tax-Free ETF

\n\n\n\n\n\n\n

Additional Investment Strategies and Risks

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

Investment Grade Bonds\n

Money Market Instruments\n

Master Limited Partnerships\n

Mortgage-Backed Securities\n

Mortgage Dollar Rolls\n

Municipal Securities\n

Non-
\nU.S.
\nTraded Foreign Securities\n

Preferred Stocks\n

Real
\nEstate
\nInvestment Trusts (REITs)\n

Restricted Securities\n

Reverse Repurchase Agreements\n

Stock
\nPurchase Rights\n

Trust
\nPreferred Securities\n

U.S.
\nGovernment Agency Securities\n

U.S.
\nTraded Foreign Securities\n

U.S.
\nTreasury Obligations\n

Variable and Floating Rate Instruments\n

Warrants\n

Zero-
\nCoupon Debt Obligations\n

\n\n\n\n\n\n\n

Additional Investment Strategies and Risks

Additional Information about the Funds’ Investments\n

Principal Investments\n

The following information supplements information regarding some of the instruments in which a Fund may invest as a principal strategy, as described in the applicable Fund’s Principal Strategy.\n

Common Stock: Shares of ownership of a company.\n

Convertible Bonds: Bonds that convert to common stock.\n

Investment Company Securities: The Funds, each respectively, may invest up to 5% of its total assets in the shares of any one investment company, but may not own more than 3% of the total outstanding voting stock of any one investment company or invest more than 10% of its total assets in the securities of other investment companies in the aggregate (collectively, the “3-5-10 Limitations”), except as permitted under the 1940 Act or pursuant to SEC rules described further below. These investment companies may include shares of other investment companies for which the adviser to a Fund or any of its affiliates serves as investment adviser or underwriter. Notwithstanding the foregoing, each Fund may invest in shares of affiliated or unaffiliated money market funds without limit to the extent permitted by its investment strategy, provided that such investments are made in accordance with other provisions of the 1940 Act or applicable SEC rules. The SEC has adopted Rule 12d1-4 under the 1940 Act, which is designed to streamline and enhance the regulatory framework for fund of funds arrangements. In connection with the adoption of Rule 12d1-4, the SEC also rescinded Rule 12d1-2 under the 1940 Act and most fund of funds exemptive orders. Rule 12d1-4 permits each Fund to invest in the securities of other investment companies in excess of the 3-5-10 Limitations subject to certain conditions and to the extent permitted by its investment strategy.\n

Bear Funds: A fund intended to increase/decrease in value inversely to the stock or equity index to which it relates. Bear Funds may be more volatile than other types of funds and can be subject to market, leverage, compounding, tracking error, and liquidity risks.\n

Exchange-Traded Funds (“ETFs”): ETFs, such as Standard & Poor’s Depositary Receipts (“SPDRs”) and NASDAQ-100 Index Tracking Stock (“NASDAQ 100s”), represent ownership interest in long-term unit investment trusts, depositary receipts and other pooled investment vehicles that hold a portfolio of securities or that hold a portfolio of stocks designed to track the price, performance and dividend yield of an index, such as the S&P 500^® Index or the NASDAQ-100 Index, or a group of stocks in a particular geographic area. ETFs entitle a holder to receive proportionate cash distributions corresponding to the dividends that accrue to the stocks in the underlying portfolio, less trust expenses. With respect to ETFs that are registered investment companies, the Funds must comply with the 3-5-10 Limitations described above, except that the Funds may invest in certain ETFs in excess of the 3-5-10 Limitations in reliance on Rule 12d1-4 or another statutory or rule exemption, subject to certain conditions and to the extent permitted by its investment strategy.\n

Investment Grade Bonds: Interest-bearing or discounted securities that obligate the issuer to pay the bondholder a specified sum of money, usually at specific intervals, and to repay the principal amount of the loan at maturity. These bonds are rated BBB or better by S&P or Baa or better by Moody’s or similarly rated by other NRSROs, or, if not rated, determined to be of comparable quality by the Adviser.\n

\n\n\n\n\n\n\n

Additional Investment Strategies and Risks

Money Market Instruments: Investment grade, U.S.-dollar denominated debt securities that have remaining maturities of one year or less. These securities may include U.S. government obligations, domestic and foreign commercial paper (including variable amount master demand notes), repurchase agreements, certificates of deposit, bankers’ acceptances, demand and time deposits of domestic and foreign branches of U.S. banks and foreign banks, bank accounts and other financial institution obligations. Money market instruments may carry fixed or variable interest rates. These investments are limited to those obligations which, at the time of purchase, (i) possess one of the two highest short-term ratings from at least two NRSROs, or (ii) do not possess a rating (i.e., are unrated) but are determined by the Adviser to be of comparable quality.\n

Bankers’ Acceptances: Bills of exchange or time drafts drawn on and accepted by a commercial bank. Maturities are generally six months or less.\n

Certificates of Deposit: Negotiable instruments with a stated maturity.\n

Commercial Paper: Secured and unsecured short-term promissory notes issued by corporations and other entities. Maturities generally vary from a few days to nine months.\n

Repurchase Agreements: The purchase of a security and the simultaneous commitment to return the security to the seller at an agreed upon price on an agreed upon date.\n

Time Deposits: Non-negotiable receipts issued by a bank in exchange for the deposit of funds.\n

Variable Amount Master Demand Notes: Unsecured demand notes that permit the indebtedness to vary and provide for periodic adjustments in the interest rate according to the terms of the instrument. Because master demand notes are direct lending arrangements between a Fund and the issuer, they are not normally traded. Although there is no secondary market in these notes, a Fund may demand payment of principal and accrued interest at specified intervals.\n

Municipal Securities: Securities issued by a state or political subdivision to obtain funds for various public purposes. Municipal securities include industrial development bonds and other private activity bonds, as well as general obligation bonds, revenue bonds, tax anticipation notes, bond anticipation notes, revenue anticipation notes, project notes, other short-term tax-exempt obligations, municipal leases, obligations of municipal housing authorities (single family revenue bonds), obligations issued on behalf of Section 501(c)(3) organizations, and pre-refunded (or escrowed to maturity) bonds whose timely payment of principal and interest is ensured by an escrow of U.S. government obligations.\n

There are two general types of municipal bonds: General-obligations bonds, which are secured by the taxing power of the issuer and revenue bonds, which take many shapes and forms but are generally backed by revenue from a specific project or tax. These include, but are not limited to, certificates of participation (“COPs”); utility and sales tax revenues; tax increment or tax allocations; housing and special tax, including assessment district and community facilities district issues which are secured by specific real estate parcels; hospital revenue; and industrial development bonds that are secured by a private company.\n

Stand-by Commitments: Contract where a dealer agrees to purchase at a fund’s option a specified municipal obligation at its amortized cost value to a fund plus accrued interest. A Fund will acquire stand-by commitments solely to facilitate portfolio liquidity.\n

Real Estate Investment Trusts (“REITS”): Pooled investment vehicles investing primarily in income producing real estate or real estate loans or interest.\n

U.S. Treasury Obligations: Bills, notes, bonds, Ginnie Maes, separately traded registered interest and principal securities, and coupons under bank entry safekeeping.\n

Stripped Obligations: U.S. Treasury Obligations and their unmatured interest coupons that have been separated (“stripped”) by their holder, typically a custodian bank or other institution.\n

Variable and Floating Rate Instruments: Obligations with interest rates which are reset daily, weekly, quarterly or according to some other period and that may be payable to a Fund on demand.

Yankee Bonds, Notes, and Similar Debt Obligations: U.S.-dollar denominated bonds and notes issued by foreign corporations or governments.\n

Canada Bonds: Issued by Canadian provinces.\n

Sovereign Bonds: Issued by the government of a foreign country.\n

Supranational Bonds: Issued by supranational entities, such as the World Bank and European Investment Bank.

\n\n\n\n\n\n\n

Additional Investment Strategies and Risks

Non-Principal Investments\n

The Funds may, but will not necessarily, invest in any instruments listed below as a non-principal strategy, to the extent indicated on the Investment Practices table on pages 36 – 37 with respect to such Fund.\n

Asset-Backed Securities: Securities secured by company receivables, home equity loans, truck and auto loans, leases, credit card receivables and securities backed by other types of receivables or other assets.\n

Delayed Delivery Transactions/Forward Commitments/When-Issued: A purchase of, or contract to purchase, securities at a fixed price for delivery at a future date. Under normal market conditions, a Fund’s obligations under these commitments will not exceed 25% of its total assets.\n

Derivatives: Instruments whose value is derived from an underlying contract, index or security, or any combination thereof, including futures, options, (e.g., puts and calls), options on futures, swap agreements, including credit default swaps, some mortgage-backed securities and custody receipts.\n

Call and Put Options: A call option gives the buyer the right to buy, and obligates the seller of the option to sell, a security at a specified price. A put option gives the buyer the right to sell, and obligates the seller of the option to buy, a security at a specified price. The Funds will sell only covered call and secured put options.\n

Custody Receipts: Derivative products which, in the aggregate, evidence direct ownership in a pool of securities.\n

Futures and Related Options: A contract providing for the future sale and purchase of a specified amount of a specified security, class of securities, or an index at a specified time in the future and at a specified price.\n

Stock-Index Options: A security that combines features of options with securities trading using composite stock indices.\n

Structured Products: Individually negotiated agreements organized and operated to restructure the investment characteristics of an underlying security, involving the deposit with or purchase by an entity, such as a corporation or trust, of specified instruments (such as commercial bank loans) and the issuance by that entity of one or more classes of securities (“structured securities”) backed by, or representing interests in, the underlying instruments.\n

Swaps: An arrangement in which a Fund and another entity agree to exchange the returns (or differentials in rates of return) that would be earned or realized on underlying investments, instruments, rates or other reference obligations. In the case of credit default swaps, the arrangement gives one party (the “buyer”) the right to recoup the economic value of a decline in the value of debt securities of the reference issuer if a credit event (e.g., a downgrade or default) occurs. This value is obtained by delivering a debt security of the reference issuer in return for a previously agreed upon payment from the other party (the “seller”), frequently, the par value of the debt security.\n

Foreign Securities - Non-U.S. Traded: Stocks, bonds, and other obligations issued by foreign companies, foreign governments, and supranational entities that trade on non-U.S. exchanges.\n

Eurodollar Certificates of Deposit (“ECDs”): ECDs are U.S. dollar denominated certificates of deposit issued by branches of foreign and domestic banks located outside the U.S.\n

Eurodollar Time Deposits (“ETDs”): ETDs are U.S. dollar denominated deposits in a foreign branch of a U.S. bank or a foreign bank.\n

European Depositary Receipts (“EDRs”): EDRs are receipts issued in Europe, typically by foreign banks and trust companies, that evidence ownership of either foreign or domestic underlying securities.\n

Foreign Securities - U.S. Traded: Stocks, bonds, and other obligations issued by foreign companies, foreign governments, and supranational entities that trade in U.S. markets.\n

American Depositary Receipts (“ADRs”): ADRs are foreign shares of a company held by a U.S. bank that issues a receipt evidencing ownership.

Global Depositary Receipts (“GDRs”): GDRs are depositary receipts structured as global debt issues to facilitate trading on an international basis.\n

Forward Foreign Currency Contracts: An obligation to purchase or sell a specific amount of a currency at a fixed future date and price set at the time the contract is negotiated.\n

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High-Yield/High-Risk Debt Securities: High-yield/high-risk debt securities are securities that are rated below investment grade by the primary rating agencies (e.g., BB or lower by S&P and Ba or lower by Moody’s). These securities are considered speculative and involve greater risk of loss than investment grade debt securities. Other terms commonly used to describe such securities include “lower rated bonds,” “non-investment grade bonds” and “junk bonds.”\n

Illiquid Securities: Illiquid securities are those that a Fund reasonably expects cannot be sold or disposed of in current market conditions in seven days or less without the sale or disposition significantly changing the market value of the investment.\n

Master Limited Partnerships (“MLPs”): An MLP generally is a publicly traded company organized as a limited partnership or limited liability company and is generally treated as a partnership for U.S. federal income tax purposes. MLPs may derive income and gains from, among other things, the exploration, development, mining or production, processing, refining, transportation (including pipelines transporting gas, oil or products thereof), or the marketing of any mineral or natural resources. MLPs in which the Fund invests will generally be treated as qualified publicly traded partnerships for U.S. federal income tax purposes. If an MLP in which the Fund invests were treated as a partnership for U.S. federal income tax purposes, the Fund would be required to include in its taxable income its allocable share of the MLP’s income regardless of whether any distributions are made by the MLP. If the distributions received by the Fund are less than that Fund’s allocable share of the MLP’s income, the Fund may be required to sell other securities so that it may satisfy the requirements to qualify as a regulated investment company and avoid U.S. federal income and excise taxes. See “Additional Tax Information” below for more information.\n

Mortgage-Backed Securities: Debt obligations secured by real estate loans and pools of loans. These include collateralized mortgage obligations and real estate mortgage investment conduits.\n

Collateralized Mortgage Obligations: Mortgage-backed bonds that separate mortgage pools into different maturity classes.\n

Mortgage Dollar Rolls: Transactions in which a Fund sells securities and simultaneously contracts with the same counterparty to repurchase similar but not identical securities on a specified future date.\n

Preferred Stocks: Equity securities that generally pay dividends at a specified rate and have preference over common stock in the payment of dividends and liquidation. These securities generally do not carry voting rights.\n

Restricted Securities: Securities not registered under the Securities Act of 1933, as amended, such as privately placed commercial paper and Rule 144A securities.\n

Reverse Repurchase Agreements: The sale of a security and the simultaneous commitment to buy the security back at an agreed upon price on an agreed upon date. This is treated as a borrowing by a Fund.\n

Stock Purchase Rights. Instruments that entitle the holder to purchase a specific number of shares of common stock on a specific date or during a specific period of time.\n

Trust Preferred Securities: Securities possessing characteristics of both equity and debt issues.\n

U.S. Government Agency Securities: Securities issued by agencies and instrumentalities of the U.S. government. These include Fannie Mae and Freddie Mac.\n

Warrants: Securities, typically issued with preferred stock or bonds, which give the holder the right to buy a proportionate amount of common stock at a specified price.\n

Zero-Coupon Debt Obligations: Bonds and other debt that pay no interest, but are issued at a discount from their value at maturity. When held to maturity, their entire return equals the difference between their issue price and their maturity value.\n

Differences Between Investing in an ETF and a Mutual Fund\n

Shareholders of the Funds should be aware of certain differences between investing in an ETF, like the Funds, and a mutual fund.\n

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Redeemability. Mutual fund shares may be bought from, and redeemed with, the issuing fund for cash at NAV typically calculated once at the end of each business day. Shares of the Funds, by contrast, cannot be purchased from or redeemed with the Funds except by or through Authorized Participants and then typically for an in-kind basket of securities. In contrast, investors who are not Authorized Participants purchase and sell shares generally for cash on a secondary market at the prevailing market price. In addition, the Funds issue and redeem shares on a continuous basis only in large blocks of shares called Creation Units.\n

Exchange Listings. Unlike mutual funds, the Funds’ shares are listed on an exchange and traded in the secondary market in the same manner as other equity securities and ETFs. Investors can purchase and sell individual shares of the Funds only on the secondary market through a broker-dealer. The Funds’ shares may be less actively traded in certain markets than others, and investors are subject to the execution and settlement risks and market standards of the market where they or their broker-dealers direct their trades for execution. Certain information available to investors who trade Fund shares on a U.S. stock exchange during regular U.S. market hours may not be available to investors who trade in other markets, which may result in secondary market prices in such markets being less efficient. Secondary market transactions do not occur at NAV, but at market prices that change throughout the day, based on the supply of, and demand for, shares of the Funds.\n

In-Kind and Cash Redemptions. Unlike shares of many mutual funds that are only bought and sold at closing NAVs, the shares of a Fund can be created and redeemed in kind in Creation Units at each day’s market close at the Fund’s NAV and tradable in a secondary market on an intraday basis at prevailing market prices.\n

Investment Risks\n

Below is a more complete discussion of the types of risks inherent in the securities and investment techniques listed above as well as those risks discussed in “Strategy, Risks and Performance” section in each Fund’s summary section. Because of these risks, the value of the securities held by the Funds may fluctuate, as will the value of your investment in the Funds. Certain investments and Funds are more susceptible to these risks than others. A Fund is exposed to these risks directly through securities and other investments held directly by the Fund or indirectly through underlying investment companies and ETFs in which a Fund may invest.\n

Principal Risks\n

The following includes additional detail regarding principal risks for one or more Sterling Capital Funds.\n

Active Trading Risk. The Fund may trade securities actively, which could increase its transaction costs (thereby lowering its performance) and may increase the amount of taxes that a shareholder pays, by increasing the amount of the Fund’s realized capital gains and increasing the portion of the Fund’s realized capital gains that are short-term capital gains.\n

Company-Specific Risk. The possibility that a particular stock may lose value due to factors specific to the company itself, including deterioration of its fundamental characteristics, an occurrence of adverse events at the company, or a downturn in its business prospects.\n

Convertible Securities Risk. Convertible securities are securities that may be converted or exchanged into shares of an underlying stock or other asset at a stated exchange ratio or predetermined price. The market value of convertible securities tends to decline as interest rates increase and may be affected by changes in the price of the underlying security. Convertible securities are frequently issued with a call feature that allows the issuer to choose when to redeem the security, which could result in a Fund being forced to redeem, convert, or sell the security under circumstances unfavorable to the Fund.\n

Counterparty Risk. The possibility that a counterparty to a contract will default or otherwise become unable to honor a financial obligation. This could cause a Fund to lose the benefit of a transaction or prevent a Fund from selling or buying other securities to implement its investment strategies.\n

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Credit Risk. The risk that the issuer of a security, or the counterparty to a contract, will default or otherwise become unable to honor a financial obligation. Credit risk is generally higher for non-investment grade securities. The price of a security can be adversely affected prior to actual default as its credit status deteriorates and the probability of default rises. In addition, the securities in which a Fund invests may be subject to credit enhancement (for example, guarantees, letters of credit or bond insurance). If the credit quality of the credit enhancement provider (for example, a bank or bond insurer) is downgraded, the rating on a security credit enhanced by such credit enhancement provider also may be downgraded. Having multiple securities credit-enhanced by the same enhancement provider will increase the adverse effects on a Fund that are likely to result from a downgrading of, or a default by, such an enhancement provider. Adverse developments in the banking or bond insurance industries also may negatively affect a Fund.\n

Estimated Maturity Risk. The possibility that an underlying mortgage holder will exercise its right to pay principal on an obligation earlier or later than expected. This may happen when there is a rise or fall in interest rates. These events may shorten or lengthen the duration (i.e., interest rate sensitivity) and potentially reduce the value of these securities.\n

ETF Risk. The risks associated with the risks of owning the underlying securities the ETF is designed to track. Lack of liquidity in an ETF could result in the ETF being more volatile than the underlying portfolio of securities. In addition, shares of ETFs may trade at a premium or discount to net asset value and are subject to secondary market trading risks. Secondary markets may be subject to irregular trading activity, wide bid/ask spreads, and extended trade settlement periods in times of market stress because market makers and authorized participants may step away from making a market in an ETF’s shares, which could cause a material decline in the ETF’s net asset value. When a Fund invests in an ETF, in addition to directly bearing expenses associated with its own operations, the Fund will bear a pro rata portion of the ETF’s expenses. As a result, it may be more costly to own an ETF than owning the underlying portfolio of securities directly.\n

ETF Structure Risks. The Funds are structured as ETFs and are subject to risks related to exchange trading, including:\n

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Authorized Participant Concentration Risk. Prior to trading in the secondary market, shares of the Funds are “created” at their NAV pursuant to an agreement between Authorized Participants and the Distributor (as defined below). A creation transaction, which is subject to acceptance by the Distributor and a Fund, generally takes place when an Authorized Participant deposits into the Fund a designated portfolio of securities, assets or other positions (a “creation basket”), and an amount of cash (including any cash representing the value of any substituted securities, assets or other positions), if any, that together approximate the holdings of the Fund in exchange for Creation Units. Similarly, shares can be redeemed only in Creation Units, generally for a designated portfolio of securities, assets or other positions (a “redemption basket”) held by a Fund and an amount of cash (including any portion of such securities for which cash may be substituted). Only an Authorized Participant may engage in creation or redemption transactions directly with the Funds. Each Fund has a limited number of institutions that may act as Authorized Participants, none of which are or will be obligated to engage in creation or redemption transactions. To the extent that these institutions exit the business or are unable or unwilling to proceed with creation and/or redemption orders with respect to a Fund and no other Authorized Participant is able or willing to step forward to create or redeem Creation Units, the Fund’s shares may trade at a greater premium or discount between the market price and the NAV of the Fund’s shares and/or wider bid/ask spreads than those experienced by other ETFs. Additionally, a Fund could possibly face trading halts and/or delisting from the Exchange. This risk is heightened in times of market stress, including at both the Fund share level and at the Fund holdings level.\n

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Market Trading Risks.\n

Absence of Active Market. Although shares of the Funds are listed for trading on the Exchange, there can be no assurance that an active trading market for such shares or a Fund’s underlying portfolio securities will develop or be maintained by market makers or Authorized Participants.\n

Secondary Market Trading Risk. Shares of the Funds may trade in the secondary market at times when the Funds do not accept orders to purchase or redeem shares. At such times, shares may trade in the secondary market with more significant premiums or discounts than might be experienced at times when the Funds accept purchase and redemption orders. Secondary market trading in Fund shares may be halted by the Exchange because of market conditions or for other reasons.\n

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Additional Investment Strategies and Risks

Shares of the Funds, similar to shares of other issuers listed on a stock exchange, may be sold short and are therefore subject to the risk of increased volatility and price decreases associated with being sold short. Fund shares may be loaned, borrowed, pledged or purchased on margin, and certain ETFs have options associated with them. The use of Fund shares in these ways may result in increased volatility and larger premiums and discounts on Fund shares. In addition, trading activity in derivative products based on a Fund may lead to increased trading volume and volatility in the secondary market for the shares of the Fund.\n

Shares of the Fund May Trade at Prices Other Than NAV. Shares of the Funds trade on the Exchange at prices at, above or below the Funds’ most recent NAVs. The NAV of each Fund is calculated at the end of each business day and fluctuates with changes in the market value of the Fund’s holdings. The trading price of a Fund’s shares fluctuates continuously throughout trading hours based on both market supply of and demand for Fund shares and the underlying value of a Fund’s portfolio holdings or NAV. As a result, the trading prices of a Fund’s shares may deviate significantly from NAV during periods of market volatility, including during periods of significant redemption requests or other unusual market conditions. Any of these factors, among others, may lead to the Funds’ shares trading at a premium or discount to NAV. However, because shares can be created and redeemed in Creation Units at NAV, the Adviser believes that large discounts or premiums to the NAV of a Fund are not likely to be sustained over the long term (unlike shares of many closed-end funds, which frequently trade at appreciable discounts from, and sometimes at premiums to, their NAVs). While the creation/redemption feature is designed to make it more likely that a Fund’s shares normally will trade on the Exchange at prices close to the Fund’s next calculated NAV, exchange prices are not expected to correlate exactly with a Fund’s NAV due to timing reasons, supply and demand imbalances and other factors. In addition, disruptions to creations and redemptions, including disruptions at market makers, Authorized Participants, or other market participants, and during periods of significant market volatility, may result in trading prices for shares of a Fund that differ significantly from its NAV. Authorized Participants may be less willing to create or redeem Fund shares if there is a lack of an active market for such shares or its underlying investments, which may contribute to a Fund’s shares trading at a premium or discount to NAV.\n

Costs of Buying or Selling Fund Shares. Buying or selling Fund shares on the Exchange involves two types of costs that apply to all securities transactions. When buying or selling shares of a Fund through a broker, you will likely incur a brokerage commission and other charges. In addition, you may incur the cost of the “bid-ask spread”; that is, the difference between what investors are willing to pay for Fund shares (the “bid” price) and the price at which they are willing to sell Fund shares (the “ask” price). The bid-ask spread, which varies over time for shares of a Fund based on trading volume and market liquidity, is generally narrower if the Fund has more trading volume and market liquidity and wider if the Fund has less trading volume and market liquidity. In addition, increased market volatility may cause wider bid-ask spreads. There may also be regulatory and other charges that are incurred as a result of trading activity. Because of the costs inherent in buying or selling Fund shares, frequent trading may detract significantly from investment results and an investment in Fund shares may not be advisable for investors who anticipate regularly making small investments through a brokerage account.\n

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Fund Shares Liquidity Risk. Although each Fund’s shares are listed on the Exchange, here can be no assurance that an active, liquid or otherwise orderly trading market for shares will be established or maintained by market makers or Authorized Participants, particularly in times of stressed market conditions. There is no guarantee that a Fund will be able to attract market makers and Authorized Participants. There is no obligation for market makers to make a market in a Fund’s shares or for Authorized Participants to submit purchase or redemption orders for Creation Units. Accordingly, if such parties do not to perform their functions, this could, such as during times of market stress, in turn, lead to variances between the market price of a Fund’s shares and the underlying value of those shares and bid/ask spreads could widen. Trading in a Fund’s shares on the Exchange also may be disrupted or even halted due to market conditions or for reasons that, in the view of the Exchange, make trading in a Fund’s shares inadvisable. In addition, trading in a Fund’s shares on the Exchange may be subject to trading halts caused by extraordinary market volatility pursuant to the Exchange “circuit breaker” rules. There also can be no assurance that the requirements of the Exchange necessary to maintain the listing of a Fund’s shares will continue to be met or will remain unchanged. In stressed market conditions, the market for the Fund’s shares may become less liquid in response to deteriorating liquidity for the Fund’s underlying portfolio holdings. This may lead to wider bid-ask spreads and the Fund trading above or below NAV.\n

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Redemption Risk. Authorized Participants may from time to time own a substantial amount of Fund shares. These Authorized Participants may also pledge or loan Fund shares (to secure financing or otherwise), which may result in the shares becoming concentrated in another party. There can be no assurance that any large Authorized Participant or large group of Authorized Participants would not redeem their investment or that the size of a Fund would be maintained. Redemptions of a large number of Fund shares by Authorized Participants may adversely affect a Fund’s liquidity and net assets. To the extent a Fund permits redemptions in cash, these redemptions may force the Fund to sell portfolio securities when it might not otherwise do so, which may negatively impact the Fund’s NAV, have a material effect on the market price of the shares and increase the Fund’s brokerage costs and/or accelerate the realization of taxable income and/or gains and cause the Fund to make taxable distributions to its investors earlier than the Fund otherwise would have. A Fund also may be required to sell its more liquid Fund investments to meet a large redemption, in which case the Fund’s remaining assets may be less liquid, more volatile, and more difficult to price. To the extent these large Authorized Participants transact in shares on the secondary market, such transactions may account for a large percentage of the trading volume for the shares of a Fund and may, therefore, have a material upward or downward effect on the market price of the shares.\n

Fixed Income Market Risk. Fixed income securities markets may, in response to governmental intervention, economic or market developments (including potentially a reduction in the number of broker-dealers willing to engage in market-making activity), or other factors, experience periods of increased volatility and reduced liquidity. During those periods, a Fund may experience increased levels of shareholder redemptions, and may have to sell securities at times when it would otherwise not do so, and at unfavorable prices. Fixed income securities may be difficult to value during such periods.\n

Focused Investment Risk. Funds with investments that are focused in particular asset classes, countries, regions, sectors, industries or issuers that are subject to the same or similar risk factors and funds with investments whose prices are closely correlated are subject to greater overall risk than funds with investments that are more diversified or whose prices are not as closely correlated.\n

A Fund that invests in the securities of a small number of issuers has greater exposure to adverse developments affecting those issuers and to a decline in the market price of particular securities than Funds investing in the securities of a larger number of issuers. Securities, sectors, or companies that share common characteristics are often subject to similar business risks and regulatory burdens, and often react similarly to specific economic, market, political or other developments.\n

Income Risk. The possibility that a Fund’s income from fixed-income securities - and thus its total return - will decline due to falling interest rates. Income risk is generally higher for shorter-term bonds and lower for longer term bonds, because in an environment of falling interest rates as bonds mature a Fund may be forced to invest in lower-yielding securities.\n

Interest Rate Risk. The risk that debt prices overall will decline over short or even long periods due to rising interest rates. A rise in interest rates typically causes a fall in values, while a fall in rates typically causes a rise in values. Interest rate risk should be modest for shorter-term securities, moderate for intermediate-term securities, and higher for longer-term securities. However, interest rate changes can be sudden and unpredictable, and a Fund may lose money as a result of movements in interest rates. A Fund may not be able to hedge against changes in interest rates or may choose not to do so for cost or other reasons. In addition, any hedges may not work as intended. Generally, an increase in the average maturity of a Fund will make it more sensitive to interest rate risk. The market prices of securities structured as zero coupon or pay-in-kind securities are generally affected to a greater extent by interest rate changes. These securities tend to be more volatile than securities which pay interest periodically. Some of the Funds’ debt instruments may be valued, in part, by reference to the relative relationship between interest rates on tax-exempt securities and taxable securities, respectively. When the market for tax-exempt securities underperforms (or outperforms) the market for taxable securities, the value of these investments may be negatively affected (or positively affected). Certain factors, such as the presence of call features, also may cause a particular security invested in by the Funds, or a Fund as a whole, to exhibit less sensitivity to changes in interest rates. A wide variety of factors can cause interest rates to rise (e.g., central bank monetary policies, inflation rates, general economic conditions, etc.). In recent years, the U.S. Federal Reserve and other central banks have raised interest rates in an effort to combat high levels of inflation. These central banks may continue to increase interest rates or, alternatively, decrease them as inflationary and market conditions change. High levels of inflation and/or a significantly changing interest rate environment can lead to heightened levels of volatility and reduced liquidity.\n

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Investment Company Risk. Investing in another investment company or pooled vehicle, including ETFs and business development companies, subjects a Fund to that company’s risks, including the risk that the investment company or pooled vehicle will not perform as expected. As a shareholder in an investment company or pooled vehicle, a Fund, and indirectly the Fund’s shareholders, would bear its ratable share of the investment company’s or pooled vehicle’s expenses, including advisory and administrative fees, and the Fund would at the same time continue to pay its own fees and expenses. Investments in other investment companies may be subject to investment or redemption limitations or special charges, such as redemption fees. To the extent a Fund invests in other investment companies, it is exposed to the risk that the other investment companies or pooled vehicles do not perform as expected.\n

The Adviser may have an economic incentive to invest a portion of a Fund’s assets in investment companies sponsored or managed by the Adviser or its affiliates in lieu of investments by such Fund directly in portfolio securities, or may choose to invest in such investment companies over investment companies sponsored or managed by others. Similarly, the Adviser may delay or decide against the sale of interests held by a Fund in investment companies sponsored or managed by the Adviser or its affiliates, where it might do otherwise if the Fund were invested in investment companies managed or sponsored by others.\n

Investment Style Risk. The risk that returns from a particular class or group of stocks (e.g., value, growth, momentum, small cap, mid cap, large cap, real estate) will trail returns from other asset classes or the overall stock market. Groups or asset classes of stocks tend to go through cycles of doing better - or worse - than common stocks in general. These periods can last for as long as several years. Additionally, a particular asset class or group of stocks could fall out of favor with the market, causing a Fund to underperform funds that focus on other types of stocks.\n

Management Risk. The risk that an investment technique used by a Fund’s portfolio manager may fail to produce the intended result. This includes the risk that the portfolio manager’s assessment of an investment (including a security’s fundamental fair (or intrinsic) value) is wrong. Management risk also includes the risk that changes in the value of a hedging instrument will not match those of the asset being hedged. Incomplete matching can result in unanticipated risks.\n

Market Risk. The risk that the market value of a security may move up and down, sometimes rapidly and unpredictably for a variety of reasons, including general financial market conditions, changing market perceptions and changes in government intervention in the financial markets. 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, industrial sector of the economy or the market as a whole. For fixed income securities, market risk is largely, but not exclusively, influenced by changes in interest rates. Equity securities generally have greater price volatility than fixed income securities, although under certain market conditions fixed income securities may have comparable or greater price volatility. A rise in interest rates typically causes a fall in values, while a fall in rates typically causes a rise in values. Finally, key information about a security or market may be inaccurate or unavailable. This is particularly relevant to investments in foreign and emerging market securities. In addition, a Fund may be subject to inverse market risk, the particular type of market risk associated with investments that are intended to perform when equity markets decline. These investments will lose value when the equity markets to which they are tied are increasing in value. A Fund also may purchase equity securities that typically trade at higher multiples of current earnings than other securities, and the market prices of these equity securities often are more sensitive to changes in future earnings expectations than the market prices of equity securities trading at lower multiples. Some sectors of the economy and individual issuers have experienced or may experience particularly large losses. Periods of extreme volatility in the financial markets, reduced liquidity of many instruments, increased government debt, inflation, and disruptions to supply chains, consumer demand and employee availability, may continue for some time. Raising the ceiling on U.S. government debt has become increasingly politicized. Any failure to increase the total amount that the U.S. government is authorized to borrow could lead to a default on U.S. government obligations, with unpredictable consequences for economies and markets in the U.S. and elsewhere. Recently, inflation has increased and may rise further. The COVID-19 pandemic resulted in significant market volatility, exchange suspensions and closures, declines in global financial markets, higher default rates, supply chain disruptions, and a substantial economic downturn in economies throughout the world. The impact of this coronavirus, and other epidemics and pandemics that may arise in the future, could affect economies, companies and the market in general in ways that cannot necessarily be foreseen at the present time. Changes in interest rates and inflation, political or social developments, including military conflict (such as Russia’s military invasion of Ukraine, conflicts in the Middle East and Asia, and tension between nations such as China and Taiwan), and geopolitical developments (including trading and tariff arrangements, sanctions, and

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Additional Investment Strategies and Risks

cybersecurity attacks) have occurred and can continue to occur in the future. These events and circumstances could adversely affect the value and liquidity of the Funds’ investments, impair the Funds’ ability to satisfy redemption requests, and negatively impact the Funds’ performance.\n

Mid Capitalization Company Risk. Investments in middle capitalization companies may be riskier, more volatile and more vulnerable to economic, market and industry changes than investments in larger, more established companies. As a result, share price changes may be more sudden or erratic than the prices of other equity securities, especially over the short term.\n

Municipal Securities Risk. Municipal obligations are issued by or on behalf of states, territories and possessions of the United States and their political subdivisions, agencies and instrumentalities and the District of Columbia to obtain funds for various public purposes. Municipal obligations are subject to more credit risk than U.S. government securities that are supported by the full faith and credit of the United States. The ability of municipalities to meet their obligations will depend on the availability of tax and other revenues, economic, political and other conditions within the state and municipality, and the underlying fiscal condition of the state and municipality. As with other fixed income securities, municipal securities also expose their holders to market risk because their values typically change as interest rates fluctuate.\n

Non-Diversified Risk (Tax-Free Bond Funds). Because the Funds are non-diversified, each Fund may invest a greater percentage of its assets in a particular issuer compared with other funds. Accordingly, the Fund’s portfolio may be more sensitive to changes in the market value of a single issuer or industry.\n

Operational and Technology Risk. The Funds are subject to a risk of loss resulting from services provided by service providers, including pricing, administrative, accounting, tax, legal, custody, transfer agency, and other services. Operational risk includes the possibility of loss caused by inadequate procedures and controls, human error, and system failures by a service provider. For example, trading delays or errors could prevent a Fund from benefiting from potential investment gains or avoiding losses. In addition, a service provider may be unable to provide a net asset value (“NAV”) for a Fund or share class on a timely basis.\n

In addition, the Funds, their service providers, and other market participants increasingly depend on complex information technology and communications systems to conduct business functions. These systems are subject to a number of different threats or risks that could adversely affect a Fund and its shareholders, despite the efforts of the Fund and its service providers to adopt technologies, processes, and practices intended to mitigate these risks. Any problems relating to the performance and effectiveness of security procedures used by a Fund or its service providers to protect a Fund’s assets, such as algorithms, codes, passwords, multiple signature systems, encryption and telephone call-backs, may have an adverse impact on an investment in a Fund.\n

For example, unauthorized third parties may attempt to improperly access, modify, disrupt the operations of, or prevent access to these systems or data within them (a “cyber-attack”), whether systems of a Fund, the Fund’s service providers, counterparties, or other market participants. Power or communications outages, acts of god, information technology equipment malfunctions, operational errors, and inaccuracies within software or data processing systems may also disrupt business operations or impact critical data. Market events also may occur at a pace that overloads current information technology and communication systems and processes of a Fund, the Fund’s service providers, or other market participants, impacting the ability to conduct the Fund’s operations.\n

Cyber-attacks, disruptions, or failures that affect a Fund’s service providers or counterparties may adversely affect the Fund and its shareholders, including by causing losses for the Fund or impairing Fund operations. For example, a Fund’s or its service providers’ assets or sensitive or confidential information may be misappropriated, data may be corrupted, and operations may be disrupted (e.g., cyber-attacks or operational failures may cause the release of private shareholder information or confidential Fund information, interfere with the processing of shareholder transactions, impact the ability to calculate the Fund’s NAV, and impede trading). In addition, cyber-attacks, disruptions, or failures may cause reputational damage and subject a Fund or its service providers to regulatory fines, litigation costs, penalties or financial losses, reimbursement or other compensation costs, and/or additional compliance costs. The Funds also may incur substantial costs for cybersecurity risk management in order to guard against any cyber attacks in the future. In addition, the adoption of work-from-home arrangements by the Funds, Sterling Capital or their service providers could increase all of the above risks, create additional data and information accessibility concerns, and make the Funds, Sterling Capital or their service providers more susceptible to operational disruptions, any of which could adversely impact their operations. While a Fund and its service providers may establish business continuity and other plans and processes to address the possibility of

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Additional Investment Strategies and Risks

cyber-attacks, disruptions, or failures, there are inherent limitations in such plans and systems, including that they do not apply to third parties, such as other market participants, as well as the possibility that certain risks have not been identified or that unknown threats may emerge in the future.\n

Similar types of operational and technology risks are also present for issuers of securities or other instruments in which a Fund invests, which could result in material adverse consequences for such issuers, and may cause the Fund’s investments to lose value. In addition, cyber-attacks involving a Fund counterparty could affect such counterparty’s ability to meet its obligations to the Fund, which may result in losses to the Fund and its shareholders. Furthermore, as a result of cyber-attacks, disruptions, or failures, an exchange or market may close or issue trading halts on specific securities or the entire market, which may result in a Fund being, among other things, unable to buy or sell certain securities or financial instruments or unable to accurately price its investments. A Fund cannot directly control any cybersecurity plans and systems put in place by its service providers, Fund counterparties, issuers in which the Fund invests, or securities markets and exchanges. Third parties may also attempt to fraudulently induce employees, customers, third party service providers or other users of the Insurance Companies’ or the Portfolio’s services providers’ respective systems to disclose sensitive information in order to gain access to data and may request ransom payments in exchange for not disclosing client or customer information or restoring access to digital infrastructure or other infrastructure assets. The U.S. federal government has issued public warnings that indicate that infrastructure assets might be specific targets of “cyber sabotage” events, which illustrates the particularly heightened risk for the Insurance Companies, the Portfolio’s service providers and the Portfolio from such events.\n

Prepayment/Call Risk. The risk that the principal repayment of a security will occur at an unexpected time. Prepayment risk is the chance that the repayment of a mortgage will occur sooner than expected. Call risk is the possibility that, during times of declining interest rates, a bond issuer will “call” - - or repay - - higher yielding bonds before their stated maturity. Changes in pre-payment rates can result in greater price and yield volatility. Pre-payments and calls generally accelerate when interest rates decline. When mortgage and other obligations are pre-paid or called, a Fund may have to reinvest in securities with a lower yield. In this event, the Fund would experience a decline in income - - and the potential for taxable capital gains. Further, with early prepayment, a Fund may fail to recover any premium paid, resulting in an unexpected capital loss. Prepayment/call risk is generally low for securities with a short-term maturity, moderate for securities with an intermediate-term maturity, and high for securities with a long-term maturity.\n

Real Estate-Related Investment and REIT Risk. Real estate-related investments may decline in value as a result of factors affecting the real estate industry. Risks associated with investments in securities of companies in the real estate industry include: decline in the value of real estate; risks related to general and local economic conditions, overbuilding and increased competition; increases in property taxes and operating expenses; changes in zoning laws; casualty or condemnation losses; variations in rental income; changes in neighborhood values; the appeal of properties to tenants; and increases in interest rates. In addition, equity REITs may be affected by changes in the values of the underlying property owned by the trusts. REITs are dependent upon management skills, may not be diversified and are subject to the risks of financing projects. Such REITs are also subject to heavy cash flow dependency, defaults by borrowers, self liquidation and the risk of failing to qualify for the favorable tax treatment granted to REITs under the Internal Revenue Code, and/or to maintain exempt status under the 1940 Act. A Fund will indirectly bear its proportionate share of expenses, including management fees, paid by each REIT in which the Fund invests.\n

Small Capitalization Company Risk. Stocks of small-capitalization companies are more risky than stocks of larger companies and may be more vulnerable than larger companies to adverse business or economic developments. Many of these companies are young and have a limited track record. Small cap companies may also have limited product lines, markets, or financial resources. Securities of such companies may be less liquid and more volatile than securities of larger companies or the market averages in general and, therefore, may involve greater risk than investing in larger companies. In addition, small cap companies may not be well-known to the investing public, may not have institutional ownership, and may have only cyclical, static, or moderate growth prospects. If a Fund concentrates on small-capitalization companies, its performance may be more volatile than that of a fund that invests primarily in larger companies.\n

State-Specific Risk. (North Carolina Intermediate Tax-Free ETF) By concentrating its investments in securities issued by North Carolina and its political subdivisions, the Fund may be more vulnerable to unfavorable developments in North Carolina (e.g., adverse changes in North Carolina economic conditions, government policies or tax revenues and expenditures) than funds that are more geographically diversified.\n

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Additional Investment Strategies and Risks

(Virginia Intermediate Tax-Free ETF) By concentrating its investments in securities issued by Virginia and its political subdivisions, the Fund may be more vulnerable to unfavorable developments in Virginia (e.g., adverse changes in Virginia economic conditions, government policies or tax revenues and expenditures) than funds that are more geographically diversified.\n

Tax Risk (Tax-Free Bond Funds). While distributions by the Tax-Free Bond Funds of interest income from municipal securities will generally be exempt from federal income tax (although a portion of such distributions may be subject to the federal alternative minimum tax), distributions of any capital gains realized on such securities, and distributions of income or gains realized with respect to other fund investments (including derivatives), may be subject to applicable federal, state, and local income tax. Failure by an issuer of municipal securities to comply with certain requirements of the Internal Revenue Code could result in taxation of the interest income from such securities or other adverse tax consequences to shareholders. In addition, the tax treatment of municipal or other securities could be changed by legislative or judicial action, thereby affecting the value of those securities.\n

Variable and Floating Rate Instrument Risk. Variable and floating rate instruments are generally less sensitive to interest rate changes than other fixed rate instruments; however, the value of floating rate instruments may decline if their interest rates do not rise as quickly, or as much, as general interest rates. Inverse floating rate securities may also exhibit greater price volatility than a fixed rate obligation with similar credit quality. When a Fund holds variable or floating rate securities, a decrease (or, in the case of inverse floating rate securities, an increase) in market interest rates will adversely affect the income received from such securities and the net asset value of the Fund’s shares.\n

Non-Principal Risks\n

The following are non-principal risks for one or more Sterling Capital Funds.\n

Derivatives Risk. The possibility that a Fund will suffer a loss from its use of derivatives. There is no guarantee that the use of derivatives will be effective or that suitable transactions will be available. The primary risk with many derivatives is that they can amplify a gain or loss, potentially earning or losing substantially more money than the actual cost of the derivative instrument. Even a small investment in derivatives can have a significant impact on a Fund’s exposure to securities markets values, interest rates or currency exchange rates. It is possible that a Fund’s liquid assets may be insufficient to support its obligations under its derivatives positions. Use of derivatives for non-hedging purposes is considered a speculative practice and involves greater risks than are involved in hedging. A Fund’s use of derivatives such as futures transactions and swap transactions involves other risks, such as the credit risk relating to the other party to a derivative contract (which is heightened for over-the-counter swaps and other derivatives as compared to centrally cleared derivatives), the risk of difficulties in pricing and valuation, and the risk that changes in the value of a derivative may not correlate perfectly with relevant assets, rates or indices. There is also the risk that a Fund may be unable to terminate or sell a derivatives position at an advantageous time or price.\n

Foreign Currency Transaction Risk. Funds that invest directly in foreign currencies and in securities that trade in, or receive revenues in, foreign currencies are subject to the risk that those currencies will fluctuate in value relative to the U.S. dollar. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the U.S. or abroad.\n

Foreign Investment Risk. Risks relating to investments in foreign securities include higher transaction costs, delayed settlements, currency controls, adverse economic developments and possible foreign controls on investment. Foreign investment risk also includes the risk that fluctuations in the exchange rates between the U.S. dollar and foreign currencies may negatively affect an investment. Adverse changes in exchange rates may erode or reverse any gains produced by foreign currency-denominated investments and may widen any losses. Exchange rate volatility also may affect the ability of an issuer to repay U.S. dollar-denominated debt, thereby increasing credit risk. Foreign securities may also be affected by incomplete or inaccurate financial information on companies as well as changes in the political or social conditions and taxation, including confiscatory or withholding taxes, diplomatic relations, embargoes, economic sanctions against a particular country or countries, organizations, entities and/or individuals, expropriation, nationalization, limitation on the removal of funds or assets, or the establishment of exchange controls or other restrictions and tax regulations in foreign countries. These risks are more significant in emerging markets.\n

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Additional Investment Strategies and Risks

High-Yield/High-Risk Debt Securities. High-yield/high-risk debt securities are securities that are rated below investment grade by the primary rating agencies (e.g., BB or lower by S&P and Ba or lower by Moody’s). These securities are considered speculative and involve greater risk of loss than investment grade debt securities. Other terms commonly used to describe such securities include “lower rated bonds,” “non-investment grade bonds” and “junk bonds.”\n

Legal and Regulatory Risk. Legal, tax, and regulatory changes could occur during the term of a Fund that may adversely affect the Fund. New (or revised) laws or regulations or interpretations of existing law may be issued by the IRS or Treasury Department, the Commodity Futures Trading Commission, the SEC, the U.S. Federal Reserve or other banking regulators, or other governmental regulatory authorities, or self-regulatory organizations that supervise the financial markets that could adversely affect the Funds.\n

Mortgage-Backed and Asset-Backed Securities Risk. Some Funds may invest in mortgage-backed securities, which may involve exposure to so-called “sub-prime” mortgages that are subject to certain other risks including prepayment and call risks, which are described below. Mortgage-backed and other asset-backed securities often involve risks that are different from or more acute than risks associated with other types of debt instruments. For instance, these securities may be particularly sensitive to changes in prevailing interest rates. Rising interest rates tend to extend the duration of mortgage-backed securities, making them more sensitive to changes in interest rates, and may reduce the market value of the securities. This is known as extension risk. Mortgage-backed securities are also subject to pre-payment risk. Due to their often complicated structures, various mortgage-backed and asset-backed securities may be difficult to value and may constitute illiquid securities. The value of mortgage-backed and asset-backed securities may be substantially dependent on the servicing of the underlying asset pools, and are therefore subject to risks associated with negligence by, or defalcation of, their servicers. During periods of deteriorating economic conditions, such as recessions or periods of rising unemployment, delinquencies and losses generally increase, sometimes dramatically, with respect to securitizations involving loans, sales contracts, receivables and other obligations underlying asset-backed securities. Furthermore, debtors may be entitled to the protection of a number of state and federal consumer protection credit laws with respect to these securities, which may give the debtor the right to avoid or reduce payment.\n

Preferred Stock Risk. Preferred stock represents an interest in a company that generally entitles the holder to receive, in preference to the holders of common stock, dividends and a fixed share of the proceeds resulting from a liquidation of the company. Preferred stocks do not offer as great a degree of protection of capital or assurance of continued income as investments in corporate debt securities. Preferred stocks are generally subordinated in right of payment to all debt obligations and creditors of the issuer, and convertible preferred stocks may be subordinated to other preferred stock of the same issuer.\n

Sector Risk. The risk that a Fund comprised of companies with similar characteristics will be more susceptible to any economic, business, political, or other developments that generally affect these entities. Developments affecting companies with similar characteristics might include changes in interest rates, changes in the economic cycle affecting credit losses and regulatory changes.\n

U.S. Government Securities Risk. The risk associated with securities issued by agencies of the U.S. government such as Fannie Mae or Freddie Mac. Although U.S. government securities issued directly by the U.S. government are guaranteed by the U.S. Treasury, other U.S. government securities issued by an agency or instrumentality of the U.S. government may not be. No assurance can be given that the U.S. government would provide financial support to its agencies and instrumentalities if not required to do so by law. Although U.S. government-sponsored enterprises may be chartered or sponsored by Congress, they are not funded by Congressional appropriations, and their securities are not issued by the U.S. Treasury, or supported by the full faith and credit of the U.S. government, and so involve greater risk than investments in other types of U.S. government securities. In addition, certain governmental entities have been subject to regulatory scrutiny regarding their accounting policies and practices and other concerns that may result in legislation, changes in regulatory oversight and/or other consequences that could adversely affect the credit quality, availability or investment character of securities issued by these entities. Further, uncertainty regarding the status of negotiations in the U.S. government to increase the statutory debt ceiling could increase the risk that the U.S. government may default on payments on certain U.S. government securities and may cause the credit rating of the U.S. government to be downgraded. Any uncertainty regarding the ability of the United States to repay its debt obligations, and any default by the U.S. government, would have a negative impact on the Funds’ investments in U.S. government securities.\n

Valuation Risk. Certain securities may be difficult to value, and there can be no assurance that the valuation placed on a security held by a Fund will reflect that actual price at which the security might be sold in a market transaction.

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	Fund Management

The Investment Adviser\n

Sterling Capital Management LLC (“Sterling Capital” or the “Adviser”) is the investment adviser for the Funds. Sterling Capital, located at 4350 Congress Street, Suite 1000, Charlotte, NC 28209, is a North Carolina limited liability company and an indirect, wholly-owned subsidiary of Fédération des caisses Desjardins du Québec (“Desjardins”). Desjardins is the largest financial cooperative in Canada and the eighth largest in the world, with assets of C$510.2 billion as of December 31, 2025. Sterling Capital manages and supervises the investment of the Funds’ assets on a discretionary basis, subject to oversight by the Board of Trustees. Sterling Capital has provided investment management services to corporations, pension and profit sharing plans, trusts, estates and other institutions and individuals since 1970. As of September 30, 2026, Sterling Capital has more than $67 billion in assets under management.\n

The Funds and Sterling Capital have obtained exemptive relief from the Securities and Exchange Commission (“SEC”) that permits Sterling Capital, subject to certain conditions, including the one-time prior approval of the Funds’ Board of Trustees and shareholders, to appoint and replace sub-advisers, as appropriate, enter into sub-advisory agreements, and amend and terminate sub-advisory agreements on behalf of the Funds without shareholder approval. Sterling Capital has received the one-time approval from the Funds’ Board of Trustees and shareholders. Pursuant to the exemptive relief from the SEC, Sterling Capital now has the ability to change the fee payable to a sub-adviser or appoint a new sub-adviser at a fee different than that paid to the current sub-adviser, which in turn may result in a different fee retained by Sterling Capital. Such relief has been granted only with respect to unaffiliated sub-advisers. Sterling Capital has the ultimate responsibility, subject to oversight by the Funds’ Board of Trustees, to oversee the sub-advisers and recommend their hiring, termination, and replacement.\n

Pursuant to an investment advisory agreement between the Trust, on behalf of each Fund, and the Adviser (the “Investment Advisory Agreement”), the Adviser assumes all investment duties and has full discretionary power and authority with respect to the investment of the assets of each Fund. In that capacity, the Adviser is responsible for making day-to-day investment decisions for each Fund and trading portfolio securities and other investment instruments on behalf of the Fund, including selecting broker-dealers to execute purchase and sale transactions. For the services it provides to each Fund under the Investment Advisory Agreement, each Fund pays the Adviser fees, calculated daily and paid monthly, at an annual rate of 0.45% of the Sterling Capital Large Cap Value Focused Factor ETF’s average daily net assets, 0.60% of the Sterling Capital Small Cap Value Focused Factor ETF’s average daily net assets, 0.75% of the Sterling Capital Small Cap Value ETF’s average daily net assets, 0.35% of the Sterling Capital North Carolina Intermediate Tax-Free ETF’s average daily net assets, and 0.35% of the Sterling Capital Virginia Intermediate Tax-Free ETF’s average daily net assets.\n

Pursuant to a unitary fee administrative services agreement between the Trust, on behalf of the Funds, and the Adviser (the “Unitary Fee Administrative Services Agreement”), the Adviser provides administrative services to each Fund and has agreed to pay all expenses incurred by each Fund except for (i) each Fund’s fees payable to the Adviser under the Investment Advisory Agreement and Unitary Fee Administrative Services Agreement, (ii) expenses incurred in connection with any distribution and service plan adopted by the Trust in compliance with Rule 12b-1 under the 1940 Act, including distribution fees, if any, (iii) investment-related expenses of any kind, including all fees and expenses incurred with respect to the acquisition, holding, voting and/or disposition of portfolio securities, and any expenses incurred with respect to the reorganization, restructuring or workout-related expenses related to any investment, and the execution of portfolio transactions (such as brokerage commissions, clearing and settlement costs, and any other kind of transaction expenses and costs associated with tax reclaims); (iv) borrowing and other investment-related costs and fees, including interest, commitment and other fees and costs; (v) acquired fund fees and expenses; (vi) interest expenses; (vii) taxes (including, but not limited to, income, excise, transfer and withholding taxes) and governmental fees; (viii) litigation expenses of any kind (including fees and expenses of counsel retained by or on behalf of the Trust or a Fund) and any fees, costs or expenses payable by the Trust or a Fund pursuant to indemnification or advancement obligations to which the Trust or such Fund may be subject (pursuant to contract or otherwise); (ix) custody or other expenses attributable to negative interest rates on investments or cash; (x) short dividend expense; (xi) salaries and other compensation or expenses, including travel expenses, of any of the Trust’s executive officers and employees, if any, who are not officers, directors, shareholders, members, partners or employees of the Adviser or its subsidiaries or affiliates; (xii) organizational and offering expenses of the Trust and the Funds; (xiii) costs related to any meetings of shareholders, including any costs associated with the preparation, printing, and transmission of proxy or information statements and proxy solicitation; (xiv) fees or expenses payable or other costs incurred in

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Fund Management

connection with a Fund’s securities lending program; (xv) any other expenses which are capitalized in accordance with generally accepted accounting principles; (xvi) extraordinary expenses; and (xvii) such other expenses as approved by a majority of the Board.\n

For the services it provides to each Fund under the Unitary Fee Administrative Services Agreement, each Fund pays the Adviser fees, calculated daily and paid monthly, at an annual rate as follows: 0.10% of the Sterling Capital Large Cap Value Focused Factor ETF’s average daily net assets, 0.15% of the Sterling Capital Small Cap Value Focused Factor ETF’s average daily net assets, 0.10% of the Sterling Capital North Carolina Intermediate Tax-Free ETF’s average daily net assets, and 0.10% of the Sterling Capital Virginia Intermediate Tax-Free ETF’s average daily net assets.\n

A discussion regarding the basis for the Board of Trustees approving the Investment Advisory Agreement will be available in the Funds’ Form N-CSR for the annual period ended September 30, 2026.\n

Portfolio Managers\n

Sterling Capital Large Cap Value Focused Factor ETF and Sterling Capital Small Cap Value Focused Factor ETF. Robert W. Bridges, CFA^®, Senior Managing Director, CIO and Head of Equity, joined Sterling Capital in 1996 and has investment experience since 1991. He has been co-portfolio manager of the Predecessor Behavioral Large Cap Value Equity Fund since August 2013 and co-portfolio manager of the Predecessor Behavioral Small Cap Value Equity Fund since June 2013. Bob is a graduate of Wake Forest University, where he received a B.S. in Business. He holds the Chartered Financial Analyst^® designation.\n

Robert O. Weller, CFA^®, Executive Director, joined Sterling Capital in 2012 and has investment experience since 1996. He has been co-portfolio manager of the Predecessor Behavioral Large Cap Value Equity Fund since August 2013 and co-portfolio manager of the Predecessor Behavioral Small Cap Value Equity Fund since June 2013. Rob is a graduate of Loyola University Maryland, where he received a B.B.A. in Finance. He holds the Chartered Financial Analyst^® designation.\n

Sterling Capital Small Cap Value ETF. Gerald M. Van Horn, CFA^®, Executive Director, joined Stratton Management Company in 1998 and Sterling Capital as part of a business acquisition in August 2015. He has investment experience since 1996. Jerry has been lead portfolio manager for the Predecessor Small Cap Value Fund since its inception on November 2015 and the predecessor fund since 2000. He received his B.A. in Economics from The College of New Jersey and holds the Chartered Financial Analyst^® designation.\n

Andrew T. DiZio, CFA^®, Executive Director, joined Stratton Management Company in 2012 and Sterling Capital Management as part of a business acquisition in 2015. He has investment experience since 2003. Additionally, Andy served as associate portfolio manager of the Predecessor Small Cap Value Fund since November 2015. Andy received his B.S. in Finance with a minor in Economics from Pennsylvania State University. He holds the Chartered Financial Analyst^® designation and is a member of the CFA Society of Philadelphia and the CFA Institute.\n

Tax-Free Bond Funds. Michael P. McVicker, Executive Director, joined Sterling Capital in 1992 and has investment experience since 1992. He has been co-portfolio manager for each of the Predecessor Tax-Free Bond Funds since November 2025 and was an associate portfolio manager from February 2016 to November 2025. Michael is a graduate of the University of North Carolina - Charlotte where he received his B.S.B.A. in Finance with a minor in Psychology.\n

Mark Merullo, Director, joined Sterling Capital in 2015 and has investment experience since 2010. He has been co-portfolio manager for each of the Predecessor Tax-Free Bond Funds since November 2025. Mark received his B.S. in Recreation, Sport and Wellness from Gordon College.\n

Additional information regarding the portfolio managers’ compensation, other accounts managed by the portfolio managers, and the portfolio managers’ ownership of shares in the Funds for which they are portfolio manager is available in the SAI.\n

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Fund Management

The Administrator and Underwriter\n

Sterling Capital Management LLC (the “Administrator”), 434 Fayetteville St., Suite 500, Raleigh, NC 27601, serves as each Fund’s administrator. The administrative services of the Administrator include providing office space, equipment and clerical personnel to the Funds and supervising custodial, auditing, valuation, bookkeeping, legal and dividend disbursing services. Ultimus Fund Solutions, LLC (“Ultimus”), 225 Pictoria Dr., Suite 450, Cincinnati, OH 45246, serves as each Fund’s sub-administrator.\n

Sterling Capital Distributors, LLC (the “Distributor”), Three Canal Plaza, Suite 100, Portland, ME 04101, serves as the principal underwriter of each Fund’s shares. The Distributor may enter into arrangements with Authorized Participants, banks, broker dealers and other financial intermediaries through which investors may purchase or redeem shares. The Distributor is not affiliated with the Administrator or the Adviser or their affiliates.\n

The SAI has more detailed information about the Adviser and other service providers.\n

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	How to Buy and Sell Shares

Shares of the Funds will not be offered for sale until following the Reorganizations.\n

General \n

Shares of the Fund are listed for trading on the Exchange and can be bought and sold throughout the trading day like shares of other publicly traded companies. However, there can be no guarantee that an active trading market will develop or be maintained.\n

Most investors will buy and sell shares of the Funds in secondary market transactions through broker-dealers. When you buy or sell shares of the Fund on the secondary market, you will pay or receive the market price. You may incur customary brokerage commissions and charges and may pay some or all of the spread between the bid and the offered price in the secondary market on each leg of a round trip (purchase and sale) transaction. The shares of the Fund will trade on the Exchange at prices that may differ to varying degrees from the daily NAV of such shares. A business day with respect to the Fund is any day on which the Exchange is open for business. The Exchange is generally open Monday through Friday and is closed on weekends and the following holidays: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Juneteenth, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.\n

How Shares are Priced \n

The per share NAV of the Fund is computed by dividing the value of the net assets of the Fund (i.e., the value of its total assets minus total liabilities) by its total number of shares outstanding. Expenses and fees, including management and distribution fees, if any, are accrued daily and taken into account for purposes of determining NAV. NAV is determined each business day, normally as of the close of regular trading of the New York Stock Exchange (ordinarily 4:00 p.m., Eastern Time). If the NYSE has an unscheduled early close but certain other markets remain open until their regularly scheduled closing time, the NAV may be determined as of the regularly scheduled closing time of the NYSE. If the NYSE and/or certain other markets close early due to extraordinary circumstances (e.g., weather, terrorism, etc.), the NAV may be calculated as of the early close of the NYSE and/or certain other markets. The NAV generally will not be determined on days when, due to extraordinary circumstances, the NYSE and/or certain other markets do not open for trading. The Funds generally do not determine NAV on holidays observed by the NYSE or on any other day when the NYSE is closed. The NYSE is regularly closed on Saturdays and Sundays, New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Juneteenth, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The price at which an authorized participant purchases shares of a Fund is based on the next calculation of the NAV after the Fund receives a purchase request in good order.\n

When determining NAV, the value of the Fund’s portfolio securities is based on market prices of such securities, which generally means a valuation obtained from an exchange or other market (or based on a price quotation or other equivalent indication of the value supplied by an exchange or other market) or a valuation obtained from an independent pricing service. If a security’s market price is not readily available or does not otherwise accurately reflect the fair value of the security, the security will be valued by another method that the Trust’s Fair Valuation Designee believes will better reflect fair value in accordance with Rule 2a-5 under the 1940 Act and the Trust’s valuation policies and procedures, as approved by the Board. Pursuant to Rule 2a-5 under the 1940 Act, the Board has designated Sterling Capital as the Fund’s “Valuation Designee” to perform the Fund’s fair value determinations, which are subject to Board oversight and certain reporting and other requirements intended to ensure that the Board receives the information it needs to oversee the Sterling Capital’s fair value determinations. Accordingly, in such situations where a market price is not available, Sterling Capital will employ certain Board-approved methodologies to determine a fair value for the securities.\n

Fair valuations will be reviewed by the Board of Trustees on a quarterly basis. Fair value pricing may result in a different determination of a Fund’s NAV price than other valuation methods. Fair value pricing may be used in a variety of circumstances, including but not limited to situations when the value of a security in the Fund’s portfolio has been materially affected by events occurring after the close of the market on which the security is principally traded but prior to the close of the Exchange (such as in the case of a corporate action or other news that may materially affect the price of a security) or trading in a security has been suspended or halted. Accordingly, the Fund’s NAV may reflect certain portfolio securities’ fair values rather than their market prices.\n

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How to Buy and Sell Shares

How Shares are Priced
\ncontinued

A “significant event” is one that occurred prior to a Fund’s valuation time, is not reflected in the most recent market price of a security, and materially affects the value of a security. Generally, such “significant events” relate to developments in foreign securities that occur after the close of trading in their respective markets. The Funds’ accounting agent may obtain fair value prices of foreign securities through utilization of a Fair Value Pricing Service previously approved by the Board where a movement in the U.S. equities market is sufficiently large to constitute a trigger established by the Sterling Capital.\n

Fair value pricing involves subjective judgments, and it is possible that a fair value determination for a security will materially differ from the value that could be realized upon the sale of the security.\n

Investors such as market makers, large investors and institutions who wish to deal in Creation Units directly with the Fund must have entered into an authorized participant agreement (such investors being Authorized Participants) with the Fund’s Distributor and the transfer agent, or purchase through a dealer that has entered into such an agreement. Set forth below is a brief description of the procedures applicable to purchase and redemption of Creation Units.\n

Book Entry \n

Shares are held in book-entry form, which means that no stock certificates are issued. The Depository Trust Company (“DTC”) or its nominee is the record owner of all outstanding shares of the Fund and is recognized as the owner of all shares for all purposes (except for tax purposes).\n

Investors owning shares are beneficial owners as shown on the records of DTC or its participants. DTC serves as the securities depository for all shares. Participants in DTC include securities brokers and dealers, banks, trust companies, clearing corporations and other institutions that directly or indirectly maintain a custodial relationship with DTC. As a beneficial owner of shares, you are not entitled to receive physical delivery of stock certificates or to have shares registered in your name, and you are not considered a registered owner of shares. Therefore, to exercise any right as an owner of shares, you must rely upon the procedures of DTC and its participants. These procedures are the same as those that apply to any other stocks that you hold in book entry or “street name” form. Your account information will be maintained by your financial intermediary, which will provide you with account statements, confirmations of your purchases and sales of shares, and tax information. Your financial intermediary also will be responsible for distributing income dividends and capital gain distributions and for ensuring that you receive shareholder reports and other communications from the Funds.\n

Premium/Discount Information \n

Information regarding how often the shares of the Fund traded on the Exchange at a price above (i.e., at a premium) or below (i.e., at a discount) the NAV of the Fund for various time periods can be found at www.sterlingcapital.com/etf.\n

Frequent Purchases and Redemptions of Fund Shares \n

The Funds do not impose any restrictions on the frequency of purchases and redemptions of Creation Units; however, each Fund reserves the right to reject or limit purchases at any time. The Board of Trustees has not adopted a policy of monitoring for other frequent trading activity because shares of the Fund are listed for trading on a national securities exchange.\n

Distribution and Service Plan\n

The Funds have adopted a Distribution and Service Plan in accordance with Rule 12b-1 under the 1940 Act pursuant to which payments of up to 0.25% of the Fund’s average daily net assets may be made for the sale and distribution of its shares. No payments pursuant to the Distribution and Service Plan are currently paid by the Funds, and there are no plans to impose these fees in the future. These fees may only be imposed after further approval by the Board. Because these fees, if imposed, would be paid out of the Fund’s assets on an ongoing basis, if payments are made in the future, these fees would increase the cost of your investment and may cost you more than paying other types of sales charges.\n

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How to Buy and Sell Shares

Financial Intermediary Support Payments \n

Revenue Sharing \n

The Adviser and/or its affiliates will under certain circumstances pay out of their own assets (and not as an additional charge to a Fund) compensation to selected affiliated and unaffiliated brokers, dealers and other financial intermediaries in connection with the sale and distribution of the shares and/or the retention and/ or servicing of Fund investors and Fund shares. These payments, sometimes referred to as “revenue sharing” payments are payments over and above any sales charges (including Rule 12b-1 fees) and service fees paid by the Funds, which are described elsewhere in this Prospectus. These additional payments may be made to supplement commissions reallowed to dealers, and will take various forms, including: (1) due diligence payments for a financial intermediary’s examination of the Funds and payments for employee training and education relating to the Funds; (2) listing fees for the placement of the Funds on a financial intermediary’s list of funds available for purchase by its clients; (3) fees for providing assistance in promoting the sale of shares; (4) payments in connection with attendance at sales meetings for the promotion of the sale of shares; and (5) payments for the sale of shares and/or the maintenance of share balances. The amount of these payments is determined at the discretion of the Adviser and/or its affiliates from time to time, may be substantial, and may be different for different financial advisors. Receipt of, or the prospect of receiving, this additional compensation may influence your financial intermediary’s recommendation of a Fund or a of a particular share class of a Fund. You should review your financial intermediary’s compensation disclosure and/or talk to your financial advisor for additional information.\n

Shareholder Service Fees\n

The Funds may also directly enter into agreements with financial intermediaries pursuant to which the Funds will pay the financial intermediary for services such as networking or sub-transfer agency services. Payments by the Funds made pursuant to such agreements are generally based on either (1) a percentage of the average daily net assets of clients serviced by such financial intermediary up to a set maximum dollar amount per shareholder account serviced, or (2) the number of accounts serviced by such financial intermediary, with a maximum per account charge for each account serviced. Payments made pursuant to such agreements are in addition to any Rule 12b-1 fees the financial intermediary may also be receiving pursuant to agreements with the Distributor and the revenue sharing payments discussed above.\n

Dividends, Other Distributions and Taxes \n

Shares are traded throughout the day in the secondary market on a national securities exchange on an intraday basis and are created and redeemed in-kind and/or for cash in Creation Units at each day’s next calculated NAV. In cases where a Fund is able to redeem Creation Units in-kind, the in-kind mechanism should help reduce the taxable gains and other adverse effects on the Fund’s portfolio that could arise from frequent cash redemption transactions.\n

A Fund may be required or determine to sell certain holdings from its portfolio or otherwise transact in cash prior to effecting an in-kind redemption to ensure it distributes the proper securities to Authorized Participants. Any such sales may generate taxable gain or loss. At certain times a Fund may be required to transact primarily in cash rather than in-kind. A Fund cannot predict to what extent, if any, it will redeem its shares in kind rather than in cash; nor can a Fund predict the extent to which any such in kind redemption will reduce the taxable gain recognized in connection therewith. A Fund may still realize gains related to either cash redemptions or rebalancing transactions which may need to be distributed.\n

Ordinarily, dividends from net investment income, if any, are declared and paid monthly by the Funds. Each Fund distributes its net realized capital gains, if any, to shareholders annually. The Funds may also pay a special distribution at the end of a calendar year to comply with federal tax requirements.\n

No dividend reinvestment service is provided by the Funds. Broker-dealers may make available the DTC book entry Dividend Reinvestment Service for use by beneficial owners of the Funds for reinvestment of their dividend distributions. Beneficial owners should contact their broker to determine the availability and costs of the service and the details of participation therein. Brokers may require beneficial owners to adhere to specific procedures and timetables. If this service is available and used, dividend distributions of both income and realized gains will be automatically reinvested in additional whole shares of the Fund purchased in the secondary market.\n

\n\n\n\n\n\n\n\n


How to Buy and Sell Shares

Dividends, Other Distributions and Taxes
\ncontinued

Distributions in cash may be reinvested automatically in additional whole shares only if the broker through whom you purchased shares makes such option available.\n

Taxes \n

As with any investment, you should consider how your investment in the Funds will be taxed. The tax information in this Prospectus is provided as general information. You should consult your own tax professional about the tax consequences of an investment in shares. Unless your investment in shares is made through a tax-exempt entity or tax-deferred retirement account, such as an individual retirement account, you need to be aware of the possible tax consequences when:\n

\n\n\n\n\n\n

●\t

A Fund makes distributions,\n

\n\n\n\n\n\n

●\t

You sell your shares listed on the Exchange, and\n

\n\n\n\n\n\n

●\t

You purchase or redeem Creation Units.\n

Taxes on Distributions\n

Distributions from a Fund’s net investment income, including net short-term capital gains, if any, other than exempt-interest dividends (described above) are taxable to you as ordinary income, except that the Fund’s dividends attributable to its “qualified dividend income” (i.e., dividends received on stock of most domestic and certain foreign corporations with respect to which the Fund satisfies certain holding period and other restrictions), if any, generally are subject to federal income tax for noncorporate shareholders who satisfy those restrictions with respect to their shares at the rate for net capital gain. A part of a Fund’s dividends also may be eligible for the dividends-received deduction allowed to corporations -- the eligible portion may not exceed the aggregate dividends the Fund receives from domestic corporations subject to federal income tax (excluding REITs) and excludes dividends from foreign corporations -- subject to similar restrictions. However, dividends a corporate shareholder deducts pursuant to that deduction are subject indirectly to the federal alternative minimum tax.\n

In general, your distributions are subject to federal income tax when they are paid, whether you take them in cash or reinvest them in the Fund (if that option is available). Distributions reinvested in additional shares through the means of a dividend reinvestment service, if available, will be taxable to shareholders acquiring the additional shares to the same extent as if such distributions had been received in cash. Distributions of net long-term capital gains, if any, in excess of net short-term capital losses are taxable as long-term capital gains, regardless of how long you have held shares.\n

Distributions in excess of a Fund’s current and accumulated earnings and profits are treated as a tax-free return of capital to the extent of your basis in shares and as capital gain thereafter. A distribution will reduce a Fund’s NAV per Share and may be taxable to you as ordinary income or capital gain (as described above) even though, from an investment standpoint, the distribution may constitute a return of capital.\n

If you are a resident or a citizen of the U.S., by law, backup withholding at a 24% rate will apply to your distributions and proceeds if you have not provided a taxpayer identification number or social security number and made other required certifications.\n

Taxes on Exchange-Listed Share Sales \n

Any capital gain or loss realized upon a sale of shares is generally treated as long-term capital gain or loss if shares have been held for more than one year and as short-term capital gain or loss if shares have been held for one year or less. The ability to deduct capital losses from sales of shares may be limited.\n

\n\n\n\n\n\n\n\n


How to Buy and Sell Shares

Taxes on Purchase and Redemption of Creation Units \n

An Authorized Participant that exchanges securities for Creation Units generally will recognize a gain or a loss equal to the difference between the market value of the Creation Units at the time of the exchange and the sum of the exchanger’s aggregate basis in the securities surrendered plus any Cash Component it pays. An Authorized Participant that exchanges Creation Units for securities will generally recognize a gain or loss equal to the difference between the exchanger’s basis in the Creation Units and the sum of the aggregate market value of the securities received plus any cash equal to the difference between the NAV of shares being redeemed and the value of the securities. The Internal Revenue Service, however, may assert that a loss realized upon an exchange of securities for Creation Units cannot be deducted currently under the rules governing “wash sales” or for other reasons. Persons exchanging securities should consult their own tax advisor with respect to whether wash sale rules apply and when a loss might be deductible.\n

Any capital gain or loss realized upon redemption of Creation Units is generally treated as long-term capital gain or loss if shares have been held for more than one year and as short-term capital gain or loss if shares have been held for one year or less.\n

If an Authorized Participant purchases or redeems Creation Units, the Authorized Participant will be sent a confirmation statement showing how many shares the Authorized Participant purchased or sold and at what price.\n

The foregoing discussion summarizes some of the possible consequences under current federal tax law of an investment in the Fund. It is not a substitute for personal tax advice. Consult your personal tax advisor about the potential tax consequences of an investment in shares under all applicable tax laws. See “Additional Tax Information” in the SAI for more information.\n

How Authorized Purchasers Buy Creation Units\n

In order to purchase Creation Units of the Fund, an Authorized Purchaser must generally deposit a designated portfolio of equity securities (the “Deposit Securities”) and generally make a small cash payment referred to as the “Cash Component.” For those Authorized Participants that are not eligible for trading a Deposit Security, custom orders are available. The list of the names and the numbers of shares of the Deposit Securities is made available by the Fund’s custodian through the facilities of the National Securities Clearing Corporation (the “NSCC”), immediately prior to the opening of business each day of the Exchange. The Cash Component represents the difference between the NAV of a Creation Unit and the market value of the Deposit Securities. In the case of custom orders, cash-in-lieu may be added to the Cash Component to replace any Deposit Securities that the Authorized Participant may not be eligible to trade. The Fund may, in certain circumstances that may occur regularly, offer Creation Units partially or solely for cash. Creation and redemption baskets may differ, and the Fund will accept “custom baskets” in accordance with the requirements of Rule 6c-11 under the 1940 Act. Additional information regarding custom baskets is contained in the Fund’s SAI.\n

Orders must be placed in proper form by or through either (i) a “Participating Party” i.e., a broker-dealer or other participant in the Clearing Process of the Continuous Net Settlement System of the NSCC (the “Clearing Process”) or (ii) a participant of the DTC (“DTC Participant”) that has entered into an agreement with the Trust, the Distributor and the transfer agent, with respect to purchases and redemptions of Creation Units. All standard orders must be placed for one or more whole Creation Units of shares of a Fund and must be received by the Distributor in proper form no later than 2:00 p.m. Eastern Time, two hours prior to the close of regular trading on the Exchange (ordinarily 4:00 p.m. Eastern Time) (“Closing Time”) in order to receive that day’s closing NAV per Share. In the case of custom orders, as further described in the SAI, the Distributor must receive by the Order no later than two hours prior to Closing Time in order to receive that day’s closing NAV per Share. A custom order may be placed by an Authorized Participant in the event that the Trust permits or requires the substitution of an amount of cash to be added to the Cash Component to replace any Deposit Security which may not be available in sufficient quantity for delivery or which may not be eligible for trading by such Authorized Participant or the investor for which it is acting or any other relevant reason.\n

A fixed creation transaction fee of $300 per transaction (the “Creation Transaction Fee”) is applicable to each transaction regardless of the number of Creation Units purchased in the transaction. An additional variable charge for transactions effected outside the Clearing Process or for cash creations or partial cash creations may also be imposed to compensate the Fund for the costs associated with buying the applicable securities. The Fund may adjust these fees from time to time based on actual experience. The price for each Creation Unit will equal the daily NAV per Share times the number of shares in a Creation Unit plus the fees described above and, if applicable, any transfer taxes.\n

\n\n\n\n\n\n\n\n


How to Buy and Sell Shares

Dividends, Other Distributions and Taxes
\ncontinued

The Funds reserve the right to reject or revoke a creation order transmitted to it by the Distributor or its agent in respect to the Funds for any legally permissible reason, as described in the SAI.\n

Shares of the Fund may be issued in advance of receipt of all Deposit Securities subject to various conditions, including a requirement to maintain cash at least equal to 115% of the market value of the missing Deposit Securities on deposit with the Trust.\n

Legal Restrictions on Transactions in Certain Stocks \n

An Authorized Person subject to a legal restriction with respect to a particular stock required to be deposited in connection with the purchase of a Creation Unit may, at the Fund’s discretion, be permitted to deposit an equivalent amount of cash in substitution for any stock which would otherwise be included in the Deposit Securities applicable to the purchase of a Creation Unit.\n

How Authorized Purchasers Redeem Creation Units \n

Shares may be redeemed in kind or in cash on a day the Exchange is open for business. If the redemption is in kind, it is consummated only in Creation Units at their NAV. The Fund’s custodian makes available immediately prior to the opening of business each day of the Exchange, through the facilities of the NSCC, the list of the names and the numbers of shares of the Fund’s portfolio securities that will be applicable that day to redemption requests in proper form (“Fund Securities”). Because Fund Securities received on redemption may not be identical to Deposit Securities, which are applicable to purchases of Creation Units. The redemption proceeds consist of the Fund Securities, plus cash in an amount equal to the difference between the NAV of shares being redeemed as next determined after receipt by the transfer agent of a redemption request in proper form, and the value of the Fund Securities (the “Cash Redemption Amount”), less the applicable redemption fee and, if applicable, any transfer taxes. Should the Fund Securities have a value greater than the NAV of shares being redeemed, a compensating cash payment to the Fund equal to the differential, plus the applicable redemption fee and, if applicable, any transfer taxes will be required to be arranged for, by or on behalf of the redeeming shareholder.\n

An order to redeem Creation Units of the Fund may only be effected by or through an Authorized Participant. An order to redeem must be placed for one or more whole Creation Units and must be received by the transfer agent in proper form no later than 2:00 p.m. Eastern Time, two hours prior to Closing Time in order to receive that day’s closing NAV per Share. In the case of custom orders, the transfer agent must receive the Order agent no later than 2:00 p.m. Eastern Time.\n

A fixed redemption transaction fee of $300 per transaction (the “Redemption Transaction Fee”) is applicable to each redemption transaction regardless of the number of Creation Units redeemed in the transaction. An additional variable charge for cash redemptions or partial cash redemptions may also be imposed to compensate the Fund for the costs associated with selling the applicable securities. The Fund may adjust these fees from time to time based on actual experience. The Fund reserves the right to effect redemptions in cash. A shareholder may request a cash redemption in lieu of securities, however, the Fund may, in its discretion, reject any such request.\n

The Funds (or the Distributor on behalf of the Funds) shall retain the right, without notice, to reject any redemption order or suspend transactions in Fund shares at any time in accordance with the 1940 Act.\n

Continuous Offering \n

The method by which Creation Units are purchased and traded may raise certain issues under applicable securities laws. Because new Creation Units are issued and sold by the Fund on an ongoing basis, at any point a “distribution,” as such term is used in the Securities Act of 1933 (the “Securities Act”), may occur. Broker-dealers and other persons are cautioned that some activities on their part may, depending on the circumstances, result in their being deemed participants in a distribution in a manner which could render them statutory underwriters and subject them to the Prospectus delivery and liability provisions of the Securities Act.\n

\n\n\n\n\n\n\n\n


How to Buy and Sell Shares

For example, a broker-dealer firm or its client may be deemed a statutory underwriter if it takes Creation Units after placing an order with the Fund’s distributor, breaks them down into individual shares of the Fund, and sells such shares directly to customers, or if it chooses to couple the creation of a supply of new shares with an active selling effort involving solicitation of secondary market demand for shares of the Fund. A determination of whether one is an underwriter for purposes of the Securities Act must take into account all the facts and circumstances pertaining to the activities of the broker-dealer or its client in the particular case, and the examples mentioned above should not be considered a complete description of all the activities that could lead to categorization as an underwriter.\n

Broker-dealer firms should also note that dealers who are not “underwriters” but are effecting transactions in shares of the Fund, whether or not participating in the distribution of such shares, are generally required to deliver a prospectus. This is because the prospectus delivery exemption in Section 4(a)(3) of the Securities Act is not available with respect to such transactions as a result of Section 24(d) of the 1940 Act. As a result, broker dealer-firms should note that dealers who are not underwriters but are participating in a distribution (as contrasted with ordinary secondary market transactions) and thus dealing with shares of the Fund that are part of an “unsold allotment” within the meaning of Section 4(a)(3)(C) of the Securities Act would be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act. Firms that incur a prospectus delivery obligation with respect to shares of the Fund are reminded that under Rule 153 under the Securities Act, a prospectus delivery obligation under Section 5(b)(2) of the Securities Act owed to an exchange member in connection with a sale on the Exchange is satisfied by the fact that the Fund’s Prospectus is available on the SEC’s electronic filing system. The prospectus delivery mechanism provided in Rule 153 is only available with respect to transactions on an exchange. \n

Additional Information About the Funds\n

Disclosure of Portfolio Holdings\n

Information regarding the Funds’ policies and procedures regarding the disclosure of portfolio holdings is contained in our SAI.\n

Investments by Investment Companies\n

Section 12(d)(1) of the 1940 Act restricts investments by registered investment companies in the securities of other investment companies, including shares of the Funds. Registered investment companies are permitted to invest in a Fund beyond the limits set forth in Section 12(d)(1), subject to certain terms and conditions, including that such investment companies enter into an agreement with the Fund.\n

Investment in Exchange-Traded Funds\n

The Funds may each invest in ETFs.\n

Investment in ETFs offers, among other things, an efficient means to achieve diversification to a particular industry that would otherwise only be possible through a series of transactions and numerous holdings. Although similar diversification benefits may be achieved through an investment in another investment company, ETFs generally offer greater liquidity and lower expenses. Because an ETF charges its own fees and expenses, fund shareholders will indirectly bear these costs. The Funds will also incur brokerage commissions and related charges when purchasing shares in an ETF in secondary market transactions. Unlike typical investment company shares, which are valued once daily, shares in an exchange-traded fund may be purchased or sold on a listed securities exchange throughout the trading day at market prices that are generally close to NAV. See “Additional Investment Strategies and Risks” for information regarding the risks associated with investment in an ETF.\n

Because ETFs are investment companies, investment in ETFs would, absent exemptive relief, be limited under applicable statutory limitations. These limitations restrict a Fund’s investment in the shares of an ETF or other investment company to up to 5% of the Fund’s assets (which may represent no more than 3% of the outstanding voting stock of such ETF or other investment company) and limit aggregate investments in all ETFs and investment companies to 10% of the Fund’s assets (collectively, the “3-5-10 Limitations”). The Funds may invest in certain ETFs in excess of the 3-5-10 Limitations pursuant to Rule 12d1-4 under the 1940 Act or another statutory or rule exemption, subject to certain conditions and to the extent permitted by their investment strategies.\n

\n\n\n\n\n\n\n\n


How to Buy and Sell Shares

Additional Information About the Funds
\ncontinued

Householding\n

In order to reduce shareholder expenses, we may, unless you instruct otherwise, mail only one copy of a Fund’s prospectus and each annual and semi-annual report to those addresses shared by two or more accounts. This process is commonly known as “householding.” If you do not wish to receive individual copies of these documents, please call (888) 637-7798, or if your shares are held through a financial institution, please contact them directly. We will begin sending your individual copies to you within 30 days of our receipt of your request to discontinue householding.\n

Contractual Arrangements\n

Sterling Capital Funds (the “Trust”) enters into contractual arrangements with various parties, including, among others, the Adviser, Administrator, Fund accountant and sub-administrator, Distributor, custodian and transfer agent, who provide services to the Funds. Shareholders are not parties to or intended (or “third-party”) beneficiaries of, any of those contractual arrangements, and those contractual arrangements are not intended to create in any individual shareholder or group of shareholders any right to enforce them against the service providers or to seek any remedy under them against the service providers, either directly or on behalf of the Trust.\n

This Prospectus provides information concerning the Trust and the Funds that you should consider in determining whether to purchase shares of a Fund. None of this Prospectus, the SAI or any of the above-referenced contracts is intended to, nor does it, give rise to an agreement or contract between the Trust or the Funds and any investor, or give rise to any contract or other rights in any individual shareholder, group of shareholders or other person other than any rights conferred explicitly by federal or state securities laws that may not be waived.\n

\n\n\n\n\n\n\n\n\n\n

$\"\"$
	Other Information About the Funds

Financial Highlights\n

Sterling Capital Large Cap Value Focus Factor ETF\n

As a result of the Reorganization, the Financial Highlights for the Sterling Capital Large Cap Value Focus Factor ETF is the financial history of the Predecessor Behavioral Large Cap Value Equity Fund. The Financial Highlights present the Predecessor Behavioral Large Cap Value Equity Fund’s Institutional shares’ financial performance for the past five years. Certain information reflects financial results for a single Predecessor Behavioral Large Cap Value Equity Fund share. The total returns represent the rate that an investor would have earned or lost on an investment in the Predecessor Behavioral Large Cap Value Equity Fund’s Institutional shares assuming reinvestment of dividends and capital gains. The information provided below for the periods ended September 30 has been audited by Cohen & Company, Ltd., the independent registered public accounting firm for the Predecessor Behavioral Large Cap Value Equity Fund, whose report, along with the Predecessor Behavioral Large Cap Value Equity Fund’s financial statements, are included in the Predecessor Behavioral Large Cap Value Equity Fund’s Form N-CSR filing, which is available upon request. The information for the six months ended March 31, 2026 has been derived from the Predecessor Behavioral Large Cap Value Equity Fund’s semi-annual financial statements included in the Predecessor Behavioral Large Cap Value Equity Fund’s Form N-CSRS filing, which has not been audited and is available upon request.

		Investment Activities		Distributions
	Net asset \nvalue, \nbeginning \nof year		Net \ninvestment \nincome \n(loss)^(a)			Net \nrealized/ \nunrealized \ngain (loss) on \ninvestments	Total from \ninvestment \nActivities		Net \ninvestment \nincome			Net realized \ngains on investments		Return \nof \ncapital	Total from \ndistributions
Predecessor Behavioral Large Cap Value Equity Fund
Period Ended March 31, 2026 (Unaudited)	$	34.78			0.29		2.93			3.22			—		—	—		—
Year Ended September 30, 2025	$	30.12			0.52		4.70			5.22			(0.56	)	—	—		(0.56	)
Year Ended September 30, 2024	$	23.28			0.52		6.84			7.36			(0.52	)	—	—		(0.52	)
Year Ended September 30, 2023	$	20.34			0.42		2.98			3.40			(0.46	)	—	—		(0.46	)
Year Ended September 30, 2022	$	22.96			0.46		(2.62	)		(2.16	)		(0.46	)	—	—		(0.46	)
Year Ended September 30, 2021	$	16.83			0.09		6.24			6.33			(0.04	)	—	(0.16	)	(0.20	)

\n\n\n\n\n

^(a)

\tPer share net investment income has been calculated using the average shares method.\n

\n\n\n\n\n

^(b)

\tNot annualized.\n

\n\n\n\n\n

^(c)

\tAnnualized.\n

\n\n\n\n\n

*\t

During the periods certain fees were waived. If such reductions had not occurred, the ratios would have been as indicated.\n

\n\n\n\n\n

**\t

Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.\n

						Ratios/Supplementary Data
Net asset \nvalue, \nend of \nyear		Total \nReturn \n(excludes \nsales charge)			Net assets, \nEnd of \nyear \n(000)				Ratio of net expenses \nto average net assets	Ratio of net investment income (loss) to average \nnet assets		Ratio of \nexpenses to \naverage net \nassets*			Portfolio \nturnover**

$	38.00		10.05	%^(b)			$	7,534		0.76	%^(c)		1.58	%^(c)		0.76	%^(c)	68.15	%^(b)
$	34.78		17.51	%			$	5,827		0.80	%		1.63	%		0.80	%	108.16	%
$	30.12		31.80	%			$	2,274		0.75	%		1.92	%		0.78	%	99.00	%
$	23.28		16.74	%			$	1,499		0.84	%		1.83	%		0.90	%	110.98	%
$	20.34		(9.62	)%			$	1,652		0.75	%		1.94	%		0.78	%	125.15	%
$	22.96		37.90	%			$	2,023		0.64	%		0.42	%		0.78	%	122.64	%

\n\n\n\n\n\n\n\n\n


Other Information About the Funds

Financial Highlights
\ncontinued

Sterling Capital Small Cap Value Focus Factor ETF\n

As a result of the Reorganization, the Financial Highlights for the Sterling Capital Small Cap Value Focus Factor ETF is the financial history of the Predecessor Behavioral Small Cap Value Equity Fund. The Financial Highlights present the Predecessor Behavioral Small Cap Value Equity Fund’s Institutional shares’ financial performance for the past five years. Certain information reflects financial results for a single Predecessor Behavioral Small Cap Value Equity Fund share. The total returns represent the rate that an investor would have earned or lost on an investment in the Predecessor Behavioral Small Cap Value Equity Fund’s Institutional shares assuming reinvestment of dividends and capital gains. The information provided below for the periods ended September 30 has been audited by Cohen & Company, Ltd., the independent registered public accounting firm for the Predecessor Behavioral Small Cap Value Equity Fund, whose report, along with the Predecessor Behavioral Small Cap Value Equity Fund’s financial statements, are included in the Predecessor Behavioral Small Cap Value Equity Fund’s Form N-CSR filing, which is available upon request. The information for the six months ended March 31, 2026 has been derived from the Predecessor Behavioral Small Cap Value Equity Fund’s semi-annual financial statements included in the Predecessor Behavioral Small Cap Value Equity Fund’s Form N-CSRS filing, which has not been audited and is available upon request.\n

		Investment Activities		Distributions
	Net asset \nvalue, \nbeginning \nof year		Net \ninvestment \nincome \n(loss)^(a)			Net \nrealized/ \nunrealized \ngain (loss) on \ninvestments	Total from \ninvestment \nActivities		Net \ninvestment \nincome			Net realized \ngains on investments		Return \nof \ncapital	Total from \ndistributions
Predecessor Behavioral Small Cap Value Equity Fund
Period Ended March 31, 2026 (Unaudited)	$	20.87			0.14		1.19			1.33			(0.15	)	(1.78	)	—	(1.93	)
Year Ended September 30, 2025	$	21.63			0.32		0.91			1.23			(0.29	)	(1.70	)	—	(1.99	)
Year Ended September 30, 2024	$	17.15			0.32		4.54			4.86			(0.38	)	—		—	(0.38	)
Year Ended September 30, 2023	$	15.29			0.31		1.81			2.12			(0.26	)	—		—	(0.26	)
Year Ended September 30, 2022	$	19.58			0.22		(2.49	)		(2.27	)		(0.20	)	(1.82	)	—	(2.02	)
Year Ended September 30, 2021	$	11.95			0.16		7.60			7.76			(0.13	)	—		—	(0.13	)

\n\n\n\n\n

^(a)

\tPer share net investment income has been calculated using the average shares method.\n

\n\n\n\n\n

^(b)

\tNot annualized.\n

\n\n\n\n\n

^(c)

\tAnnualized.\n

\n\n\n\n\n

*\t

During the periods certain fees were waived. If such reductions had not occurred, the ratios would have been as indicated.\n

\n\n\n\n\n

**\t

Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.\n

						Ratios/Supplementary Data
Net asset \nvalue, \nend of \nyear		Total \nReturn \n(excludes \nsales charge)			Net assets, \nEnd of \nyear \n(000)				Ratio of net expenses \nto average net assets	Ratio of net investment income (loss) to average \nnet assets		Ratio of \nexpenses to \naverage net \nassets*			Portfolio \nturnover**

$	20.27		6.59	%^(b)			$	6,350		0.89	%^(c)		1.33	%^(c)		0.89	%^(c)	49.67	%^(b)
$	20.87		5.68	%			$	6,179		0.84	%		1.59	%		0.84	%	89.59	%
$	21.63		28.48	%			$	6,281		0.84	%		1.63	%		0.84	%	74.00	%
$	17.15		13.86	%			$	5,804		0.85	%		1.79	%		0.85	%	154.69	%
$	15.29		(13.35	)%			$	9,788		0.85	%		1.13	%		0.85	%	70.82	%
$	19.58		65.21	%			$	14,639		0.81	%		0.89	%		0.81	%	111.07	%

\n\n\n\n\n\n\n\n\n


Other Information About the Funds

Financial Highlights
\ncontinued

Sterling Capital Small Cap Value ETF\n

As a result of the Reorganization, the Financial Highlights for the Sterling Capital Small Cap Value ETF is the financial history of the Predecessor Small Cap Value Fund. The Financial Highlights present the Predecessor Small Cap Value Fund’s Institutional shares’ financial performance for the past five years. Certain information reflects financial results for a single Predecessor Small Cap Value Fund share. The total returns represent the rate that an investor would have earned or lost on an investment in the Predecessor Small Cap Value Fund’s Institutional shares assuming reinvestment of dividends and capital gains. The information provided below for the periods ended September 30 has been audited by Cohen & Company, Ltd., the independent registered public accounting firm for the Predecessor Small Cap Value Fund, whose report, along with the Predecessor Small Cap Value Fund’s financial statements, are included in the Predecessor Small Cap Value Fund’s Form N-CSR filing, which is available upon request. The information for the six months ended March 31, 2026 has been derived from the Predecessor Small Cap Value Fund’s semi-annual financial statements included in the Predecessor Small Cap Value Fund’s Form N-CSRS filing, which has not been audited and is available upon request.\n

		Investment Activities		Distributions
	Net asset \nvalue, \nbeginning \nof year		Net \ninvestment \nincome \n(loss)^(a)			Net \nrealized/ \nunrealized \ngain (loss) on \ninvestments	Total from \ninvestment \nActivities		Net \ninvestment \nincome			Net realized \ngains on investments		Return \nof \ncapital	Total from \ndistributions
Predecessor Small Cap Value Fund
Period Ended March 31, 2026 (Unaudited)	$	42.92			0.10		2.85			2.95			(0.14	)	(7.22	)	—	(7.36	)
Year Ended September 30, 2025	$	48.50			0.17		3.50			3.67			(0.11	)	(9.14	)	—	(9.25	)
Year Ended September 30, 2024	$	52.79			0.23		11.91			12.14			(0.23	)	(16.20	)	—	(16.43	)
Year Ended September 30, 2023	$	58.24			0.28		8.20			8.48			(0.25	)	(13.68	)	—	(13.93	)
Year Ended September 30, 2022	$	83.58			0.27		(8.25	)		(7.98	)		(0.09	)	(17.27	)	—	(17.36	)
Year Ended September 30, 2021	$	64.04			0.17		31.01			31.18			(0.42	)	(11.22	)	—	(11.64	)

\n\n\n\n\n

^(a)

\tPer share net investment income has been calculated using the average shares method.\n

\n\n\n\n\n

^(b)

\tNot annualized.\n

\n\n\n\n\n

^(c)

\tAnnualized.\n

\n\n\n\n\n

*\t

During the periods certain fees were waived. If such reductions had not occurred, the ratios would have been as indicated.\n

\n\n\n\n\n

**\t

Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.\n

						Ratios/Supplementary Data
Net asset \nvalue, \nend of \nyear		Total \nReturn \n(excludes \nsales charge)			Net assets, \nEnd of \nyear \n(000)				Ratio of net expenses \nto average net assets	Ratio of net investment income (loss) to average \nnet assets		Ratio of \nexpenses to \naverage net \nassets*			Portfolio \nturnover**

$	38.51		7.50	%^(b)			$	163,096		1.06	%^(c)		0.49	%^(c)		1.06	%^(c)	3.86	%^(b)
$	42.92		8.10	%			$	164,981		1.03	%		0.41	%		1.03	%	6.19	%
$	48.50		28.85	%			$	187,448		1.05	%		0.50	%		1.06	%	2.87	%
$	52.79		15.31	%			$	261,706		1.03	%		0.51	%		1.05	%	0.77	%
$	58.24		(13.93	)%			$	350,163		1.00	%		0.38	%		1.00	%	5.26	%
$	83.58		52.78	%			$	514,025		0.98	%		0.22	%		1.02	%	6.15	%

\n\n\n\n\n\n\n\n\n


Other Information About the Funds

Financial Highlights
\ncontinued

Sterling Capital North Carolina Intermediate Tax-Free ETF\n

As a result of the Reorganization, the Financial Highlights for the Sterling Capital North Carolina Intermediate Tax-Free ETF is the financial history of the Predecessor North Carolina Intermediate Tax-Free Fund. The Financial Highlights present the Predecessor North Carolina Intermediate Tax-Free Fund’s Institutional shares’ financial performance for the past five years. Certain information reflects financial results for a single Predecessor North Carolina Intermediate Tax-Free Fund share. The total returns represent the rate that an investor would have earned or lost on an investment in the Predecessor North Carolina Intermediate Tax-Free Fund’s Institutional shares assuming reinvestment of dividends and capital gains. The information provided below for the periods ended September 30 has been audited by Cohen & Company, Ltd., the independent registered public accounting firm for the Predecessor North Carolina Intermediate Tax-Free Fund, whose report, along with the Predecessor North Carolina Intermediate Tax-Free Fund’s financial statements, are included in the Predecessor North Carolina Intermediate Tax-Free Fund’s Form N-CSR filing, which is available upon request. The information for the six months ended March 31, 2026 has been derived from the Predecessor North Carolina Intermediate Tax-Free Fund’s semi-annual financial statements included in the Predecessor North Carolina Intermediate Tax-Free Fund’s Form N-CSRS filing, which has not been audited and is available upon request.\n

		Investment Activities		Distributions
	Net asset \nvalue, \nbeginning \nof year		Net \ninvestment \nincome \n(loss)^(a)			Net \nrealized/ \nunrealized \ngain (loss) on \ninvestments	Total from \ninvestment \nActivities		Net \ninvestment \nincome			Net realized \ngains on investments		Return \nof \ncapital	Total from \ndistributions
Predecessor North Carolina Intermediate Tax-Free Fund
Period Ended March 31, 2026 (Unaudited)	$	10.12			0.14		(0.05	)		0.09			(0.14	)	—	—	(0.14	)
Year Ended September 30, 2025	$	10.21			0.27		(0.09	)		0.18			(0.27	)	—	—	(0.27	)
Year Ended September 30, 2024	$	9.75			0.25		0.47			0.72			(0.26	)	—	—	(0.26	)
Year Ended September 30, 2023	$	9.83			0.23		(0.08	)		0.15			(0.23	)	—	—	(0.23	)
Year Ended September 30, 2022	$	10.97			0.19		(1.14	)		(0.95	)		(0.19	)	—	—	(0.19	)
Year Ended September 30, 2021	$	11.12			0.18		(0.15	)		0.03			(0.18	)	—	—	(0.18	)

\n\n\n\n\n

^(a)

\tPer share net investment income has been calculated using the average shares method.\n

\n\n\n\n\n

^(b)

\tNot annualized.\n

\n\n\n\n\n

^(c)

\tAnnualized.\n

\n\n\n\n\n

*\t

During the periods certain fees were waived. If such reductions had not occurred, the ratios would have been as indicated.\n

\n\n\n\n\n

**\t

Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.\n

						Ratios/Supplementary Data
Net asset \nvalue, \nend of \nyear		Total \nReturn \n(excludes \nsales charge)			Net assets, \nEnd of \nyear \n(000)				Ratio of net expenses \nto average net assets	Ratio of net investment income (loss) to average \nnet assets		Ratio of \nexpenses to \naverage net \nassets*			Portfolio \nturnover**

$	10.07		0.84	%^(b)			$	94,920		0.59	%^(c)		2.68	%^(c)		0.59	%^(c)	6.34	%^(b)
$	10.12		1.80	%			$	97,241		0.58	%		2.67	%		0.58	%	29.62	%
$	10.21		7.39	%			$	106,881		0.60	%		2.52	%		0.60	%	20.34	%
$	9.75		1.44	%			$	110,951		0.60	%		2.24	%		0.60	%	38.07	%
$	9.83		(8.78	)%			$	126,739		0.57	%		1.76	%		0.57	%	50.21	%
$	10.97		0.24	%			$	154,297		0.55	%		1.59	%		0.55	%	7.97	%

\n\n\n\n\n\n\n\n\n


Other Information About the Funds

Financial Highlights
\ncontinued

Sterling Capital Virginia Intermediate Tax-Free ETF\n

As a result of the Reorganization, the Financial Highlights for the Sterling Capital Virginia Intermediate Tax-Free ETF is the financial history of the Predecessor Virginia Intermediate Tax-Free Fund. The Financial Highlights present the Predecessor Virginia Intermediate Tax-Free Fund’s Institutional shares’ financial performance for the past five years. Certain information reflects financial results for a single Predecessor Virginia Intermediate Tax-Free Fund share. The total returns represent the rate that an investor would have earned or lost on an investment in the Predecessor Virginia Intermediate Tax-Free Fund’s Institutional shares assuming reinvestment of dividends and capital gains. The information provided below for the periods ended September 30 has been audited by Cohen & Company, Ltd., the independent registered public accounting firm for the Predecessor Virginia Intermediate Tax-Free Fund, whose report, along with the Predecessor Virginia Intermediate Tax-Free Fund’s financial statements, are included in the Predecessor Virginia Intermediate Tax-Free Fund’s Form N-CSR filing, which is available upon request. The information for the six months ended March 31, 2026 has been derived from the Predecessor Virginia Intermediate Tax-Free Fund’s semi-annual financial statements included in the Predecessor Virginia Intermediate Tax-Free Fund’s Form N-CSRS filing, which has not been audited and is available upon request.\n

		Investment Activities		Distributions
	Net asset \nvalue, \nbeginning \nof year		Net \ninvestment \nincome \n(loss)^(a)			Net \nrealized/ \nunrealized \ngain (loss) on \ninvestments	Total from \ninvestment \nActivities		Net \ninvestment \nincome			Net realized \ngains on investments		Return \nof \ncapital	Total from \ndistributions
Predecessor Virginia Intermediate Tax-Free Fund
Period Ended March 31, 2026 (Unaudited)	$	11.07			0.14		(0.06	)		0.08			(0.14	)	—		—	(0.14	)
Year Ended September 30, 2025	$	11.19			0.28		(0.12	)		0.16			(0.28	)	—		—	(0.28	)
Year Ended September 30, 2024	$	10.69			0.26		0.50			0.76			(0.26	)	—		—	(0.26	)
Year Ended September 30, 2023	$	10.77			0.22		(0.07	)		0.15			(0.23	)	—		—	(0.23	)
Year Ended September 30, 2022	$	11.97			0.19		(1.19	)		(1.00	)		(0.19	)	(0.01	)	—	(0.20	)
Year Ended September 30, 2021	$	12.22			0.19		(0.22	)		(0.03	)		(0.19	)	(0.03	)	—	(0.22	)

\n\n\n\n\n

^(a)

\tPer share net investment income has been calculated using the average shares method.\n

\n\n\n\n\n

^(b)

\tNot annualized.\n

\n\n\n\n\n

^(c)

\tAnnualized.\n

\n\n\n\n\n

*\t

During the periods certain fees were waived. If such reductions had not occurred, the ratios would have been as indicated.\n

\n\n\n\n\n

**\t

Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between classes of shares issued.\n

						Ratios/Supplementary Data
Net asset \nvalue, \nend of \nyear		Total \nReturn \n(excludes \nsales charge)			Net assets, \nEnd of \nyear \n(000)				Ratio of net expenses \nto average net assets	Ratio of net investment income (loss) to average \nnet assets		Ratio of \nexpenses to \naverage net \nassets*			Portfolio \nturnover**

$	11.01		0.72	%^(b)			$	23,964		0.65	%^(c)		2.52	%^(c)		0.65	%^(c)	8.82	%^(b)
$	11.07		1.48	%			$	23,260		0.62	%		2.55	%		0.62	%	17.40	%
$	11.19		7.19	%			$	35,603		0.62	%		2.39	%		0.62	%	20.54	%
$	10.69		1.30	%			$	50,995		0.61	%		2.03	%		0.61	%	17.86	%
$	10.77		(8.41	)%			$	66,967		0.58	%		1.67	%		0.58	%	37.23	%
$	11.97		(0.27	)%			$	65,071		0.56	%		1.56	%		0.56	%	8.98	%

For more information about the Funds, the following documents are available free upon request:\n

Annual/Semi-Annual Reports (Reports):\n

The Funds’ annual and semi-annual reports to shareholders and Form N-CSR will contain additional information on the Funds’ investments. In the annual report, you will find a discussion of the market conditions and investment strategies that significantly affected the Funds’ performance during their last fiscal year. In Form N-CSR, you will find the annual and semi-annual financial statements.\n

Statement of Additional Information (SAI):\n

The SAI provides more detailed information about the Funds, including their operations and investment policies. It is incorporated by reference and is legally considered a part of this Prospectus.\n

\n\n\n\n

You can get free copies of annual and semi-annual reports and the SAI, prospectuses of other members of the Sterling Capital Funds Family, or request other information and discuss your questions about the Funds by contacting a broker or bank that sells the Funds or contact the Funds at:\n

Sterling Capital Funds
\nc/o Ultimus Fund Solutions, LLC
\nP.O. Box 46707
\nCincinnati, OH 45246
\nTelephone: 1-800-228-1872
\nInternet: www.sterlingcapitalfunds.com*

* The Funds’ Web site is not a part of this Prospectus.\n

The Funds’ annual and semi-annual reports, the Funds’ SAI, and other information about the Funds are available from the EDGAR Database on the SEC’s Internet site at www.sec.gov. You may obtain copies of this information, after paying a duplication fee, by e-mailing a request to publicinfo@sec.gov.\n

Investment Company Act file no. 811-06719.\n

STERLING\nCAPITAL FUNDS

STATEMENT\nOF ADDITIONAL\nINFORMATION

October 19, 2026

This Statement of Additional Information (“SAI”)\nis not a Prospectus but should be read in conjunction with the Prospectus of each of the Sterling Capital Large Cap Value Focused Factor\nETF, Sterling Capital Small Cap Value Focused Factor ETF, Sterling Capital Small Cap Value ETF, Sterling Capital North Carolina Intermediate\nTax-Free ETF, and Sterling Capital Virginia Intermediate Tax-Free ETF each a series of Sterling Capital Funds (each, a “Fund”,\nand collectively, the “Funds”), dated October 19, 2026 (collectively, the “Prospectuses”), as supplemented from\ntime to time. This SAI is incorporated by reference in its entirety into the Prospectuses.

Each of the Sterling Capital Large Cap Value Focused\nFactor ETF, Sterling Capital Small Cap Value Focused Factor ETF, Sterling Capital Small Cap Value ETF, Sterling Capital North Carolina\nIntermediate Tax-Free ETF, and Sterling Capital Virginia Intermediate Tax-Free ETF is a newly organized fund created to acquire the assets\nand liabilities of Sterling Capital Behavioral Large Cap Value Equity Fund (the “Predecessor Behavioral Large Cap Value Equity Fund”),\nSterling Capital Behavioral Small Cap Value Equity Fund (the “Predecessor Behavioral Small Cap Value Equity Fund”), Sterling\nCapital Small Cap Value Fund (the “Predecessor Small Cap Value Fund”), Sterling Capital North Carolina Intermediate Tax-Free\nFund (the “Predecessor North Carolina Intermediate Tax-Free Fund”), and Sterling Capital Virginia Intermediate Tax-Free Fund\n(the “Predecessor Virginia Intermediate Tax-Free Fund” and, together with the Predecessor Behavioral Large Cap Value Equity\nFund, Predecessor Behavioral Small Cap Value Equity Fund, Predecessor Small Cap Value Fund, and the Predecessor North Carolina Intermediate\nTax-Free Fund, the “Predecessor Funds”), respectively, in separate reorganizations (each, a “Reorganization” and\ntogether, the “Reorganizations”) that have been approved by the Predecessor Funds’ Board of Trustees. Each Predecessor\nFund is considered the accounting and tax survivor of its respective Reorganization. Accordingly, the audited financial statements of\nthe Predecessor Funds for the fiscal year ended September 30, 2025, the notes thereto and the report of Cohen & Company, Ltd.\n(“Cohen & Co”) thereon, are incorporated by reference herein from the Predecessor Funds’ Form N-CSR filing.

Each of the Funds is a newly organized fund with\nno prior accounting, tax, or operating history.

Shares of the Funds are listed and traded on Cboe\nBZX Exchange, Inc.

Shares of the Funds will not be\noffered for sale until following the Reorganizations.

Copies of this SAI, the Prospectuses, the Annual\nReport, and the Semi-Annual Report may be obtained by writing Sterling Capital Funds c/o Ultimus Fund Solutions, LLC, P.O. Box 46707,\nCincinnati, OH 45246, or by telephoning toll free (888) 637-7798.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

\n FUNDS	\n TICKER
\n STERLING CAPITAL LARGE CAP VALUE FOCUSED FACTOR\n ETF	\n SCFL
\n STERLING CAPITAL SMALL CAP VALUE FOCUSED FACTOR\n ETF	\n SCFS
\n STERLING CAPITAL SMALL CAP VALUE ETF	\n SCSV
\n STERLING CAPITAL NORTH CAROLINA INTERMEDIATE\n TAX-FREE ETF	\n SCNC
\n STERLING CAPITAL VIRGINIA INTERMEDIATE TAX-FREE\n ETF	\n SCVA

TABLE\nOF CONTENTS

	Page
STERLING CAPITAL FUNDS	4
EXCHANGE LISTING AND TRADING	4
INVESTMENT OBJECTIVES AND POLICIES	5
ADDITIONAL INFORMATION ON PORTFOLIO INSTRUMENTS	5
FUNDAMENTAL INVESTMENT RESTRICTIONS	31
PORTFOLIO TURNOVER	34
DISCLOSURE OF PORTFOLIO HOLDINGS	34
CONTINUOUS OFFERING	35
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION	35
FUND DEPOSITS	36
PROCEDURES FOR CREATING CREATION UNITS	37
PLACEMENT OF CREATION ORDERS USING THE CLEARING PROCESS	37
PLACEMENT OF CREATION ORDERS OUTSIDE THE CLEARING PROCESS	38
ACCEPTANCE OF CREATION ORDERS	38
CREATION TRANSACTION FEE	38
REDEMPTION OF CREATION UNITS	39
REDEMPTION TRANSACTION FEE	40
PLACEMENT OF REDEMPTION ORDERS USING THE CLEARING PROCESS	40
PLACEMENT OF REDEMPTION ORDERS OUTSIDE THE CLEARING PROCESS	40
CUSTOM BASKETS	41
DISTRIBUTION OF SHARES	41
BOOK ENTRY ONLY SYSTEM	41
DETERMINATION OF NET ASSET VALUE	42
ADDITIONAL TAX INFORMATION	43
DIVIDENDS AND DISTRIBUTIONS	58
MANAGEMENT OF STERLING CAPITAL FUNDS	59
TRUSTEES AND OFFICERS	59
CODES OF ETHICS	64
INVESTMENT ADVISER	64
PORTFOLIO MANAGERS	65
PROXY VOTING POLICIES AND PROCEDURES	68
PORTFOLIO TRANSACTIONS	68
ADMINISTRATOR	69
SUB-ADMINISTRATOR	71
UNDERWRITER	71
EXPENSES	72
CUSTODIAN	72
TRANSFER AGENT AND FUND ACCOUNTING SERVICES	72
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	73

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

LEGAL COUNSEL	73
ADDITIONAL INFORMATION	73
ORGANIZATION AND DESCRIPTION OF SHARES	73
SHAREHOLDER AND TRUSTEE LIABILITY	73
MISCELLANEOUS	73
FINANCIAL STATEMENTS	74
APPENDIX A	A-1
APPENDIX B	B-1

The Prospectuses of the Funds and this SAI are not an offering\nof the securities herein described in any state in which such offering may not lawfully be made. No salesperson, dealer or other person\nis authorized to give any information or make any representation other than those contained in the Prospectuses of the Funds and this\nSAI.

STATEMENT\nOF ADDITIONAL\nINFORMATION

STERLING\nCAPITAL FUNDS

Sterling Capital Funds (the\n“Trust”) is an open-end management investment company. Each of the Funds (except the Sterling Capital North Carolina Intermediate\nTax-Free ETF and Sterling Capital Virginia Intermediate Tax-Free ETF) is “diversified,” as that term is defined in the Investment\nCompany Act of 1940, as amended (the “1940 Act”). Among other things, a diversified Fund must, with respect to 75% of its\ntotal assets, not invest more than 5% of its total assets in any one issuer and not acquire more than 10% of the outstanding voting securities\nof any single issuer.

Sterling Capital Funds consists\nof units of beneficial interest (“Shares”) offered to the public, each representing interests in separate investment portfolios,\ncertain of which are described in this SAI:

FUNDS

Sterling Capital Large Cap Value Focused Factor ETF\n(the “Large Cap Value Focused Factor ETF”)

Sterling Capital Small Cap Value Focused Factor ETF\n(the “Small Cap Value Focused Factor ETF”)

Sterling Capital Small Cap Value ETF (the “Small\nCap Value ETF” and together with the Large Cap Value Focused Factor ETF and the Small Cap Value Focused Factor ETF, the “Equity\nFunds”)

Sterling Capital North Carolina Intermediate Tax-Free\nETF (the “North Carolina Intermediate Tax-Free ETF” and together with the Virginia Intermediate Tax-Free ETF (as defined below),\nthe “Tax-Free Bond Funds”)

Sterling Capital Virginia Intermediate Tax-Free ETF\n(the “Virginia Intermediate Tax-Free ETF” and together with the Large Cap Value Focused Factor ETF, Small Cap Value Focused\nFactor ETF, Small Cap Value ETF, and North Carolina Intermediate Tax-Free ETF the “Funds”)

Individual shares of each Fund\nmay only be purchased and sold in the secondary market (i.e., on a national securities exchange)\nthrough a broker or dealer at market prices. Shares are or will be listed on Cboe BZX Exchange, Inc. (the “Exchange”) and\ntrade on the Exchange at market prices that may differ from the Shares’ NAV.

The Funds offer and issue Shares\nat their net asset value (“NAV”) only in aggregations of a specified number of Shares (each, a “Creation Unit”).\nThe Funds generally offer and issue Shares in exchange for a basket of securities (“Deposit Securities”) together with the\ndeposit of a specified cash payment (“Cash Component”). The Funds reserve the right to permit or require the substitution\nof a “cash in lieu” amount to be added to the Cash Component to replace any Deposit Security. Shares are also redeemable only\nin Creation Unit aggregations, primarily for a basket of Deposit Securities together with a Cash Component. A Creation Unit of the Funds\ngenerally consists of 10,000 Shares, though this may change from time to time. As a practical matter, only institutions or large investors\npurchase or redeem Creation Units (i.e., “Authorized Participants”). Except when aggregated\nin Creation Units, Shares are not redeemable securities.

Shares may be issued in advance\nof receipt of Deposit Securities subject to various conditions, including a requirement to maintain on deposit with the Fund cash at least\nequal to a specified percentage of the value of the missing Deposit Securities. The Funds may use such collateral at any time to purchase\nDeposit Securities. The Funds may impose a transaction fee for each creation or redemption. In all cases, such fees will be limited in\naccordance with the requirements of the Securities and Exchange Commission (“SEC”) applicable to management investment companies\noffering redeemable securities. As in the case of other publicly traded securities, brokers’ commissions on transactions in the\nsecondary market will be based on negotiated commission rates at customary levels.

Much of the information contained\nin this SAI expands on subjects discussed in the Prospectuses. Capitalized terms not defined herein are defined in the Prospectuses. No\ninvestment in Shares of a Fund should be made without first reading the applicable Prospectuses.

EXCHANGE\nLISTING AND\nTRADING

A discussion of exchange listing\nand trading matters associated with an investment in the Funds is contained in the “How to Buy and Sell Shares” section of\nthe Prospectus. The discussion below supplements, and should be read in conjunction with, such section of the Prospectus.

The shares of each Fund are\nlisted for trading, and trade throughout the day, on the Exchange. The shares trade on the Exchange at prices that may differ to some\ndegree from NAV. There can be no assurance that the requirements of the Exchange necessary to maintain the listing of shares of the Funds\nwill continue to be met.

The Exchange may consider the\nsuspension of trading and will commence delisting proceedings under any of the following circumstances: (i) if any of the continued listing\nrequirements are not continuously maintained, (ii) if following the initial twelve-month period after commencement of trading on the Exchange,\nthere are fewer than 50 beneficial holders of the shares for 30 or more consecutive trading days, (iii) if the Exchange becomes aware\nthat a Fund is no longer eligible to operate in reliance on Rule 6c-11 under the 1940 Act, (iv) if any statements or representations regarding\nthe description of the portfolio, limitations on portfolio holdings or the applicability of Exchange listing rules is not continuously\nmaintained, or (v) if such other event shall occur or condition exists that, in the opinion of the Exchange, makes further dealings on\nthe Exchange inadvisable. In addition, the Exchange will remove the shares of a Fund from listing and trading upon termination of the\nFund.

As in the case of other publicly-traded\nsecurities, when you buy or sell shares through a broker-dealer or other financial intermediary, you will be responsible for any fees\nor commissions charged by that broker-dealer or other financial intermediary.

The Funds reserve the right\nto conduct stock splits or reverse stock splits, which would impact the price of a Fund’s shares but have no effect on the net assets\nof the Fund or an investor’s equity interest in the Fund.

The base and trading currency\nof the Funds is the U.S. dollar. The base currency is the currency in which a Fund’s NAV per share is calculated and the trading\ncurrency is the currency in which shares of a Fund are listed and traded on the Exchange.

INVESTMENT\nOBJECTIVES AND\nPOLICIES

ADDITIONAL\nINFORMATION ON PORTFOLIO INSTRUMENTS

The Funds’ Prospectuses\ndiscuss the investment objectives and strategies of the Funds and the policies to be employed to achieve those objectives and strategies.\nThis section contains supplemental information concerning certain types of securities and other instruments in which the Funds may invest\n(to the extent not inconsistent with a Fund’s investment objective and strategy and the 1940 Act), the investment policies and portfolio\nstrategies that the Funds may utilize, and certain risks attendant to such investments, policies and strategies. Unless stated otherwise,\nall percentage limitations on investments set forth herein will apply at the time of the making of an investment and shall not be considered\nviolated unless an excess or deficiency occurs or exists immediately after and as a result of such investment. A Fund may invest in these\nsecurities and instruments directly, or indirectly through underlying investment companies and exchange-traded funds (“ETFs”)\nin which a Fund may invest.

Appendix A to this SAI identifies\nnationally recognized statistical ratings organizations (“NRSROs”) that may be used by Sterling Capital Management LLC (“Sterling\nCapital” or the “Adviser”) with regard to portfolio investments for the Funds and provides a description of relevant\nratings assigned by each such NRSRO. A rating by an NRSRO may be used only where the NRSRO is neither controlling, controlled by, nor\nunder common control with the issuer of, or any issuer, guarantor, or provider of credit support for, the instrument.

AUCTION RATE SECURITIES. Certain Funds may invest\nin securities issued by municipalities and governmental agencies and sold through an auction process.

Provided that the auction mechanism\nis successful, auction rate securities usually permit the holder to sell the securities in an auction at par value at specified intervals.\nThe dividend is reset by a “Dutch” auction in which bids are made by broker-dealers and other institutions for a certain amount\nof securities at a specified minimum yield. The dividend rate set by the auction is the lowest interest or dividend rate that covers all\nsecurities offered for sale.

While this process is designed\nto permit auction rate securities to be traded at par value, there is the risk that an auction will fail due to insufficient demand for\nthe securities. Since February 2008, numerous auctions have failed due to insufficient demand for securities. Failed auctions may adversely\nimpact the liquidity of auction rate securities investments. Although some issuers of auction rate securities are redeeming or are considering\nredeeming such securities, such issuers are not obligated to do so and, therefore, there is no guarantee that a liquid market will exist\nfor a Fund’s investments in auction rate securities at a time when the Fund wishes to dispose of such securities.

An issuer’s obligations\nunder its auction rate municipal securities are subject to provisions of bankruptcy, insolvency, and other laws affecting the rights and\nremedies of creditors, such as the Federal Bankruptcy Code, and laws, if any, which may be enacted by federal or state legislatures extending\nthe time for payment of principal or interest, or both, or imposing other constraints upon enforcement of such obligations or upon the\nability of municipalities to levy taxes. The power or ability of an issuer to meet its obligations for the payment of interest on and\nprincipal of its auction rate municipal securities may be materially, adversely affected by litigation or other conditions.

AUTHORIZED PARTICIPANT CONCENTRATION.\nOnly an Authorized Participant (as defined in the Prospectus) may engage in creation or redemption transactions directly with the Fund.\nThe Fund has a limited number of institutions that act as Authorized Participants. To the extent that these institutions exit the business\nor are unable to proceed with creation and/or redemption orders with respect to the Fund and no other Authorized Participant is able to\nstep forward to create or redeem Creation Units, Fund Shares may trade at a discount to NAV and possibly face trading halts and/or delisting.

EQUITY SECURITIES. Certain Funds\nmay invest in equity securities. Equity securities include common stocks, preferred stocks, convertible securities and warrants. Common\nstocks, which represent an ownership interest in a company, are probably the most recognized type of equity security. Equity securities\nhave historically outperformed most other securities, although their prices can be volatile in the short term. Market conditions and political,\neconomic and even company-specific news can cause significant changes in the price of a stock. Smaller companies (as measured by market\ncapitalization), sometimes called small-cap companies or small-cap stocks, may be especially sensitive to these factors. To the extent\na Fund invests in equity securities, that Fund’s Shares will fluctuate in value, and thus equity securities may be more suitable\nfor long-term investors who can bear the risk of short-term fluctuations.

Certain Funds may also invest\nin a company’s securities at the time of a company’s initial public offering (“IPO”). Companies involved in IPOs\nare often smaller and have a limited operating history, which involves a greater risk that the value of their securities will be impaired\nfollowing the IPO. In addition, market psychology prevailing at the time of an IPO can have a substantial and unpredictable effect on\nthe price of an IPO security, causing the price of a company’s securities to be particularly volatile at the time of its IPO and\nfor a period thereafter. As a result, a Fund’s Adviser might decide to sell an IPO security more quickly than it would otherwise,\nwhich may result in significant losses to the Fund.

COMMON STOCK. Common stock represents\nan equity (ownership) interest in a company, and usually possesses voting rights and earns dividends. Common stockholders are not creditors\nof the company, but rather, upon liquidation of the company are entitled to their pro rata share of the company’s assets after creditors\nand, if applicable, preferred stockholders are paid. Dividends on common stock are not fixed but are declared at the discretion of the\nissuer. Common stock generally represents the riskiest investment in a company. In addition, common stock generally has the greatest appreciation\nand depreciation potential because increases and decreases in earnings are usually reflected in a company’s stock price.

PREFERRED STOCK. Certain Funds\nmay invest in preferred stock. Preferred stock pays dividends at a specified rate and generally has preference over common stock in the\npayment of dividends and the liquidation of the issuer’s assets, but is junior to the debt securities of the issuer in those same\nrespects. Unlike interest payments on debt securities, dividends on preferred stock are generally payable at the discretion of the issuer’s\nboard of directors. Shareholders may suffer a loss of value if dividends are not paid. The market prices of preferred stocks are subject\nto changes in interest rates and are more sensitive to changes in the issuer’s creditworthiness than are the prices of debt securities.\nUnder normal circumstances, preferred stock does not carry voting rights.

CREDIT ENHANCEMENT. Certain\nFunds may purchase securities subject to credit enhancements. Credit enhancement consists of an arrangement in which a company agrees\nto pay amounts due on a fixed-income security if the issuer defaults. In some cases the company providing credit enhancement makes all\npayments directly to the security holders and receives reimbursement from the issuer. The credit enhancer has greater financial resources\nand liquidity than the issuer. However, there can be no assurance that the company supplying the credit enhancement can meet all its obligations\nunder these arrangements.

Common types of credit enhancement\ninclude guarantees, letters of credit, bond insurance and surety bonds. Credit enhancement also includes arrangements where securities\nor other liquid assets secure payment of a fixed-income security. If a default occurs, these assets may be sold and the proceeds paid\nto the security’s holder. Either form of credit enhancement reduces credit risks by providing another source of payment for a fixed-income\nsecurity.

ZERO COUPON SECURITIES. Certain\nFunds may purchase zero coupon securities. Zero coupon securities do not pay interest or principal until final maturity unlike debt securities\nthat provide periodic payments of interest (referred to as a coupon payment). Investors buy zero coupon securities at a price below the\namount payable at maturity. The difference between the purchase price and the amount paid at maturity represents interest on the zero\ncoupon security. Investors must wait until maturity to receive interest and principal, which increases the interest rate and credit risks\nof a zero coupon security. Even though such securities do not pay current interest in cash, a Fund nonetheless is required to accrue interest\nincome on these investments and to distribute the interest income on a current basis. Thus, a Fund could be required to liquidate investments,\nincluding at times when it is not advantageous to do so, in order to satisfy its distribution requirements. There are many forms of zero\ncoupon securities. Some are issued as a discount and are referred to as zero coupon or capital appreciation bonds. Others are created\nfrom interest-bearing bonds by separating the right to receive the bond’s coupon payments from the right to receive the bond’s\nprincipal due at maturity, a process known as coupon stripping. In addition, some securities give the issuer the option to deliver additional\nsecurities in place of cash interest payments, thereby increasing the amount payable at maturity. These are referred to as pay-in-kind\nor PIK securities. Certain Funds may invest in zero coupon U.S. Government Securities.

INSURANCE CONTRACTS. Certain\nFunds may purchase insurance contracts. Insurance contracts include guaranteed investment contracts, funding agreements and annuities.\nThe Funds treat these contracts as fixed-income securities.

Certain Funds may make limited\ninvestments in funding agreements issued by highly rated U.S. insurance companies. Under these agreements, the Funds make cash contributions\nto a deposit fund of the insurance company’s general account. The insurance company then credits interest to the Fund on a monthly\nor quarterly basis, which is based on an index (such as the U.S. Secured Overnight Financing Rate (“SOFR”) or another reference\nrate).

SHORT-TERM MONEY MARKET INSTRUMENTS.\nThe Funds may invest in U.S. short-term money market instruments. Short-term money market instruments include short-term fixed or variable\nrate certificates of deposit, time deposits with a maturity generally no greater than 180 days, bankers’ acceptances, commercial\npaper rated A-1 or A-2 by S&P or Prime-1 or Prime-2 by Moody’s (or paper of comparable quality as determined by the Adviser)\nor in similar other money market securities, and repurchase agreements. Time deposits are non-negotiable deposits with a banking institution\nthat earn a specified interest rate over a given period.

BANKERS’ ACCEPTANCES AND\nCERTIFICATES OF DEPOSIT. Certain Funds may invest in bankers’ acceptances, certificates of deposit, and demand and time deposits.\nThe Funds may also make interest-bearing savings deposits in commercial and savings banks in amounts not in excess of 5% of their respective\ntotal assets. Bankers’ acceptances are negotiable drafts or bills of exchange typically drawn by an importer or exporter to pay\nfor specific merchandise, which are “accepted” by a bank, meaning, in effect, that the bank unconditionally agrees to pay\nthe face value of the instrument on maturity. Certificates of deposit are negotiable certificates issued against funds deposited in a\ncommercial bank or a savings and loan association for a definite period of time and earning a specified return.

Bankers’ acceptances will\nbe those guaranteed by domestic and foreign banks, if at the time of investment such banks have capital, surplus, and undivided profits\nin excess of $100,000,000 (as of the date of their most recently published financial statements). Certificates of deposit and demand and\ntime deposits will be those of domestic and foreign banks and savings and loan associations, if (a) at the time of investment they have\ncapital, surplus, and undivided profits in excess of $100,000,000 (as of the date of their most recently published financial statements)\nor (b) the principal amount of the instrument is insured in full by the Federal Deposit Insurance Corporation (“FDIC”).

COMMERCIAL PAPER. Each Fund\nmay invest in commercial paper. Commercial paper consists of unsecured promissory notes issued by corporations. Issues of commercial paper\nnormally have maturities of less than nine months and fixed rates of return. Tax-exempt commercial paper is commercial paper of a tax-exempt\nissuer with a maturity of less than nine months.

Commercial paper purchasable\nby each Fund includes “Section 4(a)(2) paper,” a term that includes debt obligations issued in reliance on the “private\nplacement” exemption from registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”).\nSection 4(a)(2) paper is restricted as to disposition under the Federal securities laws, and is frequently sold (and resold) to institutional\ninvestors such as the Fund through or with the assistance of investment dealers who make a market in the Section 4(a)(2) paper, thereby\nproviding liquidity. Certain transactions in Section 4(a)(2) paper may qualify for the registration exemption provided in Rule 144A under\nthe 1933 Act.

Commercial paper is generally\nconsidered to be short-term unsecured debt of corporations. Like all fixed income securities, commercial paper prices are susceptible\nto fluctuations in interest rates. If interest rates rise, commercial paper prices will decline and vice versa. However, the short-term\nnature of a commercial paper investment generally makes it less susceptible to volatility than many other fixed income securities because\ninterest rate risk typically increases as maturity lengths increase. Commercial paper tends to yield smaller returns than longer term\ncorporate debt because securities with shorter maturities typically have lower effective yields than those with longer maturities.

VARIABLE AMOUNT MASTER DEMAND\nNOTES. Variable amount master demand notes, in which certain Funds may invest, are unsecured demand notes that permit the indebtedness\nthereunder to vary and provide for periodic adjustments in the interest rate according to the terms of the instrument. They are also referred\nto as variable rate demand notes. Because these notes are direct lending arrangements between the Fund and the issuer, they are not normally\ntraded. Although there may be no secondary market in the notes, the Funds may demand payment of principal and accrued interest at any\ntime or during specified periods not exceeding one year, depending upon the instrument involved, and may resell the note at any time to\na third party. The absence of such an active secondary market, however, could make it difficult for a Fund to dispose of a variable amount\nmaster demand note if the issuer defaulted on its payment obligations or during periods when the Fund is not entitled to exercise their\ndemand rights, and a Fund could, for this or other reasons, suffer a loss to the extent of the default. While the notes are not typically\nrated by credit rating agencies, issuers of variable amount master demand notes must satisfy the credit criteria used by a Fund’s\nAdviser for commercial paper. A Fund’s Adviser will consider the earning power, cash flow, and other liquidity ratios of the issuers\nof such notes and will continuously monitor their financial status and ability to meet payment on demand. Where necessary to ensure that\na note is of “high quality,” a Fund will require that the issuer’s obligation to pay the principal of the note be backed\nby an unconditional bank letter or line of credit, guarantee or commitment to lend. In determining dollar-weighted average portfolio maturity,\na variable amount master demand note will be deemed to have a

maturity equal to the period of time remaining until\nthe principal amount can be recovered from the issuer through demand or, if longer, the period of time remaining until the next adjustment\nof the interest rate.

FOREIGN INVESTMENT. Certain\nFunds may invest in certain obligations or securities of foreign issuers. The Funds may invest in foreign commercial paper, including\nCanadian Commercial Paper, which is commercial paper issued by a Canadian corporation or a Canadian counterpart of a U.S. corporation,\nand European commercial paper, which is U.S. dollar denominated commercial paper of an issuer located in Europe. The Funds may also invest\nin Canadian Time Deposits (“CTDs”) which are U.S. dollar denominated certificates of deposit issued by Canadian offices of\nmajor Canadian Banks. The Funds may invest in stocks, bonds and other obligations issued by foreign companies, foreign governments, and\nsupranational entities that trade on U.S. exchanges.

Certain Funds may invest in\nsecurities issued by foreign branches of U.S. banks, foreign banks, or other foreign issuers, including American Depositary Receipts (“ADRs”),\nEuropean Depository Receipts (“EDRs”), Global Depository Receipts (“GDRs”) and securities purchased on foreign\nsecurities exchanges.

ADRs typically are issued by\nan American bank or trust company and evidence ownership of underlying securities issued by a foreign corporation. EDRs, which are sometimes\nreferred to as Continental Depositary Receipts, are receipts issued in Europe, typically by foreign banks and trust companies, that evidence\nownership of either foreign or domestic underlying securities. GDRs are depository receipts structured like global debt issues to facilitate\ntrading on an international basis. ADRs, EDRs and GDRs may be issued as sponsored or unsponsored programs. In sponsored programs, an issuer\nhas made arrangements to have its securities trade in the form of ADRs, EDRs or GDRs. Unsponsored ADR, EDR and GDR programs are organized\nindependently and without the cooperation of the issuer of the underlying securities. As a result, although regulatory requirements with\nrespect to sponsored and unsponsored programs are generally similar, available information concerning the issuers may not be as current\nfor unsponsored ADRs, EDRs and GDRs, and the prices of unsponsored ADRs, EDRs and GDRs may be more volatile than if such instruments were\nsponsored by the issuer.

Investing in foreign securities\ninvolves considerations not typically associated with investing in securities of companies organized and operated in the United States.\nBecause foreign securities generally are denominated and pay dividends or interest in foreign currencies, the value of a Fund that invests\nin foreign securities as measured in U.S. dollars will be affected favorably or unfavorably by changes in currency exchange rates. A Fund’s\ninvestments in foreign securities may also be adversely affected by changes in foreign political or social conditions, diplomatic relations,\nmilitary conflicts, confiscatory taxation, expropriation, limitation on the removal of funds or assets, or imposition of (or change in)\nexchange control regulations and the adoption of other foreign governmental restrictions. In addition, changes in government administrations\nor economic or monetary policies in the U.S. or abroad could result in appreciation or depreciation of portfolio securities and could\nfavorably or adversely affect a Fund’s operations. A Fund’s income or gains from investments in foreign securities may be\nsubject to foreign taxes, which reduce the Fund’s return on those securities. Special tax considerations apply to foreign securities.

Additional risks include less\npublicly available information, the risk that companies may not be subject to the accounting, auditing and financial reporting standards\nand requirements of U.S. companies, the risk that foreign securities markets may have less volume and therefore many securities traded\nin these markets may be less liquid and their prices more volatile than U.S. securities, the risk that custodian and brokerage costs may\nbe higher, the risk of future adverse political and economic developments, possible seizure, currency blockage, nationalization of foreign\ninvestments and the risk of less stringent disclosure standards. For example, the Public Company Accounting Oversight Board, which regulates\nauditors of U.S. public companies, is unable to inspect audit work papers in certain non-U.S. countries. Therefore, their financial reports\nmay present an incomplete, untimely or misleading picture of a non-U.S. issuer, as compared to the financial reports of U.S. companies.\nInvestors in non-U.S. countries often have limited rights and few practical remedies to pursue investor claims, including class actions\nor fraud claims, and the ability of the SEC, the U.S. Department of Justice and other authorities to bring and enforce actions against\nnon-U.S. issuers and non-U.S. persons is limited. Foreign issuers of securities or obligations are often subject to accounting treatment\nand engage in business practices different from those respecting domestic issuers of similar securities or obligations. Foreign branches\nof U.S. banks and foreign banks may be subject to less stringent reserve requirements than those applicable to domestic branches of U.S.\nbanks. Certain Funds will acquire such securities only when a Fund’s Adviser believes the benefits associated with such investments\noutweigh the risks.

EMERGING MARKETS. Certain Funds\nmay invest their assets in countries with emerging economies or securities markets. Political and economic structures in many of these\ncountries may be undergoing significant evolution and rapid development, and these countries may lack the social, political and economic\nstability characteristics of more developed countries. Some of these countries may have in the past failed to recognize private property\nrights and have at times nationalized or expropriated the assets of private companies. In addition, The Public Company Accounting Oversight\nBoard, which regulates auditors of U.S. public companies, is unable to inspect audit work papers in certain foreign countries. Investors\nin foreign countries often have limited rights and few practical remedies to pursue shareholder claims, including class actions or fraud\nclaims, and the ability of the SEC, the U.S. Department of Justice and other authorities to bring and enforce actions against foreign\nissuers or foreign persons is limited. As a result, the risks described above, including the risks of nationalization or expropriation\nof assets, may be heightened. In addition, unanticipated political or social developments may affect the value of investments in these\ncountries and the availability to the Fund of additional investments in emerging market countries. The small size and inexperience of\nthe securities markets in certain of these countries and the limited volume

of trading in securities in these countries may make\ninvestments in the countries less liquid and more volatile than investments in Japan or most Western European countries. There may be\nlittle financial or accounting information available with respect to issuers located in certain emerging market countries, and, as a result,\nit may be difficult to access the value or prospects of an investment in such issuers.

FOREIGN CURRENCY TRANSACTIONS.\nCertain Funds may use forward currency exchange contracts. Forward currency exchange contracts involve an obligation to exchange a specified\ncurrency for another at a future date at a rate set at the time of the contract. Forward currency exchange contracts do not eliminate\nfluctuations in the values of portfolio securities but rather allow a Fund to establish a rate of exchange for a future point in time.

To the extent a Fund invests\nin an emerging market, the resulting emerging market currency exposure will generally be maintained. With respect to any forward currency\nexchange contract, it will not generally be possible to match precisely the amount covered by the contract and the value of the securities\ninvolved due to the changes in the values of such securities resulting from market movements between the date the forward currency exchange\ncontract is entered into and the date it matures. In addition, while forward currency exchange contracts may offer protection from losses\nresulting from declines in the value of a particular foreign currency, they also may result in losses and moreover will limit potential\ngains which might result from increases in the value of such currency. The Fund will also incur costs in connection with forward currency\nexchange contracts and conversions of foreign currencies and U.S. dollars.

MASTER LIMITED PARTNERSHIPS.\nCertain Funds may invest in master limited partnerships (“MLPs”). A MLP generally is a publicly traded company organized\nas a limited partnership or limited liability company and treated as a partnership for U.S. federal income tax purposes. MLPs may derive\nincome and gains from, among other things, the exploration, development, mining or production, processing, refining, transportation (including\npipelines transporting gas, oil, or products thereof), or the marketing of any mineral or natural resources. MLPs generally have two classes\nof owners, the general partner and limited partners. The general partner of an MLP is typically owned by one or more of the following:\na major energy company, an investment fund, or the direct management of the MLP. The general partner may be structured as a private or\npublicly traded corporation or other entity. The general partner typically controls the operations and management of the MLP through an\nup to 2% equity interest in the MLP plus, in many cases, ownership of common units and subordinated units. Limited partners own the remainder\nof the partnership, through ownership of common units, and have a limited role in the partnership’s operations and management. MLP\nsecurities in which the Funds may invest can include, but are not limited to: (i) equity securities of MLPs, including common units, preferred\nunits or convertible subordinated units; (ii) debt securities of MLPs, including debt securities rated below investment grade; (iii) securities\nof MLP affiliates; (iv) securities of open-end funds, closed-end funds or ETFs that invest primarily in MLP securities; or (v) exchange-traded\nnotes whose returns are linked to the returns of MLPs or MLP indices. The risks of investing in an MLP are generally those inherent in\ninvesting in a partnership as opposed to a corporation. For example, state law governing partnerships is often less restrictive than state\nlaw governing corporations. Accordingly, there may be fewer protections afforded investors in an MLP than investors in a corporation.\nAdditional risks involved with investing in an MLP are risks associated with the specific industry or industries in which the partnership\ninvests.

INCOME TRUSTS. Certain Funds\nmay invest in income trusts. Income trusts are investment trusts that hold income-producing assets and distribute income generated by\nsuch assets to the “unitholders” of the trust, which are entitled to participate in the trust’s income and capital as\nits beneficiaries. Income trusts generally invest in assets that provide a return to the trust and its unitholders based on the cash flows\nof an underlying business. Such assets may include equity and debt instruments, royalty interests or real properties. The income trust\ncan receive interest, royalty or lease payments from an operating entity carrying on a business, as well as dividends and a return of\ncapital.

Income trusts also may include\nroyalty trusts, a particular type of income trust whose securities are listed on a stock exchange and which controls an underlying company\nwhose business relates to, without limitation, the acquisition, exploitation, production and sale of oil and natural gas. Investments\nin income trusts (including royalty trusts) are subject to operating risk based on the income trust’s underlying assets and their\nrespective businesses. Such risks may include lack of or limited operating histories. Income trusts are subject to interest rate risk\nand increases in interest rates offered by competing investments may diminish the value of trust units. Changes in the interest rate also\nmay affect the value of future distributions from the income trust’s underlying assets or the value of the underlying assets themselves.\nInterest rate risk is also present within the income trusts themselves because they often hold very long term capital assets, and much\nof the excess distributable income is derived from a maturity (or duration) mismatch between the life of the asset and the life of the\nfinancing associated with it. In an increasing interest rate environment, the income trust’s distributions to its unitholders may\ndecrease. Income trusts also may be subject to additional risk, including, without limitation, limited access to debt markets.

Income trusts do not guarantee\nminimum distributions or returns of capital to unitholders. The amount of distributions paid on a trust’s units will vary from time\nto time based on production levels, commodity prices, royalty rates and certain expenses, deductions and costs, as well as on the distribution\npayout ratio policy adopted. The reduction or elimination of distributions to unitholders may decrease the value of trust units. Income\ntrusts generally pay out to unitholders the majority of the cash flow that they receive from the production and sale of underlying assets.\nAs a result of distributing the bulk of their cash flow to unitholders, the ability of a trust to finance internal growth is limited.\nTherefore, income trusts typically grow through acquisition of additional assets, funded through the issuance of additional equity or,\nwhere the trust is able, additional debt. Because an income trust may make distributions to unitholders

in excess of its net income, unitholder equity may\ndecline over time.

The extent to which a Fund can\ninvest in a particular income trust – and in particular, such trusts that are treated as so-called “grantor trusts”\nfor federal income tax purposes -- may be limited by the Fund’s intention to qualify as a regulated investment company under the\nInternal Revenue Code of 1986, as amended (the “Code”) and may bear on the Fund’s ability to so qualify. See “Additional\nTax Information” below for more information about these and other special tax considerations that can arise in respect of the Fund’s\ninvestments in income trusts, including royalty trusts.

REPURCHASE AGREEMENTS. Securities\nheld by each of the Funds may be subject to repurchase agreements. Under the terms of a repurchase agreement, a Fund would acquire securities\nfrom member banks of the FDIC with capital, surplus, and undivided profits of not less than $100,000,000 (as of the date of their most\nrecently published financial statements) and from registered broker-dealers which Sterling Capital deems creditworthy under guidelines\napproved by the Board of Trustees, subject to the seller’s agreement to repurchase such securities at a mutually agreed-upon date\nand price. The repurchase price would generally equal the price paid by the Fund plus interest negotiated on the basis of current short-term\nrates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement will be\nrequired to provide collateral pursuant to the agreement valued at not less than the repurchase price (including accrued interest) and\nthe Adviser will monitor the collateral’s value to ensure that it equals or exceeds the repurchase price (including accrued interest).

If the seller were to default\non its repurchase obligation or become insolvent, a Fund holding such obligation would suffer a loss to the extent that the proceeds from\na sale of the underlying portfolio securities were less than the repurchase price under the agreement, or to the extent that the disposition\nof such securities held by the Fund were delayed by applicable statutory, regulatory or other resolution regimes. If the seller should\nbe involved in bankruptcy or insolvency proceedings, a Fund may incur delays and costs in selling the underlying security or may suffer\na loss of principal and interest if the Fund is treated as an unsecured creditor and required to return the underlying security to the\nseller’s estate. Repurchase agreements are considered to be loans by a Fund under the 1940 Act.

The SEC has finalized rules\nthat will require certain transactions involving U.S. Treasuries, including repurchase agreements, to be centrally cleared. Compliance\nwith these rules is expected to be required by the middle of 2027. Although the impact of these rules on the Funds is difficult to predict,\nthey may reduce the availability or increase the costs of such transactions and may adversely affect a Fund’s performance.

REVERSE REPURCHASE AGREEMENTS\nAND DOLLAR ROLL AGREEMENTS. Certain Funds may also enter into reverse repurchase agreements and dollar roll agreements in accordance with\napplicable investment restrictions. Pursuant to such reverse repurchase agreements, a Fund would sell certain of its securities to financial\ninstitutions such as banks and broker-dealers, and agree to repurchase them at a mutually agreed-upon date and price. A dollar roll agreement\nis analogous to a reverse repurchase agreement, with a Fund selling mortgage-backed securities for delivery in the current month and simultaneously\ncontracting to repurchase substantially similar (same type, coupon and maturity) securities on a specified future date. Compliance with\nRule 18f-4 under the 1940 Act may impact a Fund’s ability to enter into reverse repurchase agreements.

Reverse repurchase agreements\nand dollar roll agreements involve risks, such that the market value of securities to be purchased by the Fund may decline below the price\nat which it is obligated to repurchase the securities, or that the other party may default on its obligation, so that the Fund is delayed\nor prevented from completing the transaction.

The SEC has finalized rules\nthat will require certain transactions involving U.S. Treasuries, including reverse repurchase agreements, to be centrally cleared. Compliance\nwith these rules is expected to be required by the middle of 2027. Although the impact of these rules on the Funds is difficult to predict,\nthey may reduce the availability or increase the costs of such transactions and may adversely affect a Fund’s performance.

U.S. GOVERNMENT SECURITIES.\nThe Funds may invest in bills, notes and bonds issued or guaranteed by the United States Department of the Treasury (“U.S. Treasury”).\nSuch obligations are supported by the full faith and credit of the U.S. government. The Funds may invest in such securities and in other\nsecurities issued or guaranteed by the U.S. government, its agencies and instrumentalities. Such securities may include those which are\nsupported by the full faith and credit of the U.S. government, such as obligations of the Government National Mortgage Association and\nthe Export-Import Bank of the United States; others, such as those of the Federal National Mortgage Association (“Fannie Mae”),\nare supported by the right of the issuer to borrow from the U.S. Treasury; others which are supported by the discretionary authority of\nthe U.S. government to purchase the agency’s securities; and still others, such as those of the Federal Farm Credit Banks or the\nFederal Home Loan Mortgage Corporation (“Freddie Mac”), which are supported only by the credit of the instrumentality. No\nassurance can be given that the U.S. government would provide financial support to U.S. government-sponsored agencies and instrumentalities\nif it is not obligated to do so by law. A Fund will invest in the obligations of such agencies and instrumentalities only when the Adviser\nbelieves that the credit risk with respect thereto is minimal.

U.S. Government Securities may\ninclude mortgage-backed pass-through securities. Interest and principal payments (including prepayments) on the mortgages underlying such\nsecurities are passed through to the holders of the security. Prepayments occur when

the borrower under an individual mortgage prepays\nthe remaining principal before the mortgage’s scheduled maturity date. As a result of the pass-through of prepayments of principal\non the underlying securities, mortgage-backed pass-through securities are often subject to more rapid prepayments of principal than their\nstated maturity would indicate. Because the prepayment characteristics of the underlying mortgages vary, it is not possible to predict\naccurately the realized yield or average life of a particular issue of pass-through certificates. Prepayments are important because of\ntheir effect on the yield and price of the securities. During periods of declining interest rates, such prepayments can be expected to\naccelerate, and the Fund would be required to reinvest the proceeds at the lower interest rates then available. In addition, prepayments\nof mortgages which underlie securities purchased at a premium may not have been fully amortized at the time the obligation is repaid.\nAs a result of these principal prepayment features, mortgage-backed pass-through securities are generally more volatile investments than\nother U.S. Government Securities.

On June 3, 2019, under the Federal\nHousing Finance Agency’s “Single Security Initiative,” Freddie Mac and Fannie Mae entered into a joint initiative to\ndevelop a common securitization platform for the issuance of a “uniform mortgage-backed security” or “UMBS,” in\nplace of their separate offerings of “to be announced” (TBA)-eligible mortgage-backed securities. The Single Security Initiative\nseeks to generally align the characteristics of Freddie Mac and Fannie Mae mortgage-backed securities. The effects it may have on the\nmarket for mortgage-backed securities are uncertain and the issuance of UMBS may not achieve the intended results and may have unanticipated\nor adverse effects on the market for mortgage-backed securities.

Certain Funds may also invest\nin zero coupon U.S. Government Securities. These securities tend to be more volatile than other types of U.S. Government Securities. For\na discussion of zero coupon securities, please see “ZERO COUPON SECURITIES” above.

The Tax-Free Bond Funds may\ninvest in U.S. Government Securities in connection with the purchase of taxable obligations (as described below).

SWAPS. Certain Funds may enter\ninto swap transactions. Swap transactions may include, but are not limited to, interest rate, currency, credit default and index credit\ndefault, securities index, basket, specific security and commodity swaps, interest rate caps, floors and collars and options on interest\nrate swaps (collectively defined as “swap transactions”). Certain Funds may enter into swap transactions for any legal purpose\nconsistent with the respective Fund’s investment objective and policies, such as for the purpose of attempting: to obtain or preserve\na particular return or spread at a lower cost than obtaining that return or spread through purchases and/or sales of instruments in cash\nmarkets, to protect against currency fluctuations, to protect against any increase in the price of securities a Fund anticipates purchasing\nat a later date, or to gain exposure to certain markets in a potentially more economical way. Each Tax-Free Bond Fund will not sell interest\nrate caps, floors or collars if such Fund does not own securities with coupons which provide the interest that the Fund may be required\nto pay.

Swap agreements are two-party\ncontracts entered into primarily by institutional counterparties for periods typically ranging from a few weeks to several years. In a\nstandard swap transaction, two parties agree to exchange the returns (or differentials in rates of return) that would be earned or realized\non specified notional investments or instruments. The gross returns to be exchanged or “swapped” between the parties are calculated\nby reference to a “notional amount,” i.e., the return on or increase in value of a\nparticular dollar amount invested at a particular interest rate, in a particular foreign currency or commodity, or in a “basket”\nof securities representing a particular index. The purchaser of an interest rate cap or floor, upon payment of a fee, has the right to\nreceive payments (and the seller of the cap or floor is obligated to make payments) to the extent a specified interest rate exceeds (in\nthe case of a cap) or is less than (in the case of a floor) a specified level over a specified period of time or at specified dates. The\npurchaser of an interest rate collar, upon payment of a fee, has the right to receive payments (and the seller of the collar is obligated\nto make payments) to the extent that a specified interest rate falls outside an agreed upon range over a specified period of time or at\nspecified dates. The purchaser of an option on an interest rate swap (known as a “swaption”), upon payment of a fee (either\nat the time of purchase or in the form of higher payments or lower receipts within an interest rate swap transaction) has the right, but\nnot the obligation, to initiate a new swap transaction of a pre-specified notional amount with pre-specified terms with the seller of\nthe option as the counterparty.

The “notional amount”\nof a swap transaction is the agreed upon basis for calculating the payments that the parties have agreed to exchange. For example, one\nswap counterparty may agree to pay a floating rate of interest (e.g., SOFR) calculated based on\na $10 million notional amount on a quarterly basis in exchange for receipt of payments calculated based on the same notional amount and\na fixed rate of interest on a semi-annual basis. In the event a Fund is obligated to make payments more frequently than it receives payments\nfrom the other party, it will incur incremental credit exposure to that swap counterparty. This risk may be mitigated somewhat by the\nuse of swap agreements which call for a single net payment to be made by the party with the larger payment obligation when the obligations\nof the parties fall due on the same date. Under most swap agreements entered into by a Fund, payments by the parties will be exchanged\non a “net basis”, and a Fund will receive or pay, as the case may be, only the net amount of the two payments.

The amount of a Fund’s\npotential gain or loss on any swap transaction is not subject to any fixed limit. Derivative transactions may be more volatile than many\nother types of instruments.

The use of swap transactions\ninvolves investment techniques and risks that are different from those associated with portfolio security transactions. If a Fund’s\nAdviser is incorrect in its forecasts of market values, interest rates, and other applicable factors, the

investment performance of the Fund may be less favorable\nthan if these techniques had not been used. These instruments are typically not traded on exchanges. Accordingly, there is a risk that\nthe other party to certain of these instruments will not perform its obligations to a Fund or that a Fund may be unable to enter into\noffsetting positions to terminate its exposure or liquidate its position under certain of these instruments when it wishes to do so. Such\noccurrences could result in losses to a Fund.

The Adviser will, however, consider such risks and\nwill enter into swap and other derivatives transactions only when it believes that the risks are not unreasonable.

The Funds will not enter into\nany swap transaction unless the counterparty to the transaction is deemed creditworthy by the Fund’s Adviser. If a counterparty\ndefaults, a Fund may have contractual remedies pursuant to the agreements related to the transaction, but there is no assurance that a\nFund will succeed in enforcing contractual remedies.

The liquidity of swap transactions\nwill be determined in accordance with guidelines established by the Adviser and approved by the Board of Trustees which are based on various\nfactors, including (1) contractual rights of the Funds to terminate transactions within seven days, (2) the availability of dealer quotations,\n(3) the estimated transaction volume for the instrument, (4) the number of dealers and end users for the instrument in the marketplace\nand the level of market making by dealers in the type of instrument, (5) the nature of the instrument (including any right of a party\nto terminate it on demand) and (6) the nature of the marketplace for trades (including the ability to terminate, assign or offset a Fund’s\nrights and obligations relating to the instrument). Such determination will govern whether the instrument will be deemed within the applicable\nliquidity restriction on investments that are not readily marketable.

During the term of a swap, cap,\nfloor or collar, changes in the value of the instrument are recognized as unrealized gains or losses by marking to market to reflect the\nmarket value of the instrument. When the instrument is terminated, a Fund will record a realized gain or loss equal to the difference,\nif any, between the proceeds from (or cost of) the closing transaction and a Fund’s basis in the contract.

Transactions in some types of\nswaps (including certain interest rate swaps and credit default swaps) are required to be, or are capable of being, centrally cleared.\nIn a transaction involving those swaps (“cleared derivatives”), a Fund’s counterparty is a clearing house rather than\na bank or broker. Since the Funds are not members of clearing houses and only members of a clearing house (“clearing members”)\ncan participate directly in the clearing house, the Funds hold cleared derivatives through accounts at clearing members. In cleared derivatives\npositions, the Funds make payments (including margin payments) to and receive payments from a clearing house through their accounts at\nclearing members. Clearing members guarantee performance of their clients’ obligations to the clearing house.

In some ways, cleared derivative\narrangements are less favorable to funds than bilateral arrangements, for example, by requiring that funds provide more margin for their\ncleared derivatives positions. Also, as a general matter, in contrast to a bilateral derivatives position, following a period of notice\nto a Fund, a clearing member at any time can require termination of an existing cleared derivatives position or an increase in the margin\nrequired at the outset of a transaction. Clearing houses also have broad rights to increase the margin required for existing positions\nor to terminate those positions at any time. Any increase in margin requirements or termination of existing cleared derivatives positions\nby the clearing member or the clearing house could interfere with the ability of a Fund to pursue its investment strategy. Further, any\nincrease in margin requirements by a clearing member could expose a Fund to greater credit risk to its clearing member because margin\nfor cleared derivatives positions in excess of a clearing house’s margin requirements typically is held by the clearing member.\nAlso, a Fund is subject to risk if it enters into a derivatives transaction that is required to be cleared (or is expected to be cleared),\nand no clearing member is willing or able to clear the transaction on the Fund’s behalf. In those cases, the position might have\nto be terminated, and the Fund could lose some or all of the benefit of the position, including loss of an increase in the value of the\nposition and loss of hedging protection. In addition, the documentation governing the relationship between the Funds and clearing members\nis drafted by the clearing members and generally is less favorable to the Funds than the documentation for typical bilateral derivatives.\nFor example, documentation relating to cleared derivatives generally includes a one-way indemnity by the Funds in favor of the clearing\nmember for losses the clearing member incurs as the Funds’ clearing member. Also, such documentation typically does not provide\nthe Funds any remedies if the clearing member defaults or becomes insolvent. While futures contracts entail similar risks, the risks may\nbe more pronounced for cleared derivatives due to their more limited liquidity and market history.

Some types of cleared derivatives\nare required to be (or are capable of being) executed on an exchange or on a swap execution facility. A swap execution facility is a trading\nplatform where multiple market participants can execute derivatives by accepting bids and offers made by multiple other participants in\nthe platform. While the execution of transactions on a swap execution facility can increase transparency and liquidity in the cleared\nderivatives market, trading on a swap execution facility can also create additional costs and risks for the Funds. For example, swap execution\nfacilities typically charge fees, and if a Fund executes derivatives on a swap execution facility through a broker intermediary, the intermediary\nmay impose fees as well. Also, a Fund may be required to indemnify a swap execution facility, or a broker intermediary who executes cleared\nderivatives on a swap execution facility on the Fund’s behalf, against any losses or costs that may be incurred as a result of the\nFund’s transactions on the swap execution facility.

The federal income tax treatment with respect to\nswap transactions may impose limitations on the extent to which a Fund may engage in such transactions.

CREDIT DEFAULT SWAPS (“CDSs”).\nCertain Funds may enter into CDSs. As described above, swap agreements are two party contracts entered into primarily by institutional\ninvestors for periods ranging from a few weeks to more than one year. In the case of CDSs, the contract gives one party (the “buyer”)\nthe right to recoup the economic value of a decline in the value of debt securities of the reference issuer if a credit event (e.g.,\na downgrade or default) occurs. In a physically-settled CDS, this value is obtained by delivering a debt security of the reference issuer\nin return for a previously agreed upon payment from the other party (the “seller”), frequently, the par value of the debt\nsecurity. CDSs may require initial premium (discount) payments as well as periodic payments (receipts) from the buyer to the seller. If\nthe Fund is the seller of a CDS contract, the Fund would be required to pay the par (or other agreed upon) value of a referenced debt\nobligation to the buyer in the event of a default or other credit event by the reference issuer, such as a U.S. or foreign corporate issuer,\nwith respect to such debt obligation. In return, the Fund would receive from the buyer a periodic stream of payments over the term of\nthe contract provided that no event of default has occurred. If no default occurs, a Fund would keep the stream of payments and would\nhave no payment obligations. As the seller, a Fund would be subject to investment exposure on the notional amount of the swap.

REAL ESTATE INVESTMENT TRUSTS\n(“REITs”). Certain Funds may invest in equity interests or debt obligations issued by REITs. REITs are pooled investment vehicles\nwhich invest primarily in income producing real estate or real estate related loans or interest. REITs are generally classified as equity\nREITs, mortgage REITs or a combination of equity and mortgage REITs. Equity REITs invest the majority of their assets directly in real\nproperty and derive income primarily from the collection of rents. Equity REITs can also realize capital gains by selling property that\nhas appreciated in value. Mortgage REITs invest the majority of their assets in real estate mortgages and derive income from the collection\nof interest payments. Similar to investment companies, REITs are not taxed on income distributed to shareholders provided they comply\nwith several requirements of the Code. A Fund will indirectly bear its proportionate share of expenses incurred by REITs in which a Fund\ninvests in addition to the expenses incurred directly by a Fund.

Investing in REITs involves\ncertain unique risks in addition to those risks associated with investing in the real estate industry in general. Equity REITs may be\naffected by changes in the value of the underlying property owned by the REITs, while mortgage REITs may be affected by the quality of\nany credit extended. REITs are dependent upon management skills and on cash flows, are not diversified, and are subject to default by\nborrowers and self-liquidation. REITs are also subject to the possibilities of failing to qualify for the favorable tax treatment under\nthe Code and failing to maintain their exemption from registration under the 1940 Act.

REITs (especially mortgage REITs)\nare also subject to interest rate risks. When interest rates decline, the value of a REIT’s investment in fixed rate obligations\ncan be expected to rise. Conversely, when interest rates rise, the value of a REIT’s investment in fixed rate obligations can be\nexpected to decline. In contrast, as interest rates on adjustable rate mortgage loans are reset periodically, yields on a REIT’s\ninvestment in such loans will gradually align themselves to fluctuate less dramatically in response to interest rate fluctuations than\nwould investments in fixed rate obligations.

Investments in REITs also involve risks associated\nwith an issuer with limited financial resources as well as infrequent or limited trading risk.

TRUST PREFERRED SECURITIES.\nCertain Funds may purchase trust preferred securities. Trust preferred securities are issued by a special purpose trust subsidiary backed\nby subordinated debt of the corporate parent. Trust preferred securities currently permit the issuing entity to treat the interest payments\nas a tax-deductible cost. These securities, which have no voting rights, have a final stated maturity date and a fixed schedule for periodic\npayments. In addition, these securities have provisions which afford preference over common and preferred stock upon liquidation, although\nthe securities are subordinated to other, more senior debt securities of the same issuer. The issuers of these securities have the right\nto defer interest payments for a period of up to five years, although interest continues to accrue cumulatively. The deferral of payments\nmay not exceed the stated maturity date of the securities themselves. The non-payment of deferred interest at the end of the permissible\nperiod will be treated as an event of default. At the present time, the Internal Revenue Service (“IRS”) generally treats\ncapital securities as debt.

SUPRANATIONAL ORGANIZATIONAL\nOBLIGATIONS. Certain Funds may purchase debt securities of supranational organizations such as the European Coal and Steel Community,\nthe European Economic Community and the World Bank, which are chartered to promote economic development.

INVESTMENT GRADE DEBT OBLIGATIONS.\nCertain Funds may invest in “investment grade securities,” which are securities rated in the four highest rating categories\nof an NRSRO. Certain Funds may only invest in those investment grade securities rated in the three highest rating categories of an NRSRO.\nIt should be noted that debt obligations rated in the lowest of the top four ratings (i.e., “Baa”\nby Moody’s or “BBB” by S&P), are considered to have some speculative characteristics and are more sensitive to economic\nchange than higher rated securities. The Equity Funds may each invest up to 20% of their total net assets in such securities. An issuer\nundergoing reorganization or restructuring may issue to its security holders additional securities which may be different from the securities\nalready held by the security holder. The Funds may hold such additional securities even if they do not generally invest in such securities.

NON-INVESTMENT GRADE DEBT SECURITIES.\nCertain Funds may invest in debt securities rated below investment grade, also known as “high yield” or “junk bonds.”\nThese securities are regarded as predominantly speculative. Securities rated below investment grade generally provide a higher yield than\nhigher rated securities of similar maturity, but are subject to a greater degree of risk that the issuer may not be able to make principal\nand interest payments. Issuers of these securities may not be as strong financially as those issuing higher rated securities. Such high\nyield issuers may include smaller, less creditworthy companies or highly indebted firms.

The value of high yield securities\nmay fluctuate more than the value of higher rated securities, since high yield securities tend to reflect short-term corporate and market\ndevelopments to a greater extent than higher rated securities. Thus, periods of economic uncertainty and change can result in the increased\nvolatility of market prices of high yield bonds and of the Fund’s net asset value (“NAV”). Additional risks of high\nyield securities include limited liquidity and secondary market support. As a result, the prices of high yield securities may decline\nrapidly in the event that a significant number of holders decide to sell. Issuers of high yield securities also are more vulnerable to\nreal or perceived economic changes, political changes or adverse developments specific to the issuer. A projection of an economic downturn,\nfor example, could cause the price of these securities to decline because a recession could lessen the ability of a highly leveraged company\nto make principal and interest payments on its debt securities. In the event of a default, the Funds would experience a decline in the\nvalue of its investment. In addition, a long-term track record on bond default rates, such as that for investment grade corporate bonds,\ndoes not exist for the high yield market. It may be that future default rates on high-yield bonds will be more widespread and higher than\nin the past, especially during periods of deteriorating economic conditions.

The market prices of debt securities\ngenerally fluctuate with changes in interest rates so that these Funds’ NAVs can be expected to decrease as long-term interest rates\nrise and to increase as long-term rates fall. The market prices of high yield securities structured as zero coupon or pay-in-kind securities\nare generally affected to a greater extent by interest rate changes and tend to be more volatile than securities which pay interest periodically.

Credit quality in the high yield\nmarket can change suddenly and unexpectedly, and even recently-issued credit ratings may not fully reflect the actual risks posed by a\nparticular high yield security. Each of the Equity Funds will limit its investments in non-investment grade securities to 20% of its total\nnet assets. Subject to SEC restrictions, the Equity Funds may invest in such securities by investing in investment companies that primarily\ninvest in non-investment grade securities.

Consolidation in the financial\nservices industry has resulted in there being fewer market makers for high yield debt securities, which may result in further risk of\nilliquidity and volatility with respect to high yield debt securities held by a Fund, and this trend may continue in the future. Furthermore,\nhigh yield debt securities held by a Fund may not be registered under the 1933 Act, and, unless so registered, the Fund will not be able\nto sell such high yield debt securities except pursuant to an exemption from registration under the 1933 Act. This may further limit the\nFund’s ability to sell high yield debt securities or to obtain the desired price for such securities.

CUSTODY RECEIPTS. Certain Funds\nmay invest in custody receipts that represent debt securities. Custody receipts are derivative products which, in the aggregate, evidence\ndirect ownership in a pool of securities. Typically, a sponsor will deposit a pool of securities with a custodian in exchange for custody\nreceipts evidencing those securities. The sponsor will then generally sell those custody receipts in negotiated transactions at varying\nprices that are determined at the time of sale. Each custody receipt evidences the individual securities in the pool and the holder of\na custody receipt generally will have all the rights and privileges of owners of those securities. Each holder of a custody receipt will\nbe treated as directly purchasing its pro rata share of the securities in the pool for an amount equal to the amount that such holder\npaid for its custody receipt. If a custody receipt is sold, a holder will be treated as having directly disposed of its pro rata share\nof the securities evidenced by the custody receipt. Additionally, the holder of a custody receipt may withdraw the securities represented\nby a custody receipt subject to certain conditions.

Custody receipts are generally\nsubject to the same risks as those securities evidenced by the receipts which are corporate debt securities. Additionally, custody receipts\nmay also be less liquid than the underlying securities if the sponsor fails to maintain a trading market.

ASSET-BACKED AND RELATED SECURITIES.\nCertain Funds may invest in asset-backed securities. An asset-backed security is a fixed-income security that predominantly derives its\ncreditworthiness from cash flows relating to a pool of assets. There are a number of different types of asset-backed and related securities,\nincluding mortgage-backed securities, securities backed by other pools of collateral (such as automobile loans, student loans, sub-prime\nmortgages and credit card receives) and collateralized mortgage obligations and collateralized debt obligations, certain of which are\ndescribed in more detail below.

Mortgage-Backed\nSecurities. Mortgage-backed securities are asset-backed securities backed by pools of residential\nand commercial mortgages, which may include sub-prime mortgages. Mortgage-backed securities may be issued by agencies or instrumentalities\nof the U.S. government (including those whose securities are neither guaranteed nor insured by the U.S. government, such as Freddie Mac,\nFannie Mae, and Federal Home Loan Banks), foreign governments (or their agencies or instrumentalities), or non-governmental issuers. Interest\nand principal payments (including prepayments) on the mortgage loans underlying mortgage-backed securities pass through to the holders\nof the mortgage-backed securities. Mortgage-backed securities are subject to varying degrees of

credit risk, depending on whether they are issued\nby agencies or instrumentalities of the U.S. government (including those whose securities are neither guaranteed nor insured by the U.S.\ngovernment) or by non-governmental issuers. Securities issued by private organizations may not be readily marketable. When worldwide economic\nand liquidity conditions deteriorated in 2008, mortgage-backed securities became subject to greater illiquidity risk. These conditions\nmay occur again. Also, government actions and proposals affecting the terms of underlying home loans, changes in demand for products (e.g.,\nautomobiles) financed by those loans, and the inability of borrowers to refinance existing loans (e.g.,\nsub-prime mortgages), have had, and may continue to have, adverse valuation and liquidity effects on mortgage-backed securities. Although\nliquidity of mortgage-backed securities has improved, there can be no assurance that in the future the market for mortgage-backed securities\nwill continue to improve and become more liquid. In addition, mortgage-backed securities are subject to the risk of loss of principal\nif the obligors of the underlying obligations default in their payment obligations, and to certain other risks described in “Other\nAsset-Backed Securities” below. The risk of defaults associated with mortgage-backed securities is generally higher in the case\nof mortgage-backed investments that include sub-prime mortgages.

Other\nAsset-Backed Securities.\nSimilar to mortgage-backed securities, other types of asset-backed securities may be issued by agencies or instrumentalities of\nthe U.S. government (including those whose securities are neither guaranteed nor insured by the U.S. government), foreign governments\n(or their agencies or instrumentalities), or non-governmental issuers. These securities include securities backed by pools of automobile\nloans, educational loans, home equity loans, and credit card receivables. The underlying pools of assets are securitized through the use\nof trusts and special purpose entities. These securities may be subject to risks associated with changes in interest rates and prepayment\nof underlying obligations similar to the risks of investment in mortgage-backed securities described immediately above. Similar to mortgage-backed\nsecurities, other asset-backed securities face illiquidity risk from worldwide economic and liquidity conditions as described above in\n“Mortgage-Backed Securities.” The risk of investing in asset-backed securities has increased because performance of the various\nsectors in which the assets underlying asset-backed securities are concentrated (e.g., auto loans,\nstudent loans, sub-prime mortgages, and credit card receivables) has become more highly correlated.

Collateralized\nMortgage Obligations (“CMOs”). Certain Funds may also invest in CMOs. CMOs are mortgage-related securities which are\nstructured pools of mortgage pass-through certificates or mortgage loans. CMOs are issued with a number of classes or series which have\nvarying risk characteristics, payment structures, and maturity dates, and which may represent interests in some or all of the interest\nor principal on the underlying collateral or a combination thereof. CMOs of different classes are generally retired in sequence as the\nunderlying mortgage loans in the mortgage pool are repaid. In the event of sufficient early prepayments on such mortgages, the class or\nseries of CMO first to mature generally will be retired prior to its maturity. Thus, the early retirement of a particular class or series\nof CMO held by a Fund would have the same effect as the prepayment of mortgages underlying a mortgage-backed pass-through security.

CMOs may include stripped mortgage-backed\nsecurities (“SMBSs”). Such securities are derivative multi-class mortgage securities issued by agencies or instrumentalities\nof the United States Government, or by private originators of, or investors in, mortgage loans, including savings and loan associations,\nmortgage banks, commercial banks, investment banks and special purpose subsidiaries of the foregoing. SMBSs are usually structured with\ntwo classes that receive different proportions of the interest and principal distributions on a pool of mortgage assets. A common type\nof SMBS will have one class receiving all of the interest from the mortgage assets (the interest-only or “IO” class), while\nthe other class will receive all of the principal (the principal-only or “PO” class). The yield to maturity on an IO class\nis extremely sensitive to the rate of principal payments (including prepayments) on the related underlying mortgage assets, and a rapid\nrate of principal payments may have a material adverse effect on the securities’ yield to maturity. Generally, the value of the\nPO class is unusually volatile in response to changes in interest rates. If the underlying mortgage assets experience greater than anticipated\nprepayments of principal, the Fund may fail to fully recoup its initial investment in these securities even if the security is rated in\nthe highest rating category.

Although SMBSs are purchased\nand sold by institutional investors through several investment banking firms acting as brokers or dealers, these securities are a fairly\nrecent development. As a result, established trading markets may not have fully developed. SMBSs issued or guaranteed by the U.S. government\nand held by a Fund may be considered illiquid securities pursuant to guidelines established by the Board of Trustees.

Unless stated otherwise, each\nFund will limit its investment in CMOs to 25% of the value of its total assets.

Collateralized\nDebt Obligations\n(“CDOs”).\nCDOs are types of ABS that are backed solely by a pool of other debt securities. CDOs are typically issued in various classes with\nvarying priorities. The risks of an investment in a CDO depend largely on the type of the collateral securities and the class of the CDO\nin which a Fund invests. In addition to credit, interest rate, prepayment, default and other risks of ABS and fixed income securities,\nin general, CDOs are subject to additional risks, including the possibility that distributions from collateral securities will not be\nadequate to make interest or other payments, the quality of the collateral may decline in value or default, a Fund may invest in CDOs\nthat are subordinate to other classes, and the complex structure may produce disputes with the issuer or unexpected investment results.\nInvestments in CDOs may decrease in market value if they experience loan defaults or credit impairment, the impairment of a subordinate\ntranche or class of debt, or due to market anticipation of defaults and investor aversion to the securities as a class. The liquidity\nof ABS (particularly below investment grade ABS) may change over time. During periods of deteriorating economic conditions, such as recessions,\nor periods of rising unemployment, delinquencies and losses generally

increase, sometimes dramatically, with respect to\nsecuritizations involving loans, sales contracts, receivables and other obligations underlying asset-backed securities.

Collateralized\nLoan Obligations (“CLOs”). CLOs are financial instruments and a type of ABS that are typically collateralized by a\npool of loans, which may include, among others, senior secured loans, senior unsecured loans, and subordinate corporate loans, including\nloans that may be rated below investment grade or equivalent unrated loans, and packaged into securities that are sold to investors. These\ninstruments are a type of structured credit product, where the loans serve as the underlying assets. These loans are often made to companies\nwith below-investment-grade credit rating. The CLO typically is divided into tranches, based on risk and return profiles. “Senior\nTranches” have the first claim on cash flows and are therefore the safest, but offer lower returns. “Mezzanine Tranches”\ncarry moderate risk and offer higher returns. The “Equity Tranche” is the riskiest layer with the last claim on cash flows\nbut the highest potential returns. The risks of an investment in a CLO depend largely on the type of the collateral securities and the\nclass of the CLO in which a Fund invests. In addition to credit, interest rate, prepayment, default and other risks of ABS and fixed income\nsecurities, in general, CLOs are subject to additional risks, including the possibility that distributions from collateral securities\nwill not be adequate to make interest or other payments, the quality of the collateral may decline in value or default, a Fund may invest\nin CLOs that are subordinate to other classes, and the complex structure may produce disputes with the issuer or unexpected investment\nresults. CLOs are subject to the risks of substantial losses, including losses due to actual defaults by borrowers of the loans underlying\nthe collateralized loan obligations, which will be greater during periods of economic or financial stress. CLOs may also lose value due\nto collateral defaults and impairment of subordinate tranches, market anticipation of defaults, and investor aversion to collateralized\nloan obligation securities as a class. A Fund may invest in CLOs that hold loans of uncreditworthy borrowers or in subordinate tranches\nof a collateralized loan obligation, which may absorb losses from underlying borrower defaults before senior tranches. Investments in\nsuch collateralized loan obligations present a greater risk of loss.

Offerings\nof Certificates for Automobile Receivables (“CARs”). CARs are structured either\nas flow-through grantor trusts or as pay-through notes. CARs structured as flow-through instruments represent ownership interests in a\nfixed pool of receivables. CARs structured as pay-through notes are debt instruments supported by the cash flows from the underlying assets.\nCARs may also be structured as securities with fixed payment schedules which are generally issued in multiple-classes. Cash-flow from\nthe underlying receivables is directed first to paying interest and then to retiring principal via paying down the two respective classes\nof notes sequentially. Cash-flows on fixed-payment CARs are certain, while cash-flows on other types of CARs issues depend on the prepayment\nrate of the underlying automobile loans. Prepayments of automobile loans are triggered mainly by automobile sales and trade-ins. Many\npeople buy new cars every two or three years, leading to rising prepayment rates as a pool becomes more seasoned.

Certificates\nfor Amortizing\nRevolving Debt\n(“CARDs”).\nCARDs represent participation in a fixed pool of credit card accounts. CARDs pay “interest only” for a specified period.\nThe CARDs principal balance remains constant during this period, while any cardholder repayments or new borrowings flow to the issuer’s\nparticipation. Once the principal amortization phase begins, the balance declines with paydowns on the underlying portfolio. Cash flows\non CARDs are certain during the interest-only period. After this initial interest-only period, the cash flow will depend on how fast cardholders\nrepay their borrowings. Historically, monthly cardholder repayment rates have been relatively fast. As a consequence, CARDs amortize rapidly\nafter the end of the interest-only period. During this amortization period, the principal payments on CARDs depend specifically on the\nmethod for allocating cardholder repayments to investors. In many cases, the investor’s participation is based on the ratio of the\nCARDs’ balance to the total credit card portfolio balance. This ratio can be adjusted monthly or can be based on the balances at\nthe beginning of the amortization period. In some issues, investors are allocated most of the repayments, regardless of the CARDs’\nbalance. This method results in especially fast amortization.

Credit support for asset-backed\nsecurities may be based on the underlying assets or provided by a third party. Credit enhancement techniques include letters of credit,\ninsurance bonds, limited guarantees (which are generally provided by the issuer), senior-subordinated structures and over collateralization.\nAsset-backed securities purchased by a Fund will be subject to the same quality requirements as other securities purchased by the Fund.

For purposes of calculating Annual Fund Operating\nExpenses in the Prospectuses, structured products such as asset-backed securities are not included.

FIXED-INCOME SECURITIES. Each\nFund may invest in fixed-income securities. Fixed-income securities pay interest, dividends or distributions at a specified rate. The\nrate may be a fixed percentage of the principal or adjusted periodically. In addition, the issuer of a fixed-income security must repay\nthe principal amount of the security, normally within a specified time.

A security’s yield measures\nthe annual income earned on a security as a percentage of its price. A security’s yield will increase or decrease depending upon\nwhether it costs less (a discount) or more (a premium) than the principal amount. If the issuer may redeem the security before its scheduled\nmaturity, the price and yield on a discount or premium security may change based upon the probability of an early redemption. Securities\nwith higher risks generally have higher yields.

Further descriptions of certain types of fixed-income\nsecurities are provided elsewhere in this SAI.

MUNICIPAL OBLIGATIONS. Certain\nFunds may invest in municipal obligations. Municipal securities generally are fixed-income securities, and include debt obligations issued\nby governmental entities to obtain funds for various public purposes, including the construction of a wide range of public facilities,\nthe refunding of outstanding obligations, the payment of general operating expenses, and the extension of loans to public institutions\nand facilities. Municipal securities may be referred to, for example, as general obligation bonds, special revenue bonds, private activity\nbonds, tax-increment financing bonds, municipal mortgage-backed securities, municipal leases, municipal notes and variable rate demand\ninstruments or notes. General obligation bonds generally are supported by the issuer’s power to exact property or other taxes in\nsufficient amounts to pay principal and interest on the bonds; however, the issuer’s authority to impose additional taxes may be\nlimited by its charter or state law. Special revenue bonds are payable solely from specific revenues received by the issuer, such as specific\ntaxes, assessments, tolls, or fees, and bondholders may not collect from the municipality’s general taxes or revenues. These obligations\nare discussed further under “Tax-Exempt Obligations” below. Private activity bonds that are or were issued by or on behalf\nof public authorities to finance various privately-operated facilities are included within the term municipal obligations if the interest\npaid thereon is exempt from federal income tax. Tax-increment financing (TIF) bonds are payable from increases in taxes or other revenues\nattributable to projects within the TIF district. Municipal mortgage-backed securities are special revenue bonds the proceeds of which\nmay be used to provide mortgage loans for single-family homes or to finance multifamily housing, represent interests in pools of mortgages,\nwhich may have fixed or variable rates, and can have complicated financial structures. Municipal leases are leases entered into by municipalities\nfor equipment or facilities, and, in order to comply with state public financing laws, are typically subject to annual appropriation,\nmeaning that a municipality may end a lease, without penalty, by not providing for the lease payments in its annual budget. After the\nlease ends, the lessor can resell the equipment or facility, but may lose money on the sale. Securities may be supported by pools of municipal\nleases. The most common type of lease-backed securities are certificates of participation, but funds may also invest directly in individual\nleases. Lease obligations are discussed further under “Tax-Exempt Obligations” below. Municipal notes are short-term securities\nissued by municipalities to fund, for example, current operations and capital projects, and the issuers typically repay the notes at the\nend of their fiscal year, either with taxes, other revenues, or proceeds from newly issued notes or bonds. Further descriptions of other\ntypes of tax-exempt securities are provided elsewhere in this SAI.

Opinions relating to the validity\nof municipal obligations and to the exemption of interest thereon from federal income taxes are rendered by counsel to the issuers or\nbond counsel to the respective issuing authorities at the time of issuance. The Funds other than the Tax-Free Bond Funds do not expect\nto be eligible to pass through tax-exempt interest in the form of exempt-interest dividends to shareholders.

In some cases, municipal obligations\nare represented by custodial receipts evidencing rights to receive specific future interest payments, principal payments, or both, on\nthe underlying municipal securities held by the custodian. Under such arrangements, the holder of the custodial receipt has the option\nto tender the underlying municipal securities at its face value to the sponsor (usually a bank or broker dealer or other financial institution),\nwhich is paid periodic fees equal to the difference between the bond’s fixed coupon rate and the rate that would cause the bond,\ncoupled with the tender option, to trade at par on the date of a rate adjustment.

An issuer’s obligations\nunder its municipal obligations are subject to the provisions of bankruptcy, insolvency, and other laws affecting the rights and remedies\nof creditors, such as the federal bankruptcy code, and laws, if any, which may be enacted by federal or state legislatures extending the\ntime for payment of principal or interest, or both, or imposing other constraints upon enforcement of such obligations or upon the ability\nof municipalities to levy taxes. The power or ability of an issuer to meet its obligations for the payment of interest on and principal\nof its municipal obligations may be materially, adversely affected by litigation or other conditions.

TAXABLE OBLIGATIONS. Certain\nFunds may invest in taxable municipal obligations. Taxable municipal obligations are typically issued by municipalities or their agencies\nfor purposes which do not qualify for federal tax exemption, but do qualify for state and local tax exemption. These debt obligations\nare issued to finance the cost of buying, building or improving various projects, such as sporting facilities, health care facilities,\nhousing projects, electric, water and sewer utilities, and colleges or universities. Generally, payments on these debt obligations depend\non the revenues generated by the projects, excise taxes or state appropriations, or the debt obligations can be backed by the government’s\ntaxing power. Due to federal taxation, taxable municipal obligations offer yields more comparable to other taxable sectors such as corporate\nbonds or agency bonds than to other municipal obligations. These debt obligations are federally taxable to individuals but may be exempt\nfrom state and local taxes, although the Funds may not be eligible to pass through to shareholders the state and local tax-exempt character\nof this income.

TAX-EXEMPT OBLIGATIONS. Under\nnormal market conditions, the North Carolina Intermediate Tax-Free ETF will invest at least 80% of its net assets plus borrowings for\ninvestment purposes in investments the income from which, in the opinion of the issuer’s bond counsel at the time of issuance, is\nexempt both from federal income tax and North Carolina personal income tax and not treated as a preference item for purposes of the federal\nalternative minimum tax for individuals (“North Carolina Tax-Exempt Obligations”). Under normal market conditions, the Virginia\nIntermediate Tax-Free ETF will invest at least 80% of its net assets plus borrowings for investment purposes in investments the income\nfrom which, in the opinion of the issuer’s bond counsel at the time of issuance, is exempt both from federal income tax and Virginia\npersonal income tax and not treated as a preference item for purposes of the federal alternative minimum tax for individuals (“Virginia\nTax-Exempt Obligations”). In addition to the North Carolina Tax-Exempt Obligations and the Virginia Tax-Exempt Obligations, the\nTax-Free Bond Funds may invest in tax-exempt obligations issued by or on behalf of states other than North Carolina and

Virginia and territories and possessions of the United\nStates, the District of Columbia and their respective authorities, agencies, instrumentalities, and political subdivisions, the interest\non which, in the opinion of the issuer’s counsel at the time of issuance, is exempt from federal income tax and is not treated as\na preference item for individuals for purposes of the federal alternative minimum tax (“National Tax-Exempt Obligations”).\nNorth Carolina Tax-Exempt Obligations, Virginia Tax-Exempt Obligations and National Tax-Exempt Obligations are hereinafter collectively\nreferred to as “Tax-Exempt Obligations.” All Funds except the Small Cap Value Focused Factor ETF may invest in Tax-Exempt\nObligations. The Funds other than the Tax-Free Bond Funds do not expect to be eligible to pass through tax-exempt interest in the form\nof exempt-interest dividends to shareholders.

Tax-Exempt Obligations include\ndebt obligations issued by governmental entities to obtain funds for various public purposes, such as the construction of a wide range\nof public facilities, the refunding of outstanding obligations, the payment of general operating expenses, and the extension of loans\nto other public institutions and facilities. Private activity bonds that are issued by or on behalf of public authorities to finance various\nprivately-operated facilities are included within the term Tax-Exempt Obligations if the interest paid thereon is both exempt from federal\nincome tax and not treated as a preference item for individuals for purposes of the federal alternative minimum tax.

Tax-Exempt Obligations may also\ninclude General Obligation Notes, Tax Anticipation Notes, Bond Anticipation Notes, Revenue Anticipation Notes, Project Notes, Tax-Exempt\nCommercial Paper, Construction Loan Notes and other forms of short-term tax-exempt loans. Such instruments are issued with a short-term\nmaturity in anticipation of the receipt of tax funds, the proceeds of bond placements or other revenues.

Project Notes are issued by\na state or local housing agency and are sold by the Department of Housing and Urban Development. While the issuing agency has the primary\nobligation with respect to its Project Notes, they are also secured by the full faith and credit of the United States through agreements\nwith the issuing authority which provide that, if required, the federal government will lend the issuer an amount equal to the principal\nof and interest on the Project Notes.

The two principal classifications\nof Tax-Exempt Obligations consist of “general obligation” and “revenue” issues. General obligation bonds are typically\nbacked by the full faith and credit of the issuer, whereas revenue bonds are payable from a specific project or other limited source of\nrevenue. The Funds may also acquire “moral obligation” issues, which are normally issued by special purpose authorities. State\nunits and local governments in Virginia and North Carolina are permitted to issue moral obligation debt that is not a general obligation\nof those issuers.

There are, of course, variations\nin the quality of Tax-Exempt Obligations, both within a particular classification and between classifications, and the yields on Tax-Exempt\nObligations depend upon a variety of factors, including general money market conditions, the financial condition of the issuer, general\nconditions of the municipal bond market, the size of a particular offering, the maturity of the obligation and the rating of the issue.\nThe ratings of Moody’s and S&P represent opinions as to the quality of Tax-Exempt Obligations. It should be emphasized, however,\nthat ratings are general and are not absolute standards of quality, and Tax-Exempt Obligations with the same maturity, interest rate and\nrating may have different yields, while Tax-Exempt Obligations of the same maturity and interest rate with different ratings may have\nthe same yield. Subsequent to purchase by a Fund, an issue of Tax-Exempt Obligations may cease to be rated or its rating may be reduced\nbelow the minimum rating required for purchase by the Funds. Neither event would under all circumstances require the elimination of such\nan obligation from the Fund’s investment portfolio. However, the obligation generally would be retained only if such retention was\ndetermined by the Fund’s portfolio manager to be in the best interests of the Fund.

An issuer’s obligations\nfor its Tax-Exempt Obligations are subject to the provisions of bankruptcy, insolvency, and other laws affecting the rights and remedies\nof creditors, such as the federal bankruptcy code, and laws, if any, which may be enacted by Congress or state legislatures extending\nthe time for payment of principal or interest, or both, or imposing other constraints upon the enforcement of such obligations or upon\nthe ability of municipalities to levy taxes. The power or ability of an issuer to meet its obligations for the payment of interest on\nand principal of its Tax-Exempt Obligations may be materially adversely affected by litigation or other conditions.

Also included within the general\ncategory of Tax-Exempt Obligations are participation certificates in a lease, an installment purchase contract, or a conditional sales\ncontract (hereinafter collectively called “lease obligations”) entered into by a state or political subdivisions to finance\nthe acquisition or construction of equipment, land, or facilities. Although lease obligations do not generally constitute general obligations\nof the issuer for which the lessee’s unlimited taxing power is pledged (in Virginia, such obligations are not included in the calculation\nof applicable debt limits, provided such obligations are properly structured), the lease obligation is frequently assignable and backed\nby the lessee’s covenant to budget for, appropriate, and make the payments due under the lease obligation. However, certain lease\nobligations contain “non-appropriation” clauses which provide that the lessee has no obligation to make lease or installment\npurchase payments in future years unless money is appropriated for such purpose on a yearly basis. Although “non-appropriation”\nlease obligations are secured by the leased property, disposition of the property in the event of foreclosure might prove difficult. These\nsecurities represent a relatively new type of financing that has not yet developed the depth of marketability associated with more conventional\nsecurities. Certain investments in lease obligations may be illiquid. Under guidelines established by the Board of Trustees, the following\nfactors will be considered when determining the liquidity of a lease obligation: (1) the frequency

of trades and quotes for the obligation; (2) the\nnumber of dealers willing to purchase or sell the obligation and the number of potential buyers; (3) the willingness of dealers to undertake\nto make a market in the obligation; and (4) the nature of the marketplace trades.

VARIABLE AND FLOATING RATE NOTES.\nThe Tax-Free Bond Funds may acquire variable and floating rate tax-exempt notes, subject to each Fund’s investment objective, policies,\nand restrictions. A variable rate note is one whose terms provide for the adjustment of its interest rate on set dates and which, upon\nsuch adjustment, can reasonably be expected to have a market value that approximates its par value. A floating rate note is one whose\nterms provide for the adjustment of its interest rate whenever a specified interest rate changes and which, at any time, can reasonably\nbe expected to have a market value that approximates its par value. Such notes are frequently not rated by credit rating agencies; however,\nunrated variable and floating rate notes purchased by a Fund will be determined by Sterling Capital with respect to the Tax-Free Bond\nFunds under guidelines established by the Board of Trustees to be of comparable quality at the time of purchase to rated instruments eligible\nfor purchase under a Fund’s investment policies. In making such determinations, Sterling Capital with respect to the Tax-Free Bond\nFunds will consider the earning power, cash flow and other liquidity ratios of the issuers of such notes (such issuers include financial,\nmerchandising, bank holding and other companies) and will continuously monitor their financial condition. Although there may be no active\nsecondary market with respect to a particular variable or floating rate note purchased by the Tax-Free Bond Funds, a Fund may resell a\nnote at any time to a third party. The absence of an active secondary market, however, could make it difficult for a Fund to dispose of\na variable or floating rate note in the event the issuer of the note defaulted on its payment obligations and a Fund could, as a result\nor for other reasons, suffer a loss to the extent of the default. Variable or floating rate notes may be secured by bank letters of credit.

For purposes of the Tax-Free\nBond Funds, the maturities of the variable and floating rate notes will be determined in accordance with Rule 2a-7 under the 1940 Act.\n

WHEN-ISSUED SECURITIES. Each\nFund may purchase securities on a when-issued basis. In addition, certain Funds may purchase and sell securities on a forward commitment\nbasis (i.e., for delivery beyond the normal settlement date at a stated price and yield), including\n“TBA” (to-be-announced) purchase commitments. Financial Industry Regulatory Authority, Inc. (FINRA) rules impose mandatory\nmargin requirements on TBA transactions, with limited exceptions. The collateralization of TBA trades is intended to mitigate counterparty\ncredit risk between trade and settlement, but could increase the cost of TBA transactions and impose added operational complexity.

When a Fund engages in when-issued\nor forward commitment transactions, it relies on the seller to consummate the trade. Failure of the seller to do so may result in the\nFund incurring a loss or missing the opportunity to obtain a price considered to be advantageous. In addition, the purchase of securities\non a when-issued or forward commitment basis involves a risk of loss if the value of the security to be purchased declines prior to the\nsettlement date. A Fund expects that commitments by a Fund to purchase when-issued securities will not exceed 25% of the value of its\ntotal assets under normal market conditions.

CALLS. Certain Funds may write\n(sell) “covered” call options and purchase options to close out options previously written by it. Such options may be listed\non a national securities exchange and cleared by the Options Clearing Corporation or may be entered into bilaterally with counterparties\noff-exchange in over-the-counter transactions. In the case of a call option on a security, the option is “covered” if the\nFund owns the security underlying the call or has an absolute and immediate right to acquire that security without additional cash consideration\n(or, if additional cash consideration is required, cash or cash equivalents in such amount as are held in a segregated account by its\ncustodian) upon conversion or exchange of other securities held by it. For a call option on an index, the option is covered if the Fund\nmaintains with its custodian cash or liquid portfolio securities equal to the contract value. A call option is also covered if the Fund\nholds a call on the same security or index as the call written where the exercise price of the call held is (i) equal to or less than\nthe exercise price of the call written, or (ii) greater than the exercise price of the call written provided the difference is maintained\nby the Fund in cash or liquid portfolio securities in a segregated account with its custodian.

Subject to its investment objective\nand policies, a Fund may write covered call options for hedging and risk management purposes and to generate additional premium income\nfor the Fund. This premium income will serve to enhance the distribution to unitholders and will reduce the effect of any price decline\nof the security involved in the option. Covered call options will generally be written on securities which, in the opinion of a Fund’s\nAdviser, are not expected to make major price moves above the strike price in the near future but which, over the long term, are deemed\nto be attractive investments for the Fund.

A call option on a security\ngives the holder (buyer) the right to purchase a security at a specified price (the exercise price) at any time until (in the case of\nan “American-style” option) or at a specified time on (in the case of a “European-style” option) a certain date\n(the expiration date). If the buyer of the option exercises the option, the writer of the option is either required to deliver the underlying\nsecurity (in the case of physically-settled options) against payment of the exercise price or pay the difference between the price of\nthe underlying security on the exercise date and the exercise price (in the case of cash-settled options). This obligation terminates\nupon the expiration of the call option, or such earlier time at which the writer effects a closing purchase transaction by repurchasing\nan option identical to that previously sold. To secure the writer’s obligation to deliver the underlying security in the case of\nan exchange-traded physically-settled call option, a writer is required to deposit in escrow the underlying security or other assets in\naccordance with the rules of the Options Clearing Corporation.

Fund securities on which call\noptions may be written will be purchased solely on the basis of investment considerations consistent with a Fund’s investment objectives.\nWhen writing a covered call option, a Fund, in return for the premium, gives up the opportunity for profit from a price increase in the\nunderlying security above the exercise price, but retains the risk of loss should the price of the security decline. Unlike one who owns\nsecurities not subject to a physically-settled American-style option, a Fund does not have any control over the point at which it may\nbe required to sell the underlying securities, because it may be assigned an exercise notice at any time prior to the expiration of its\nobligation as a writer. If a call option which a Fund has written expires, a Fund will realize a gain in the amount of the premium; however,\nsuch gain may be offset by a decline in the market value of the underlying security during the option period. If the call option is exercised,\na Fund will realize a gain or loss from the sale of the underlying security.

The premium received is the\nmarket value of an option. The premium a Fund will receive from writing a call option will reflect, among other things, the current market\nprice of the underlying security, the relationship of the exercise price to such market price, the implied volatility of the underlying\nsecurity, and the length of the option period. Once the decision to write a call option has been made, the Adviser, in determining whether\na particular call option should be written on a particular security, will consider the reasonableness of the anticipated premium and the\nlikelihood that a liquid secondary market will exist for those options. The premium received by a Fund for writing covered call options\nwill be recorded as a liability in a Fund’s statement of assets and liabilities. This liability will be readjusted daily to the\noption’s current market value, which will be the latest sale price at the time at which the NAV per share of a Fund is computed\n(typically, the close of the New York Stock Exchange (“NYSE”)), or, in the absence of such sale, the latest asked price. The\nliability will be extinguished upon expiration of the option, the purchase of an identical option in the closing transaction, or delivery\nof the underlying security upon the exercise of the option.

Closing transactions will be\neffected in order to realize a profit on an outstanding call option, to prevent an underlying security from being called, or to permit\nthe sale of the underlying security. Furthermore, effecting a closing transaction will permit a Fund to write another call option on the\nunderlying security with either a different exercise price or expiration date or both. If a Fund desires to sell a particular security\nfrom its portfolio on which it has written a call option, it will seek to effect a closing transaction prior to, or concurrently with,\nthe sale of the security. There is, of course, no assurance that a Fund will be able to effect such closing transactions at a favorable\nprice. If a Fund cannot enter into such a transaction, it may be required to hold a security that it might otherwise have sold, in which\ncase it would continue to bear market risk on the security. This could result in higher transaction costs. A Fund will pay transaction\ncosts in connection with the writing of options to close out previously written options. Such transaction costs are normally higher than\nthose applicable to purchases and sales of portfolio securities.

Call options written by a Fund\nwill normally have expiration dates of less than nine months from the date written. The exercise price of the options may be below, equal\nto, or above the current market values of the underlying securities at the time the options are written. From time to time, a Fund may\npurchase an underlying security for delivery in accordance with an exercise notice of a call option assigned to it, rather than delivering\nsuch security from its portfolio. In such cases, additional costs will be incurred.

A Fund will realize a profit\nor loss from a closing purchase transaction if the cost of the transaction is less or more than the premium received from the writing\nof the option. Because increases in the market price of a call option will generally reflect increases in the market price of the underlying\nsecurity, any loss resulting from the repurchase of a call option is likely to be offset in whole or in part by appreciation of the underlying\nsecurity owned by a Fund.

The Equity Funds may purchase\ncall options for the purpose of hedging.

PUTS. The Tax-Free Bond Funds\nmay acquire “puts” with respect to Tax-Exempt Obligations held in their portfolios. The Equity Funds may buy put options for\nthe purpose of hedging. The Small Cap Value Focused Factor ETF may buy put options, buy call options, and write secured put options for\nthe purpose of hedging or earning additional income, which may be deemed speculative. A put is a right to sell a specified security (or\nsecurities) within a specified period of time at a specified exercise price. Each of the Funds may sell, transfer, or assign a put only\nin conjunction with the sale, transfer, or assignment of the underlying security or securities.

The amount payable to a Fund\nupon its exercise of a “put” is normally (i) the Fund’s acquisition cost of the securities subject to the put (excluding\nany accrued interest which the Fund paid on the acquisition), less any amortized market premium or plus any amortized market or original\nissue discount during the period the Fund owned the securities, plus (ii) all interest accrued on the securities since the last interest\npayment date during that period.

Puts may be acquired by the\nTax-Free Bond Funds to facilitate the liquidity of their portfolio assets or to shorten the maturity of underlying assets. Puts may also\nbe used to facilitate the reinvestment of assets at a rate of return more favorable than that of the underlying security.

The Tax-Free Bond Funds will\ngenerally acquire puts only where the puts are available without the payment of any direct or indirect consideration. However, if necessary\nor advisable, a Fund may pay for puts either separately in cash or by paying a higher price for portfolio securities which are acquired\nsubject to the puts (thus reducing the yield to maturity otherwise available for the same securities).

These Funds intend to enter into puts only with dealers,\nbanks, and broker-dealers that are deemed creditworthy by a Fund’s Adviser.

PUT AND CALL OPTIONS. Options\ntrading is a highly specialized activity that entails greater than ordinary investment risks. In addition, unlisted options are not subject\nto the protections afforded purchasers of listed options issued by the Options Clearing Corporation, which performs the obligations of\nits members if they default. Cross-hedging is the use of options or forward contracts in one currency to hedge against fluctuations in\nthe value of securities denominated in a different currency based on a belief that there is a pattern of correlation between the two currencies.\nThe Funds may buy put options and simultaneously sell put options at a lower strike price (known as a put spread) to obtain a predetermined\namount of protection on the security.

STAND-BY COMMITMENTS. The Tax-Free\nBond Funds may acquire “stand-by commitments” with respect to Tax-Exempt Obligations held in their portfolios, and the Equity\nFunds may acquire stand-by commitments with respect to the securities held in their portfolio. Under a stand-by commitment, a dealer would\nagree to purchase at a Fund’s option specified securities at their amortized cost value to the Fund plus accrued interest, if any.\n(Stand-by commitments acquired by a Fund may also be referred to as put options.) Stand-by commitments may be exercisable by a Fund at\nany time before the maturity of the underlying securities and may be sold, transferred, or assigned only with the instruments involved.\nA Fund’s right to exercise stand-by commitments will be unconditional and unqualified.

The amount payable to a Fund\nupon its exercise of a stand-by commitment will normally be (i) the Fund’s acquisition cost of the securities (excluding any accrued\ninterest which the Fund paid on their acquisition), less any amortized market premium or plus any amortized market or original issue discount\nduring the period the Fund owned the securities, plus (ii) all interest accrued on the securities since the last interest payment date\nduring the period.

Each Fund expects that stand-by\ncommitments will generally be available without the payment of any direct or indirect consideration. However, if necessary or advisable,\na Fund may pay for a stand-by commitment either separately in cash or by paying a higher price for portfolio securities which are acquired\nsubject to the commitment (thus reducing the yield to maturity otherwise available for the same securities). The total amount paid in\neither manner for outstanding stand-by commitments held by a Fund will not exceed 1/2 of 1% of the value of that Fund’s total assets\ncalculated immediately after each stand-by commitment is acquired.

Each Fund intends to enter into\nstand-by commitments only with dealers, banks, and broker-dealers that are deemed creditworthy by the Adviser. A Fund’s reliance\nupon the credit of these dealers, banks, and broker-dealers will be secured by the value of the underlying securities that are subject\nto the commitment.

A Fund would acquire stand-by\ncommitments solely to facilitate portfolio liquidity and does not intend to exercise its rights thereunder for speculative purposes. The\nacquisition of a stand-by commitment would not affect the valuation or assumed maturity of the underlying securities. Stand-by commitments\nacquired by a Fund would be valued at zero in determining NAV. Where the Fund paid any consideration directly or indirectly for a stand-by\ncommitment, its cost would be reflected as unrealized depreciation for the period during which the commitment was held by that Fund.

RISK FACTORS RELATING TO OPTIONS.\nThere are several risks associated with transactions in put and call options. For example, there are significant differences between the\nsecurities and options markets that could result in an imperfect correlation between these markets, causing a given transaction not to\nachieve its objectives. In addition, a liquid secondary market for particular options, whether traded over-the-counter or on an exchange\nmay be absent for reasons which include the following: there may be insufficient trading interest in certain options, restrictions may\nbe imposed by an exchange on opening transactions or closing transactions or both; trading halts, suspensions or other restrictions may\nbe imposed with respect to particular classes or series of options or underlying securities; unusual or unforeseen circumstances may interrupt\nnormal operations on an exchange; the facilities of an exchange or the Options Clearing Corporation may not at all times be adequate to\nhandle current trading volume; or one or more exchanges could, for economic or other reasons, decide or be compelled at some future date\nto discontinue the trading of options (or a particular class or series of options), in which event the secondary market on that exchange\n(or in that class or series of options) would cease to exist, although outstanding options that had been issued by the Options Clearing\nCorporation as a result of trades on that exchange would continue to be exercisable in accordance with their terms. In addition, the success\nof a hedging strategy based on options transactions may depend on the ability of the Fund’s Adviser to predict movements in the\nprices of individual securities, fluctuations in markets and movements in interest rates.

Each of the options exchanges\nhas established limitations governing the maximum number of call or put options on the same asset that may be bought or written by a single\ninvestor, whether acting alone or in concert with others (regardless of whether such options are written on the same or different exchanges\nor are held or written on one or more accounts or through one or more brokers). Under these limitations, option positions of all investment\ncompanies advised by the Manager are combined for purposes of these limits. Pursuant to these limitations, an exchange may order the liquidation\nof positions and may impose other sanctions or restrictions. These position limits may restrict the number of listed\noptions that a Fund may buy or sell.

FUTURES CONTRACTS AND RELATED\nOPTIONS. Certain Funds may invest in futures contracts and options thereon. Futures contracts obligate a Fund, at maturity, to buy or\nsell a specified quantity of an asset, index or rate, such as securities, a securities index or a foreign currency at a specified time\nand price. A Fund may enter into a futures contract to hedge the value of its securities portfolio as a whole or to protect against declines\nin the value of securities to be sold. In addition, a Fund may utilize futures contracts in anticipation of changes in the composition\nof its holdings, interest rates (including the Federal Funds Rate) or foreign currency exchange rates. Futures contracts are traded on\nan exchange, so that, in most cases, either party can close out its position on the exchange for cash, without delivering the security\nor commodity or otherwise selling the contract. However, there can be no assurance that a liquid secondary market will exist for any particular\nfutures contract at any specific time. Thus, it may not be possible to close a futures position, and the Fund would be obligated to meet\nmargin requirements (as discussed below) until the position is closed. In addition, a Fund may be required to make delivery of the assets\nunderlying futures contracts it holds. The inability to close options and futures positions also could have an adverse impact on a Fund’s\nability to effectively hedge.

The margin required for a futures\ncontract is set by the clearing house on which the contract is cleared and the Fund’s futures commission merchant and may be modified\nduring the term of the contract. Margin requirements on foreign exchanges made be different than U.S. exchanges. The initial margin is\nin the nature of a performance bond or good faith deposit on the futures contract, which is returned to the Fund upon termination of the\ncontract, assuming all contractual obligations have been satisfied. The Funds may earn interest income on initial margin deposits. Each\nday the Fund pays or receives cash, called “variation margin,” equal to the daily change in value of the futures contract.\nThis process is known as “marking to market.” Variation margin does not represent a borrowing or loan by a Fund but is instead\na settlement between the Fund and the broker of the amount one would own the other if the futures contract expired. In computing daily\nnet asset value, each Fund will mark-to-market its open futures positions.

A Fund’s futures broker\nmay limit a Fund’s ability to invest in certain futures contracts. Such restrictions may adversely affect the Fund’s performance\nand its ability to achieve its investment objective.

Successful use of futures by\nthe Funds is also subject to an Adviser’s ability to correctly predict movements in the direction of the markets. For example, if\na Fund has hedged against the possibility of a decline in the market adversely affecting securities held by it and securities prices increase\ninstead, a Fund will lose part or all of the benefit to the increased value of its securities which it has hedged because it will have\napproximately equal offsetting losses in its futures positions. In addition, in some situations, if a Fund has insufficient cash, it may\nhave to sell securities to meet daily variation margin requirements. Such sales of securities may be, but will not necessarily be, at\nincreased prices which reflect the rising market. A Fund may have to sell securities at a time when it may be disadvantageous to do so.\nThere can be no guarantee that there will be a correlation between price movements in the hedging instruments and in the Fund’s\nsecurities being hedged. In addition, there are significant differences between the securities and futures markets that could result in\nan imperfect correlation between the markets, causing a hedge not to achieve its objectives.

The risk of loss in trading\nfutures contracts in some strategies can be substantial, due both to the low margin deposits required, and the extremely high degree of\nleverage involved in futures pricing. As a result, a relatively small price movement in a futures contract may result in immediate and\nsubstantial loss (as well as gain) to the investor. For example, if at the time of purchase, 10% of the value of the futures contract\nis deposited as margin, a subsequent 10% decrease in the value of the futures contract would result in a total loss of the margin deposit,\nbefore any deduction for the transaction costs, if the account were then closed out. A 15% decrease would result in a loss equal to 150%\nof the original margin deposit, before any deduction for the transaction costs, if the contract were closed out. Thus, a purchase or sale\nof a futures contract may result in losses in excess of the amount invested in the contract.

Utilization of futures transactions\nby a Fund involves the risk of loss by a Fund of margin deposits in the event of bankruptcy of a broker or clearing house with whom a\nFund has an open position in a futures contract or related option and the risk that such a broker or clearing house may be unable or unwilling\nto meet its obligations. Futures contracts are centrally cleared and involve risks similar to those associated with the clearing of swaps.\nSee “Swaps” above.

Most futures exchanges limit\nthe amount of fluctuation permitted in futures contract prices during a single trading day. The daily limit establishes the maximum amount\nthat the price of a futures contract may vary either up or down from the previous day’s settlement price at the end of a trading\nsession. Once the daily limit has been reached in a particular type of contract, no trades may be made on that day at a price beyond that\nlimit. The daily limit governs only price movement during a particular trading day and therefore does not limit potential losses, and\nthe limit may prevent the liquidation of unfavorable positions. Futures contract prices have occasionally moved to the daily limit for\nseveral consecutive trading days with little or no trading, thereby preventing prompt liquidation of futures positions and subjecting\nsome futures traders to substantial losses.

The trading of futures contracts\nis also subject to the risk of trading halts, suspensions, exchange or clearing house equipment failures, government intervention, insolvency\nof a brokerage firm or clearing house or other disruptions of normal trading activity, which could at times make it difficult to impossible\nto liquidate existing positions or to recover excess variation margin payments. Furthermore, exchanges may cancel trades in limited circumstances,\nfor example, if the exchange believes that allowing such trades to

stand as executed could have an adverse impact on\nthe stability or integrity of the market. Any such cancellation may adversely affect the performance of a Fund.

Certain Funds may purchase and\nsell call and put options on futures contracts traded on an exchange or board of trade. When a Fund purchases an option on a futures contract,\nit has the right to assume a position as a purchaser or a seller of a futures contract at a specified exercise price during the option\nperiod. When a Fund sells an option on a futures contract, it becomes obligated to sell or buy a futures contract if the option is exercised.\nWhen a Fund trades options on futures contracts, it is subject to many of the risks associated with trading futures contracts.

RIGHTS OFFERINGS AND WARRANTS\nTO PURCHASE. Certain Funds may participate in rights offerings and may purchase warrants, which are privileges issued by corporations\nenabling the owners to subscribe to and purchase a specified number of shares of the corporation at a specified price during a specified\nperiod of time. Subscription rights normally have a short life span to expiration. The purchase of rights or warrants involves the risk\nthat the Fund could lose the purchase value of a right or warrant if the right to subscribe to additional shares is not exercised prior\nto the rights’ and warrants’ expiration. Also, the purchase of rights and/or warrants involves the risk that the effective\nprice paid for the right and/or warrant added to the subscription price of the related security may exceed the value of the subscribed\nsecurity’s market price such as when there is no movement in the level of the underlying security.

EXCHANGE-TRADED FUNDS. Certain\nFunds may invest in ETFs, such as Standard & Poor’s Depositary Receipts (“SPDRs”) and NASDAQ-100 Index Tracking\nStock (“NASDAQ 100s”). ETFs are ownership interests in unit investment trusts, depositary receipts, and other pooled investment\nvehicles that hold a portfolio of securities or stocks designed to track the price, performance and dividend yield of an index or a group\nof stocks in a particular geographic area.

ETFs invest in a securities\nportfolio that includes substantially all of the securities (in substantially the same weights) as the securities included in the designated\nindex. The results of ETFs will not match the performance of the designated index due to reductions in the performance attributable to\ntransaction and other expenses, including fees paid by the ETF to service providers. ETFs are subject to risks specific to the performance\nof a few component securities if such securities represent a highly concentrated weighting in the designated index. ETFs are eligible\nto receive their portion of dividends, if any, accumulated on the securities held in trust, less fees and expenses of the trust.

An investment in an ETF offers,\namong other things, (i) an efficient means to achieve diversification in a particular industry, or (ii) for those Funds that invest in\nforeign securities, exposure to a particular country that would otherwise only be possible through a series of transactions and numerous\nholdings. Although similar diversification benefits may be achieved through an investment in another investment company, ETFs generally\noffer greater liquidity and lower expenses.

Because an ETF charges its own\nfees and expenses, fund shareholders will indirectly bear these costs. The Funds will also incur brokerage commissions and related charges\nwhen purchasing shares in an ETF in secondary market transactions. Unlike typical investment company shares, which are valued once daily,\nshares in an ETF may be purchased or sold on a listed securities exchange throughout the trading day at market prices that are generally\nclose to NAV.

An index-based ETF may purchase,\nretain and sell securities at times when an actively managed fund would not do so. As a result, you can expect greater risk of loss (and\na corresponding greater prospect of gain) from changes in the value of securities that are heavily weighted in the index than would be\nthe case if the investment vehicle was not fully invested in such securities.

Since ETFs are investment companies,\ninvestment in ETFs would, absent exemptive relief, be limited under applicable federal statutory provisions. Those provisions generally\nrestrict a fund’s investment in the shares of another investment company to, as determined immediately after a purchase is made,\nnot more than 5% of its total assets (which may represent no more than 3% of the outstanding voting stock of such other investment company)\nand limit aggregate investments in all investment companies to 10% of total assets (the “3-5-10 Limitations”). The Funds may\ninvest in certain ETFs in excess of the 3-5-10 Limitations pursuant to Rule 12d1-4 under the 1940 Act or another statutory or rule exemption,\nor to the extent the SEC issues exemptive relief to the ETF, subject to certain conditions and to the extent permitted by their investment\nstrategies.

EXCHANGE-TRADED NOTES (“ETNs”).\nA Fund may invest in ETNs. ETNs are typically senior, unsecured, unsubordinated debt securities whose returns are linked to the performance\nof a particular market index less applicable fees and expenses. ETNs are listed on an exchange and traded in the secondary market. A Fund\nmay hold the ETN until maturity, at which time the issuer is obligated to pay a return linked to the performance of the relevant market\nindex. ETNs do not make periodic interest payments and principal is not protected.

The market value of an ETN may\nbe influenced by, among other things, time to maturity, level of supply and demand of the ETN, volatility and lack of liquidity in the\nunderlying assets, changes in the applicable interest rates, the current performance of the market index to which the ETN is linked, and\nthe credit rating of the ETN issuer. The market value of an ETN may differ from the

performance of the applicable market index and there\nmay be times when an ETN trades at a premium or discount. This difference in price may be due to the fact that the supply and demand in\nthe market for ETNs at any point in time is not always identical to the supply and demand in the market for the securities underlying\nthe market index that the ETN seeks to track. ETNs are subject to credit risk and the value of the ETN may drop due to a downgrade in\nan issuer’s credit rating, despite the underlying reference instrument remaining unchanged. When a Fund invests in ETNs, it will\nbear its proportionate share of any fees and expenses borne by the ETN. A change in the issuer’s credit rating may also impact the\nvalue of an ETN despite the underlying market index remaining unchanged. ETNs are also subject to tax risk. No assurance can be given\nthat the IRS will accept, or a court will uphold, how a Fund characterizes and treats ETNs for tax purposes.

ETNs are also subject to tax\nrisks. The Internal Revenue Service (the “IRS”) may not accept, and a court may not uphold, how the Funds characterize and\ntreat ETNs for tax purposes. The timing and character of income and gains derived by a Fund from investments in ETNs may be affected by\nfuture legislation.

A Fund’s decision to sell\nits ETN holdings may be limited by the availability of a secondary market. In addition, although an ETN may be listed on an exchange,\nthe issuer may not be required to maintain the listing and there can be no assurance that a secondary market will exist for an ETN. Some\nETNs that use leverage in an effort to amplify the returns of an underlying market index can, at times, be relatively illiquid and may\ntherefore be difficult to purchase or sell at a fair price. Leveraged ETNs may offer the potential for greater return, but the potential\nfor loss and speed at which losses can be realized also are greater. The extent of a Fund’s investment in commodity-linked ETNs,\nif any, is limited by tax considerations.

An ETN that is tied to a specific\nmarket index may not be able to replicate and maintain exactly the composition and relative weighting of securities, commodities or other\ncomponents in the applicable market index. ETNs also incur certain expenses not incurred by their applicable market index, and a Fund\nwould bear a proportionate share of any fees and expenses borne by the ETN in which it invests.

INVESTMENTS IN BUSINESS DEVELOPMENT\nCOMPANIES (“BDCs”). Certain Funds may invest in BDCs, which typically operate as publicly traded private equity firms that\ninvest in early stage to mature private companies as well as small public companies. BDCs are regulated under the 1940 Act and are taxed\nas regulated investment companies under the Code. BDCs realize operating income when their investments are sold off, and therefore maintain\ncomplex organizational, operational, tax and compliance requirements. Under the 1940 Act, BDCs are required to invest at least 70% of\ntheir total assets primarily in securities of private companies or thinly traded U.S. public companies, cash, cash equivalents, U.S. government\nsecurities and high quality debt investments that mature in one year or less. Generally, little public information exists for private\nand thinly traded companies and there is a risk that investors may not be able to make a fully informed decision. Additionally, a BDC\nmay only incur indebtedness in amounts such that the BDC’s asset coverage equals at least 200% after such incurrence. These limitations\non asset mix and leverage may prohibit the way that the BDC raises capital.

INVESTMENT COMPANIES. Each Fund\nmay acquire the securities of other investment companies, such as open-end or closed-end management investment companies, including ETFs\nand business development companies (as discussed above), or in pooled accounts, or other unregistered accounts or investment vehicles\nto the extent permitted under the 1940 Act and consistent with their respective investment objectives and strategies. Except as noted\nbelow, the 1940 Act’s limits currently require that, as determined immediately after a purchase is made, (i) not more than 5% of\nthe value of a fund’s total assets will be invested in the securities of any one investment company, (ii) not more than 10% of the\nvalue of its total assets will be invested in the aggregate in securities of investment companies as a group and (iii) not more than 3%\nof the outstanding voting stock of any one investment company will be owned by a fund (collectively, the “3-5-10 Limitations”).\nAny of the Funds may invest in affiliated and unaffiliated money market funds without limit subject to the acquiring Fund’s investment\npolicies and restrictions and the conditions of Rule 12d1-1 under the 1940 Act. Rule 12d1-4 under the 1940 Act permits acquiring funds\nto invest in the securities of other registered investment companies in excess of the 3-5-10 Limitations, subject to certain conditions.

As a shareholder of another\ninvestment company, a Fund would bear, along with other shareholders, its pro rata portion of the other investment company’s expenses,\nincluding advisory fees. Those expenses would be in addition to the advisory and other expenses that a Fund bears directly in connection\nwith its own operations, and are reflected in the Annual Fund Operating Expenses table in the Fund’s prospectus.

Certain Funds may invest in investment companies\nthat invest primarily in debt securities.

CONVERTIBLE SECURITIES. Certain\nFunds may invest in convertible securities. Convertible securities are fixed-income securities which may be exchanged or converted into\na predetermined number of the issuer’s underlying common stock at the option of the holder during a specified time period. Convertible\nsecurities may take the form of convertible preferred stock, convertible bonds or debentures, units consisting of “usable”\nbonds and warrants or a combination of the features of several of these securities. Convertible bonds and convertible preferred stocks\nare fixed-income securities that generally retain the investment characteristics of fixed-income securities until they have been converted,\nbut also react to both movements in interest rates and movements in the underlying equity

securities. The holder is entitled to receive the\nfixed-income of a bond or the dividend preference of a preferred stock until the holder elects to exercise the conversion privilege. Usable\nbonds are corporate bonds that can be used in whole or in part, customarily at full face value, in lieu of cash to purchase the issuer’s\ncommon stock. When owned as part of a unit along with warrants, which are options to buy the common stock, they function as convertible\nbonds, except that the warrants generally will expire before the bond’s maturity. Convertible securities are senior to equity securities,\nand, therefore, have a claim to assets of the corporation prior to the holders of common stock in the case of liquidation. However, convertible\nsecurities are generally subordinated to similar non-convertible securities of the same company. The interest income and dividends from\nconvertible bonds and preferred stocks provide a stable stream of income with generally higher yields than common stocks, but lower than\nnon-convertible securities of similar quality.

Contingent convertible bonds\n(“CoCo bonds”) are hybrid bonds typically issued by banks. When the issuer’s capital ratio falls below a specified trigger\nlevel, or in a regulator’s discretion depending on the regulator’s judgment about the issuer’s solvency prospects, a\nCoCo bond may be written down, written off or converted into an equity security. Due to the contingent write-down, write-off and conversion\nfeature, CoCo bonds may have substantially greater risk than other securities in times of financial stress. If the trigger level is breached,\nthe issuer’s decision to write down, write off or convert a CoCo bond may be outside a Fund’s control. Any such action could\nhave an adverse effect on the Fund’s returns, and the Fund may suffer a complete loss on an investment in CoCo bonds with no chance\nof recovery even if the issuer remains in existence.

REFERENCE RATE REPLACEMENT RISK.\nThe London Interbank Offered Rate (“LIBOR”) had historically been used extensively in the U.S. and globally as a “benchmark”\nor “reference rate” for various commercial and financial contracts, including corporate and municipal bonds, bank loans, asset-backed\nand mortgage-related securities, interest rate swaps and other derivatives. Instruments in which a Fund invests may have historically\npaid interest at floating rates based on LIBOR or may have been subject to interest caps or floors based on LIBOR. The Funds and issuers\nof instruments in which a Fund invests may have also historically obtained financing at floating rates based on LIBOR. In connection with\nthe global transition away from LIBOR led by regulators and market participants as a result of benchmark reforms, LIBOR was last published\non a representative basis at the end of June 2023. Alternative reference rates to LIBOR have been established in most major currencies\nand markets in these alternative rates are continuing to develop (e.g., the Secured Overnight\nFinancing Rate (“SOFR”) for USD-LIBOR). While the transition from LIBOR has gone relatively smoothly, residual risks associated\nwith the transition may remain that may impact markets or particular investments and, as such, the full impact of the transition on the\nFunds or the financial instruments in which the Funds invest cannot yet be fully determined. SOFR is intended to be a broad measure of\nthe cost of borrowing funds overnight in transactions that are collateralized by U.S. Treasury securities. SOFR is calculated based on\ntransaction-level repo data collected from various sources. For each trading day, SOFR is calculated as a volume-weighted median rate\nderived from such data. Because SOFR is a financing rate based on overnight secured funding transactions, it differs fundamentally from\nLIBOR. LIBOR is intended to be an unsecured rate that represents interbank funding costs for different short term maturities or tenors.\nIt is a forward-looking rate reflecting expectations regarding interest rates for the applicable tenor. Thus, LIBOR is intended to be\nsensitive, in certain respects, to bank credit risk and to term interest rate risk. In contrast, SOFR is a secured overnight rate reflecting\nthe credit of U.S. Treasury securities as collateral. Thus, it is largely insensitive to credit-risk considerations and to short-term\ninterest rate risks. SOFR is a transaction-based rate, and it has been more volatile than other benchmark or market rates, such as three-month\nLIBOR, during certain periods. For these reasons, among others, there is no assurance that SOFR, or rates derived from SOFR, will perform\nin the same or similar way as LIBOR would have performed at any time, and there is no assurance that SOFR-based rates will be a suitable\nsubstitute for LIBOR. SOFR has a relatively limited history, having been first published in April 2018. The future performance of SOFR,\nand SOFR-based reference rates, cannot be predicted based on SOFR’s history or otherwise. Levels of SOFR in the future may bear\nlittle or no relation to historical levels of SOFR, LIBOR or other rates. There can also be no assurance that SOFR will not be discontinued\nor fundamentally altered in a manner that is materially adverse to the interests of the Fund. In addition, interest rates or other types\nof rates and indices which are classified as “benchmarks” have been the subject of ongoing national and international regulatory\nreform, including under the European Union (“EU”) regulation on indices used as benchmarks in financial instruments and financial\ncontracts (known as the “Benchmarks Regulation”). The Benchmarks Regulation has been enacted into United Kingdom (“UK”)\nlaw by virtue of the EU (Withdrawal) Act 2018 (as amended), subject to amendments made by the Benchmarks (Amendment and Transitional Provision)\n(EU Exit) Regulations 2019 (SI 2019/657) and other statutory instruments. Following the implementation of these reforms, the manner of\nadministration of benchmarks has changed and may further change in the future, with the result that relevant benchmarks may perform differently\nthan in the past, the use of benchmarks that are not compliant with the new standards by certain supervised entities may be restricted,\nand certain benchmarks may be eliminated entirely. Such changes could cause increased market volatility and disruptions in liquidity for\ninstruments that rely on or are impacted by such benchmarks. Additionally, there could be other consequences which cannot be predicted.

RESTRICTED SECURITIES. Each\nFund may invest in commercial paper issued by corporations without registration under the 1933 Act in reliance on the exemption in Section\n3(a)(3), and commercial paper issued in reliance on the so-called “private placement” exemption in Section 4(a)(2) (“Section\n4(a)(2) paper”). Section 4(a)(2) paper is restricted as to disposition under the federal securities laws in that any resale must\nsimilarly be made in an exempt transaction. Section 4(a)(2) paper is normally resold to other institutional investors through or with\nthe assistance of investment dealers which make a market in Section 4(a)(2) paper, thus providing liquidity.

Each Fund may purchase securities\nwhich are not registered under the 1933 Act but which can be sold to “qualified institutional

buyers” in accordance with Rule 144A under\nthe 1933 Act. These securities will not be considered illiquid so long as the Adviser determines that an adequate trading market exists\nfor the securities. This investment practice could have the effect of increasing the level of illiquidity in a Fund during any period\nthat qualified institutional buyers become uninterested in purchasing these restricted securities.

CALLABLE SECURITIES. Certain\nfixed-income securities invested in by certain Funds are callable at the option of the issuer or a third party. Callable securities are\nsubject to prepayment/call risk.

STRUCTURED PRODUCTS. Structured\nproducts, such as structured notes, generally are individually negotiated agreements and may be traded over the counter. They are organized\nand operated to restructure the investment characteristics of the underlying security. This structuring involves the deposit with or purchase\nby an entity, such as a corporation or trust, of specified instruments (such as commercial bank loans) and the issuance by that entity\nof one or more classes of securities (“structured securities”) backed by, or representing interests in, the underlying instruments.\nThe cash flow on the underlying instruments may be apportioned among the newly issued structured securities to create securities with\ndifferent investment characteristics, such as varying maturities, payment priorities and interest rate provisions, and the extent of such\npayments made with respect to structured securities is dependent on the extent of the cash flow of the underlying instruments. With respect\nto structured products, because structured securities typically involve no credit enhancement, their credit risk generally will be equivalent\nto that of the underlying instruments. Investments in structured securities are generally of a class that is either subordinated or unsubordinated\nto the right of payment of another class. Subordinated structured securities typically have higher yields and present greater risks than\nunsubordinated structured securities. Structured securities are typically sold in private placement transactions, and there is currently\nno active trading market for these securities.

LEGAL AND REGULATORY RISK. Legal,\ntax, and regulatory changes may adversely affect the Fund. New (or revised) laws or regulations or interpretations of existing law may\nbe issued by the IRS or U.S. Treasury, the U.S. Commodity Futures Trading Commission (the “CFTC”), the SEC, the U.S. Federal\nReserve or other banking regulators, or other governmental regulatory authorities, or self-regulatory organizations that supervise the\nfinancial markets that could adversely affect the Funds. In particular, these agencies are empowered to promulgate a variety of new rules\npursuant to recently enacted financial reform legislation in the United States. The Funds also may be adversely affected by changes in\nthe enforcement or interpretation of existing statutes and rules by these governmental regulatory authorities or self-regulatory organizations.\nIt is impossible to predict what, if any, changes in regulations may occur, but any regulation that restricts the ability of a Fund to\ntrade in securities could have a material adverse impact on a Fund’s performance.

In addition, the securities\nand derivatives markets are subject to comprehensive statutes, regulations, and margin requirements. The CFTC, the SEC, the FDIC, other\nregulators, and self-regulatory organizations and exchanges are authorized to take extraordinary actions in the event of market emergencies.\nThe regulation of securitization and derivatives transactions and funds that engage in such transactions is an evolving area of law and\nis subject to modification by government and judicial action. For more information, please see “Derivatives Regulation” below.

Each Fund (for purposes of this\nsection, each a “Pool”) is operated by a person who has claimed an exclusion from the definition of the term “commodity\npool operator” under the Commodity Exchange Act (“CEA”) pursuant to Rule 4.5 under the CEA (the “exclusion”)\npromulgated by the CFTC. Accordingly, the Adviser (with respect to each Pool) is not subject to registration or regulation as a “commodity\npool operator” under the CEA. To remain eligible for the exclusion, each Pool will be limited in its ability to use certain financial\ninstruments regulated under the CEA (“commodity interests”), including futures and options on futures and certain swaps transactions.\nIn the event that the adviser believes that the relevant Pool’s investments in commodity interests exceed the thresholds set forth\nin the exclusion, the Adviser may be required to register as a “commodity pool operator” with the CFTC with respect to that\nPool. The Adviser’s eligibility to claim the exclusion with respect to each Pool will be based upon, among other things, the level\nand scope of each Pool’s investment in commodity interests, the purposes of such investments and the manner in which each Pool holds\nout its use of commodity interests. Each Pool’s ability to invest in commodity interests is limited by the Adviser’s intention\nto operate each Pool in a manner that would permit the Adviser to continue to claim the exclusion under Rule 4.5, which may adversely\naffect each Pool’s total return. In the event the Adviser becomes unable to rely on the exclusion in Rule 4.5 and is required to\nregister with the CFTC as a commodity pool operator with respect to a Pool, that Pool’s expenses may increase, adversely affecting\nthat Pool’s total return, and the commodity pool operators (“CPOs”) of any shareholders that are pooled investment vehicles\nmay be unable to rely on certain CPO registration exemptions.

The CFTC, certain foreign regulators,\nand many futures exchanges have established (and continue to evaluate and monitor) speculative position limits (“position limits”)\non the maximum speculative position which any person, or group of persons acting in concert, may hold or control in particular contracts.\nIn addition, U.S. federal position limits apply to swaps that are economically equivalent to futures contracts on certain agricultural,\nmetals, and energy commodities. All positions owned or controlled by the same person or entity, even if in different accounts, must be\naggregated for purposes of complying with the speculative limits. Thus, even if a Fund does not intend to exceed applicable position limits,\nit is possible that different clients managed by Sterling Capital and its affiliates may be aggregated for this purpose. Therefore, the\ntrading decisions of Sterling Capital may have to be modified and positions held by the Funds may have to be liquidated in order to avoid\nexceeding such limits. The modification of investment decisions or the elimination of open positions, if it occurs, may adversely affect\nthe profitability of a Fund. A violation of position limits could also lead

to regulatory action materially adverse to a Fund’s\ninvestment strategy. A Fund may also be affected by other regimes, including those of the European Union and United Kingdom, and trading\nvenues that impose position limits on commodity derivative contracts

The SEC and regulatory authorities\nin other jurisdictions may adopt (and in certain cases, have adopted) bans on short sales of certain securities in response to market\nevents. Bans on short selling may make it impossible for a Fund to execute certain investment strategies and may have a material adverse\neffect on the Fund’s ability to generate returns.

Short sales are also subject\nto certain SEC regulations and certain European Union and United Kingdom regulations (under which there are restrictions on net short\nsales in certain securities). If the SEC or regulatory authorities in other jurisdictions were to adopt additional restrictions regarding\nshort sales, they could restrict a Fund's ability to engage in short sales in certain circumstances, and the Fund may be unable to execute\nits investment strategy as a result. In response to market events, the SEC and regulatory authorities in other jurisdictions may adopt\n(and in certain cases, have adopted) bans or other restrictions on short sales of certain securities or on derivatives and other hedging\ninstruments used to achieve a similar economic effect. Such bans or other restrictions may make it impossible for a Fund to execute certain\ninvestment strategies and may have a material adverse effect on the Fund's ability to generate returns.

Rules implementing the credit\nrisk retention requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) for asset-backed\nsecurities require the sponsor of certain securitization vehicles (or a majority-owned affiliate of the sponsor) to retain, and to refrain\nfrom transferring, selling, conveying to a third party, or hedging 5% of the credit risk in assets transferred, sold, or conveyed through\nthe issuance of such vehicle, subject to certain exceptions. These requirements may increase the costs to originators, securitizers, and,\nin certain cases, collateral managers of securitization vehicles in which a Fund may invest, which costs could be passed along to such\nFund as an investor in such transactions.

Investors should also be aware\nthat some EU-regulated institutions (such as banks, certain investment firms, and managers of alternative investment funds) are currently\nrestricted from investing in securitizations (including U.S.-related securitizations), unless, in summary: (i) the institution is able\nto demonstrate that it has undertaken certain due diligence in respect of various matters, including its investment position, the underlying\nassets, and in certain cases the originator of the securitization; and (ii) the originator, sponsor, or original lender of the securitization\nhas disclosed to the institution that it will retain, on an ongoing basis, a net economic interest of not less than 5% of specified credit\nrisk tranches or asset exposures related to the securitization. In addition, in respect of securitization transactions the securities\nof which are issued on or after January 1, 2019, there is a direct requirement on the originator, sponsor or original lender of the securitization\nto make the required credit risk retention. Although the requirements do not apply to any of the Funds directly, the costs of compliance,\nin the case of any securitization within the EU risk retention rules in which a Fund has invested or is seeking to invest, could be indirectly\nborne by the Fund and the other investors in the securitization.

DERIVATIVES REGULATION. The\nU.S. government has enacted legislation that provides for regulation of the derivatives market, including clearing, margin, reporting,\nand registration requirements. The European Union, the United Kingdom, and some other countries have adopted similar requirements, which\naffect a Fund when it enters into a derivatives transaction with a counterparty subject to those requirements. Because implementation\nof the legislation is evolving, their ultimate impact on the Funds remains unclear.

Regulators in the U.S., the\nEuropean Union, the United Kingdom, and certain other jurisdictions have adopted mandatory minimum margin requirements for bilateral derivatives.\nThese rules impose minimum variation margin requirements and, in some cases, initial margin requirements that could increase the amount\nof margin a Fund needs to provide in connection with its derivatives transactions and, therefore, make derivatives transactions more expensive.\nIn addition, in the event of a counterparty’s (or its affiliate’s) insolvency, a Fund’s ability to exercise remedies\ncould be stayed or eliminated under new special resolution regimes adopted in the United States, the European Union, the United Kingdom,\nand various other jurisdictions. Such regimes provide government authorities with broad authority to intervene when a financial institution\nis experiencing financial difficulty and may prohibit a Fund from exercising termination rights based on the financial institution’s\ninsolvency. In particular, in the European Union and the United Kingdom, governmental authorities could reduce, eliminate or convert to\nequity the liabilities to the Funds of a counterparty experiencing financial difficulties (sometimes referred to as a “bail in”).

Rule 18f-4 under the 1940 Act\n(“Rule 18f-4”) governs the use of derivatives and certain related instruments (e.g.,\nreverse repurchase agreements) by registered investment companies. Among other things, Rule 18f-4 limits derivatives exposure through\none of two value-at-risk tests, requires funds to adopt and implement a derivatives risk management program (including the appointment\nof a derivatives risk manager and the implementation of certain testing requirements), and subjects funds to certain reporting requirements\nin respect of derivatives. Limited derivatives users (as determined by Rule 18f-4) are not, however, subject to the full requirements\nof Rule 18f-4. In connection with the adoption of Rule 18f-4, the SEC also eliminated the asset segregation framework arising from prior\nSEC guidance for covering certain derivative instruments and related transactions.

These and other new rules and\nregulations could, among other things, further restrict a Fund’s ability to engage in, or increase the cost to the Fund of, derivatives\ntransactions, for example, by making some types of derivatives no longer available to the Fund or otherwise limiting liquidity. The implementation\nof the clearing requirement has increased the cost of derivatives transactions, since

market participants have to pay fees to their clearing\nmember and are typically required to post more margin for cleared derivatives than they historically posted for bilateral derivatives.\nThe cost of derivatives transactions is expected to increase further as clearing members raise their fees to cover the cost of additional\ncapital requirements and other regulatory changes applicable to the clearing members. These rules and regulations continue to evolve,\nand, therefore, their ultimate impact on the Funds and the financial system is difficult to ascertain. While derivatives rules and regulations\n(including the central clearing requirement) of some derivatives transactions are generally designed to reduce systemic risk (i.e.,\nthe risk that the interdependence of large derivatives dealers could cause them to suffer liquidity, solvency or other challenges simultaneously),\nthere is no assurance that they will achieve that result, and in the meantime, as noted above, some requirements like central clearing\nand related requirements expose the Funds to additional kinds of costs and risks.

MARKET RISK. The risk that the\nmarket value of an investment or security may move up and down, sometimes rapidly and unpredictably for a variety of reasons, including\ngeneral financial market conditions, changing market perceptions and changes in government intervention in the financial markets. These\nfluctuations 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.\nIn addition, the increasing popularity of passive index-based investing may have the potential to increase security price correlations\nand volatility. (As passive strategies generally buy or sell securities based simply on inclusion and representation in an index, securities\nprices will have an increasing tendency to rise or fall based on whether money is flowing into or out of passive strategies rather than\nbased on an analysis of the prospects and valuation of individual securities. This may result in increased market volatility as more money\nis invested through passive strategies). These and other factors may lead to increased volatility and reduced liquidity in a Fund’s\nportfolio holdings.

Market risk may affect a single\nissuer, industrial sector of the economy or the market as a whole. For fixed income securities, market risk is largely, but not exclusively,\ninfluenced by changes in interest rates. Equity securities generally have greater price volatility than fixed income securities, although\nunder certain market conditions fixed income securities may have comparable or greater price volatility. A rise in interest rates typically\ncauses a fall in values, while a fall in rates typically causes a rise in values. Key information about a security or market may be inaccurate\nor unavailable. This is particularly relevant to investments in foreign securities. A Fund may also be subject to inverse market risk,\nthe particular type of market risk associated with investments that are intended to perform when equity markets decline. These investments\nwill lose value when the equity markets to which they are tied are increasing in value.

Some sectors of the economy\nand individual issuers have experienced or may experience particularly large losses. Periods of extreme volatility in the financial markets,\nreduced liquidity of many instruments, increased government debt, inflation, and disruptions to supply chains, consumer demand and employee\navailability, may continue for some time. Raising the ceiling on U.S. government debt has become increasingly politicized. Any failure\nto increase the total amount that the U.S. government is authorized to borrow could lead to a default on U.S. government obligations,\nwith unpredictable consequences for economies and markets in the U.S. and elsewhere. The COVID-19 pandemic resulted in significant market\nvolatility, exchange suspensions and closures, declines in global financial markets, higher default rates, supply chain disruptions, and\na substantial economic downturn in economies throughout the world. The impact of this coronavirus, and other epidemics and pandemics that\nmay arise in the future, could affect economies, companies and the market in general in ways that cannot necessarily be foreseen at the\npresent time. These health crises may be short term or long term, and may exacerbate other pre-existing political, social and economic\nrisks, disrupt normal market conditions and operations, and negatively impact performance. In addition, the impact of infectious diseases\nin emerging developing or emerging market countries may be greater due to less established health care systems. Changes in interest rates\nand inflation, political or social developments, including military conflict (such as Russia’s military invasion of Ukraine, conflicts\nin the Middle East and Asia, and tension between nations such as China and Taiwan), and geopolitical developments (including trading and\ntariff arrangements, sanctions, and cybersecurity attacks) have occurred and can continue to occur in the future. These events and circumstances\ncould adversely affect the value and liquidity of the Funds’ investments, impair the Funds’ ability to satisfy redemption\nrequests, and negatively impact the Funds’ performance.

MANAGEMENT RISK. Each Fund is\nsubject to management risk because it relies on the Fund’s Adviser and portfolio managers to achieve its investment objective. Each\nFund runs the risk that the portfolio manager’s investment techniques will fail to produce desired results and cause the Fund to\nincur significant losses. A Fund’s portfolio managers also may fail to use derivatives effectively, choosing to hedge or not to\nhedge positions at disadvantageous times. In the case of Tax-Free Bond Funds, Sterling Capital’s tax-management strategies may be\nineffective or limited by market conditions, the timing of cash flows into and out of the Fund, and current or future changes in tax legislation\nand regulation.

There can be no assurance that\nkey Sterling Capital personnel will continue to be employed by Sterling Capital. The loss of their services could have an adverse impact\non the Adviser’s ability to achieve the Funds’ investment objectives.

MARKET DISRUPTION AND GEOPOLITICAL\nRISK. The Funds are subject to the risk that geopolitical and other events (e.g., wars and terrorism)\nwill disrupt securities markets and adversely affect global economies and markets, thereby decreasing the value of the Funds’ investments.\nSudden or significant changes in the supply or prices of commodities or other economic inputs (e.g.,\nthe marked decline in oil prices that began in late 2014) may have material and unexpected effects on both global securities markets and\nindividual countries, regions, sectors, companies, or industries, which could significantly reduce the value of a Fund’s investments.\nTerrorism in the United States and around the world has increased geopolitical risk. The terrorist attacks on September 11, 2001 resulted

in the closure of some U.S. securities markets for\nfour days, and similar attacks are possible in the future. In addition, the Funds are subject to the risk that geopolitical events, such\nas political, social or financial instability, civil unrest, and other political developments, such as sanctions, tariffs, the imposition\nof exchange controls or other cross-border trade barriers or “trade wars”, may negatively affect a Fund’s investment\nin issuers located in, doing business in, or with assets relating to a market affected by such geopolitical event. Securities markets\nmay be susceptible to market manipulation or other fraudulent trading practices, which could disrupt their orderly functioning or reduce\nthe prices of securities traded on them, including securities held by the Funds. Fraud and other deceptive practices committed by a company\nwhose securities are held by a Fund undermine Sterling Capital’s due diligence efforts and, when discovered, will likely cause a\nsteep decline in the market price of those securities and thus negatively affect the value of the Fund’s investments. In addition,\nwhen discovered, financial fraud may contribute to overall market volatility, which can negatively affect a Fund’s investment program,\nas well as the rates or indices underlying a Fund’s investments.

While the U.S. government has\nalways honored its credit obligations, a default by the U.S. government (as has been threatened in the recent past) would be highly disruptive\nto the U.S. and global securities markets and could significantly reduce the value of the Funds’ investments. Similarly, political\nevents within the United States at times have resulted, and may in the future result, in shutdowns of government services, which could\nadversely affect the U.S. economy, decrease the value of many Fund investments, and increase uncertainty in or impair the operation of\nthe U.S. or other securities markets. Climate change regulation (such as decarbonization legislation or other mandatory controls to reduce\nomissions of greenhouse gases) could significantly affect many of the companies in which the Funds invest by, among other things, increasing\nthose companies’ operating costs and capital expenditures. Uncertainty surrounding the sovereign debt of several European Union\ncountries, as well uncertainty surrounding as the continued existence of the European Union itself, has disrupted and may continue to\ndisrupt markets in the United States and around the world. If a country changes its currency or if the European Union dissolves, the world’s\nsecurities markets likely will be significantly disrupted.

In March 2023, the shut-down\nof certain financial institutions raised economic concerns over disruption in the U.S. banking system. There can be no certainty that\nthe actions taken by the U.S. government to strengthen public confidence in the U.S. banking system will be effective in mitigating the\neffects of financial institution failures on the economy and restoring public confidence in the U.S. banking system. Other adverse developments\nthat affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these kinds\nor other similar risks, may reduce liquidity in the market generally or have other adverse effects on the economy, a Fund or issuers in\nwhich the Funds invest. In addition, issuers in which the Funds invest and the Funds may not be able to identify all potential solvency\nor stress concerns with respect to a financial institution or to transfer assets from one bank or financial institution to another in\na timely manner in the event such bank or financial institution comes under stress or fails. Currency exchange rates can also be affected\nunpredictably by intervention by U.S. or foreign governments or central banks, or the failure to intervene, or buy currency controls or\npolitical developments in the United States or abroad.

The United Kingdom formally\nwithdrew from the European Union (commonly known as “Brexit”) on January 31, 2020. As a result of the political divisions\nwithin the UK and between the UK and the EU that the referendum vote has highlighted and the uncertain consequences of Brexit, the UK\nand European economies and the broader economy could be significantly impacted, potentially resulting in increased market volatility and\nilliquidity, political, economic, and legal uncertainty, and lower economic growth for companies that rely significantly on Europe for\ntheir business activities and revenues. Any further exits from the EU, or the possibility of such exits, or the abandonment of the Euro,\nmay cause additional market disruption globally and introduce new legal and regulatory uncertainties.

War, terrorism, economic uncertainty,\nand related geopolitical events, such as sanctions, tariffs, the imposition of exchange controls or other cross-border trade barriers\nhave led, and in the future may lead, to increased short-term market volatility and may have adverse long-term effects on U.S. and world\neconomies and markets generally. For example, Russia’s invasion of Ukraine beginning in late February 2022, and subsequent related\nevents, have had, and could continue to have, severe adverse effects on regional and global economic markets for securities and commodities.\nFollowing Russia’s actions, various governments, including the United States, issued broad-ranging economic sanctions against Russia,\nincluding, among other sanctions, a prohibition on doing business with certain Russian companies, large financial institutions, officials\nand oligarchs; the removal by certain countries and the European Union of selected Russian banks from the Society for Worldwide Interbank\nFinancial Telecommunications (commonly referred to as “SWIFT”), the electronic banking network that connects banks globally;\nand restrictive measure to prevent the Russian Central Bank from undermining the impact of the sanctions. Those events, including sanctions\nand the potential for future sanctions, including any affecting Russia’s energy sector, and other actions, and Russia’s retaliatory\nresponses to those sanctions and actions, have adversely affected the Russian economy and may result in the further decline of the value\nand liquidity of Russian securities, a continued weakening of the ruble and continued exchange closures, and may have other adverse consequences\non the Russian economy that affect the value of Russian investments and impair the ability of a Fund to buy, sell, receive or deliver\nthose securities. In addition, trade disputes may adversely affect the economies of the United States and its trading partners, as well\nas companies directly or indirectly affected and financial markets generally. The United States government has prohibited U.S. persons\nfrom investing in Chinese companies designated as related to the Chinese military. These and possible future restrictions could limit\nthe fund’s opportunities for investment and require the sale of securities at a loss or make them illiquid. Moreover, the Chinese\ngovernment is involved in a longstanding dispute with Taiwan that has included threats of invasion. If the political climate between the\nUnited States and China does not improve or continues to deteriorate, if China were to attempt unification of Taiwan by force, or if other\ngeopolitical conflicts develop

or get worse, economies, markets and individual securities\nmay be severely affected both regionally and globally, and the value of the fund’s assets may go down. Events such as these and\ntheir impact on the Funds are difficult to predict.

Likewise, natural and environmental\ndisasters (such as the earthquake and tsunami in Japan in early 2011), epidemics or pandemics (such as the outbreak of COVID-19), and\nsystemic market dislocations (such as the kind surrounding the insolvency of Lehman Brothers in 2008), if repeated, would be highly disruptive\nto economies and markets, adversely affecting individual companies and industries, securities markets, interest rates, credit ratings,\ninflation, investor sentiment, and other factors affecting the value of the Funds’ investments. During such market disruptions,\nthe Funds’ exposure to the risks described elsewhere in this SAI and in the Prospectuses will likely increase. Market disruptions,\nincluding sudden government interventions, can also prevent the Funds from implementing their investment programs and achieving their\ninvestment objectives. For example, a market disruption may adversely affect the orderly functioning of the securities markets and may\ncause the Funds’ derivatives counterparties to discontinue offering derivatives on some underlying commodities, securities, reference\nrates, or indices or to offer them on a more limited basis. To the extent a Fund has focused its investments in the stock index of a particular\nregion, adverse geopolitical and other events in that region could have a disproportionate impact on the Fund.

Some of the companies in which\na Fund invests may be located in, or otherwise connected to, parts of the world affected by natural disasters such as severe heat, earthquakes,\ntornadoes, volcanic eruptions, wildfires, droughts, floods, hurricanes or tsunamis, and are economically sensitive to environmental events.\nIn addition, issuers may be impacted by security concerns with respect to a country or region, such as war and other types of conflict,\nterrorism, strained international relations and territorial disputes. Any of these events may adversely affect the issuers, markets and\neconomies to which a Fund is exposed, which may adversely affect the value of the Fund. Some countries, including the U.S., have adopted\nmore protectionist trade policies. The U.S. government recently altered its approach to international trade policy, resulting in significant\nimpacts on international trade relations, certain tax and immigration policies, and other aspects of the national and international political\nand financial landscape. The rise in protectionist trade policies, slowing economic growth, changes to some major international trade\nagreements, risks associated with trade agreements between the U.S. and the European Union, and the risks associated with trade negotiations\nbetween the U.S. and China, could affect the economies of many nations in ways that cannot necessarily be foreseen at the present time.\nGlobal trade disruption, significant introductions of trade barriers, and bilateral trade frictions, together with any future downturns\nin the global economy resulting therefrom, could adversely affect the financial performance of a Fund and its investments. Trade policy\nmay be an ongoing source of instability, potentially resulting in significant currency fluctuations and/or having other adverse effects\non international markets, international trade agreements, and/or other existing cross-border cooperation arrangements (whether economic,\ntax, fiscal, legal, regulatory, or otherwise). To the extent trade disputes escalate globally, there could be additional significant impacts\non the sectors or industries in which a Fund invests and other adverse impacts on a Fund's overall performance.

OPERATIONAL AND TECHNOLOGY RISKS.\nA Fund and the entities with which it interacts directly or indirectly are susceptible to operational and technology risks, including\nthose related to human errors, processing errors, communication errors, systems failures, cybersecurity incidents, and the use of artificial\nintelligence and machine learning (“AI”), which may result in losses for the Fund and its shareholders or impair the Fund’s\noperations. These entities include, but are not limited to, the Fund’s adviser, administrator, distributor, other service providers\n(e.g., index and benchmark providers, accountants, custodians, and transfer agents), financial\nintermediaries, counterparties, market makers, Authorized Participants, listing exchanges, other financial market operators, and governmental\nauthorities. Operational and technology risks for the issuers in which the Fund invests could also result in material adverse consequences\nfor such issuers and may cause the Fund’s investments in such issuers to lose value. A Fund may incur substantial costs in order\nto mitigate operational and technology risks.

Cybersecurity incidents can\nresult from deliberate attacks or unintentional events against an issuer in which a Fund invests, the Fund or any of its service providers.\nThey include, but are not limited to, gaining unauthorized access to systems, misappropriating assets or sensitive information, corrupting\nor destroying data, and causing operational disruption. Geopolitical tension may increase the scale and sophistication of deliberate attacks,\nparticularly those from nation states or from entities with nation state backing. Cybersecurity incidents may result in any of the following:\nfinancial losses; interference with a Fund’s ability to calculate its NAV; disclosure of confidential information; impediments to\ntrading; submission of erroneous trades by a Fund or erroneous subscription or redemption orders; the inability of a Fund or its service\nproviders to transact business; violations of applicable privacy and other laws; regulatory fines; penalties; reputational damage; reimbursement\nor other compensation costs; and other legal and compliance expenses. Furthermore, cybersecurity incidents may render records of a Fund,\nincluding records relating to its assets and transactions, shareholder ownership of Fund shares, and other data integral to the Fund’s\nfunctioning, inaccessible, inaccurate or incomplete. Power outages, natural disasters, equipment malfunctions and processing errors that\nthreaten information and technology systems relied upon by a Fund or its service providers, as well as market events that occur at a pace\nthat overloads these systems, may also disrupt business operations or impact critical data.

Artificial intelligence (AI)\nrefers to computer systems that can perform tasks that would otherwise require human intelligence and encompasses various different forms\nof artificial intelligence, including machine learning models. AI is typically designed to analyze data, learn from patterns and experiences,\nmake decisions, and solve problems. The risks of increased use of AI technologies, such as machine learning, include data risk, transparency\nrisk, and operational risk. These AI technologies, which are generally highly

reliant on the collection and analysis of large amounts\nof data, may incorporate biased or inaccurate data, and it is not possible or practicable to incorporate all relevant data into such technologies.\nThe output or results of any such AI technologies may therefore be incomplete, erroneous, distorted or misleading. Further, AI tools may\nlack transparency as to how data is utilized and how outputs are generated. AI technologies may also allow the unintended introduction\nof vulnerabilities into infrastructures and applications. A Fund and its shareholders could be negatively impacted as a result of these\nrisks associated with AI technologies. AI technologies and their current and potential future applications, and the regulatory frameworks\nwithin which they operate, continue to quickly evolve, and it is impossible to anticipate the full scope of future AI capabilities or\nrules and the associated risks to the Fund.

While a Fund’s service\nproviders are required to have appropriate operational, information security and cybersecurity risk management policies and procedures,\ntheir methods of risk management may differ from those of the Fund in the setting of priorities, the personnel and resources available\nor the effectiveness of relevant controls. A Fund and its adviser seek to reduce these risks through controls, procedures and oversight,\nincluding establishing business continuity plans and risk management systems. However, there are inherent limitations in such plans and\nsystems, including the possibility that certain risks that may affect the Fund have not been identified or may emerge in the future; that\nsuch plans and systems may not completely eliminate the occurrence or mitigate the effects of operational or information security disruptions\nor failures or of cybersecurity incidents; or that prevention and remediation efforts will not be successful or that incidents will go\nundetected. The Funds cannot control the systems, information security or other cybersecurity of the issuers in which it invests or its\nservice providers, counterparties, and other third parties whose activities affect the Fund.

Artificial intelligence and\nits current and potential future applications, including in the investment and financial sectors, as well as the regulatory frameworks\nwithin which they operate, continue to rapidly evolve, and it is impossible to predict the full extent of future applications or regulations.\nRegulators continue to develop new rules and standards related to cybersecurity and data protection. Compliance with evolving regulations\ncan be demanding and costly, requiring substantial resources to monitor and implement required changes. Ongoing and future regulatory\nactions with respect to artificial intelligence generally or artificial intelligence's use in any industry in particular may alter, perhaps\nto a materially adverse extent, the ability of a Fund’s adviser and other service providers or other market participants to utilize\nartificial intelligence in the manner used to-date, and may have an adverse impact on the ability of a Fund’s adviser and other\nservice providers, as well as the Fund or the issuers in which it invests, service providers, or other market participants to continue\nto operate as intended.

TEMPORARY DEFENSIVE POSITIONS.\nIf deemed appropriate under the circumstances, including during adverse market conditions, portfolio rebalancing, and/or high levels of\nshareholder redemptions, certain Funds may increase its holdings in short-term obligations to up to 100% of its total assets. Under normal\nmarket conditions, the Equity Funds will limit their investment in short-term obligations to 20% of their total net assets. Such short-term\nobligations may include cash, cash equivalents, Treasury securities, money market instruments and repurchase agreements. A Fund may not\nachieve its investment objective or investment strategies as a result of taking any temporary defensive position.

UNDERWRITING SECURITIES. To\nthe extent permitted by the “Investment Restrictions” section, each Fund may underwrite securities to the extent permitted\nby the 1940 Act, or the rules and regulations thereunder, as such statute, rules or regulations may be amended from time to time, or by\nregulatory guidance or interpretations of such statute, rules or regulations.

NAMES RULE. In order to comply\nwith Rule 35d-1 under the 1940 Act (“Rule 35d-1”), the 80% investment policy for each of the North Carolina Intermediate Tax-Free\nETF and the Virgina Intermediate Tax-Free ETF is fundamental and may not be changed without shareholder approval. Refer to the applicable\nFund’s Prospectus for that Fund’s principal strategies.

FUNDAMENTAL\nINVESTMENT RESTRICTIONS

Except as provided otherwise,\nthe following investment restrictions may be changed with respect to a particular Fund only by a vote of a majority of the outstanding\nShares of that Fund (as defined under “ADDITIONAL INFORMATION – ORGANIZATION AND DESCRIPTION OF SHARES” in this SAI).

THE LARGE CAP VALUE FOCUSED FACTOR ETF MAY NOT:

1.\nPurchase any securities that would cause 25% or more of the value of such Fund’s total assets at the time of purchase to\nbe invested in securities of one or more issuers conducting their principal business activities in the same industry, provided that (a)\nthere is no limitation with respect to obligations issued or guaranteed by the U.S. government or its agencies or instrumentalities and\nrepurchase agreements secured by obligations of the U.S. government or its agencies or instrumentalities; (b) wholly-owned finance companies\nwill be considered to be in the industries of their parents if their activities are primarily related to financing the activities of their\nparents; and (c) utilities will be divided according to their services. For example, electric utilities, gas utilities, and water utilities\nwill each be considered a separate industry.

2.\nPurchase securities of any one issuer, other than obligations issued or guaranteed by the U.S. government or its agencies or

instrumentalities, if, immediately after such purchase,\nmore than 5% of the value of the Fund’s total assets would be invested in such issuer, or the Fund would hold more than 10% of any\nclass of securities of the issuer or more than 10% of the outstanding voting securities of the issuer, except that up to 25% of the value\nof the Fund’s total assets may be invested without regard to such limitations. There is no limit to the percentage of assets that\nmay be invested in U.S. Treasury bills, notes, or other obligations issued or guaranteed by the U.S. government or its agencies or instrumentalities.

THE SMALL CAP VALUE FOCUSED FACTOR ETF MAY NOT:

1.\nPurchase any securities that would cause 25% or more of the value of such Fund’s total assets at the time of purchase to\nbe invested in securities of one or more issuers conducting their principal business activities in the same industry, provided that (a)\nthere is no limitation with respect to obligations issued or guaranteed by the U.S. Government or its agencies or instrumentalities and\nrepurchase agreements secured by obligations of the U.S. Government or its agencies or instrumentalities; (b) wholly-owned finance companies\nwill be considered to be in the industries of their parents if their activities are primarily related to financing the activities of their\nparents; and (c) utilities will be divided according to their services. For example, electric utilities, gas utilities, and water utilities\nwill each be considered a separate industry.

2.\nUnderwrite any issue of securities, except as the Fund may be deemed to be an underwriter under the 1933 Act in connection with\nthe sale of securities in accordance with its investment objectives, policies, and limitations.

THE SMALL CAP VALUE ETF MAY NOT:

1. Purchase securities of any\none issuer, other than obligations issued or guaranteed by the U.S. government or its agencies or instrumentalities, if, immediately after\nsuch purchase, more than 5% of the value of the Fund’s total assets would be invested in such issuer, or the Fund would hold more\nthan 10% of any class of securities of the issuer or more than 10% of the outstanding voting securities of the issuer, except that up\nto 25% of the value of the Fund’s total assets may be invested without regard to such limitations. There is no limit to the percentage\nof assets that may be invested in U.S. Treasury bills, notes, or other obligations issued or guaranteed by the U.S. government or its\nagencies or instrumentalities.

2. Purchase any securities that\nwould cause 25% or more of the value of such Fund’s total assets at the time of purchase to be invested in securities of one or\nmore issuers conducting their principal business activities in the same industry, provided that (a) there is no limitation with respect\nto obligations issued or guaranteed by the U.S. government or its agencies or instrumentalities and repurchase agreements secured by obligations\nof the U.S. government or its agencies or instrumentalities; (b) wholly- owned finance companies will be considered to be in the industries\nof their parents if their activities are primarily related to financing the activities of their parents; and (c) utilities will be divided\naccording to their services. For example, electric utilities, gas utilities, and water utilities will each be considered a separate industry.

EACH OF\nTHE FUNDS (EXCEPT THE SMALL CAP VALUE FOCUSED FACTOR ETF) MAY:

1. Borrow money\nor lend to the extent permitted by the 1940 Act, or the rules or regulations thereunder as such statute, rules or regulations may be amended\nfrom time to time, or by regulatory guidance or interpretation of such statute, rules or regulations.

EACH\nOF THE\nFUNDS MAY:

1.\nIssue senior securities to the extent permitted by the 1940 Act, or the rules or regulations thereunder as such statute, rules\nor regulations may be amended from time to time, or by regulatory guidance or interpretation of such statute, rules or regulations.

THE NORTH CAROLINA INTERMEDIATE\nTAX-FREE ETF AND THE VIRGINIA INTERMEDIATE TAX-FREE ETF MAY NOT:

1.\nPurchase any securities which would cause 25% or more of the value of the Fund’s total assets at the time of purchase to\nbe invested in securities of one or more issuers conducting their principal business activities in the same industry, provided that (a)\nthere is no limitation with respect to obligations issued or guaranteed by the U.S. government or its agencies or instrumentalities and\nrepurchase agreements secured by obligations of the U.S. government or its agencies or instrumentalities, and (b) this limitation shall\nnot apply to Tax-Exempt Obligations or governmental guarantees of Tax-Exempt Obligations. For purposes of this limitation, a security\nis considered to be issued by the government entity (or entities) whose assets and revenues back the security, or, with respect to a private\nactivity bond that is backed only by the assets and revenues of a non-governmental user, such nongovernmental user.

EACH FUND MAY:

1.\nPurchase or sell commodities, commodities contracts, or future contracts or real estate to the extent permitted by the 1940 Act,\nor the rules or regulations thereunder as such statute, rules or regulations may be amended from time to time, or by regulatory guidance or interpretation of such statute, rules\nor regulations.

THE SMALL CAP VALUE FOCUSED\nFACTOR ETF MAY:

1.\nPurchase securities of any issuer only when consistent with the maintenance of its status as a diversified company under the 1940\nAct, or the rules or regulations thereunder, as such statute, rules or regulations may be amended from time to time. Under the 1940 Act,\nand the rules, regulations, and interpretations thereunder, a “diversified company,” as to 75% of its total assets, may not\npurchase securities of any issuer (other than U.S. Treasury bills, notes or other obligations issued or guaranteed by the U.S. Government,\nits agencies or its instrumentalities) if, as a result, more than 5% of the value of its total assets would be invested in the securities\nof such issuer or more than 10% of the issuer’s voting securities would be held by the fund.

2.\nBorrow money or lend to the extent permitted by the 1940 Act, or the rules or regulations thereunder as such statute, rules or\nregulations may be amended from time to time, or by regulatory guidance or interpretation of such statute, rules or regulations. The 1940\nAct limits the Fund’s ability to borrow money, prohibiting a fund from issuing senior securities, except that it may borrow from\nany bank, provided that immediately after any such borrowing there is an asset coverage of at least 300% for all borrowings by a fund\nand provided further, that in the event that such asset coverage shall at any time fall below 300%, a fund shall, within three days thereafter\nor such longer period as the SEC may prescribe by rules and regulations, reduce the amount of its borrowings to such an extent that the\nasset coverage of such borrowing shall be at least 300%.

NOTE REGARDING FUNDAMENTAL INVESTMENT\nRESTRICTIONS. Certain relevant limitations of the 1940 Act are described below. These limitations are based either on the 1940 Act itself,\nthe rules or regulations thereunder or applicable orders of the SEC. In addition, interpretations and guidance provided by the SEC staff\nmay be taken into account, where deemed appropriate by a Fund, to determine if an investment practice or the purchase of securities or\nother instruments is permitted by the 1940 Act, the rules or regulations thereunder or applicable orders of the SEC.

Under the 1940 Act, a “diversified\ncompany,” as to 75% of its total assets, may not purchase securities of any issuer (other than obligations of, or guaranteed by,\nthe U.S. government, its agencies or its instrumentalities) if, as a result, more than 5% of the value of its total assets would be invested\nin the securities of such issuer or more than 10% of the issuer’s voting securities would be held by the fund. “Concentration”\nis generally interpreted under the 1940 Act to be investing more than 25% of total assets in an industry or group of industries. For purposes\nof the concentration policies described above, the Funds generally determine industry classifications for purposes of these policies in\nreference to issuer-assigned Global Industry Classification Standard (“GICS”) codes provided to the Fund by unaffiliated third-party\nvendors (“GICS Codes”) and the Funds treat each industry represented by a distinct 6-digit GICS Code as a separate “industry.”\nIn addition, the Funds do not consider investment companies to constitute an “industry.” Rather, a Fund will “look-through”\ninvestments in investment companies to the underlying securities held by such investment companies when determining fund exposure to a\nparticular industry.

The 1940 Act also limits the\namount that a Fund may invest in other investment companies, prohibiting the Fund from (i) owning more than 3% of the total outstanding\nvoting stock of a single other investment company; (ii) investing more than 5% of its total assets in the securities of a single other\ninvestment company; and (iii) investing more than 10% of its total assets in securities of all other investment companies (the “3-5-10\nLimitations”). SEC Rule 12d1-4 under the 1940 Act, which became effective on January 19, 2022, is designed to streamline and enhance\nthe regulatory framework for funds of funds arrangements. Rule 12d1-4 permits acquiring funds to invest in the securities of other registered\ninvestment companies beyond certain statutory limits, subject to certain conditions. In connection with this rule, the SEC rescinded Rule\n12d1-2 under the 1940 Act and most fund of funds exemptive orders, effective as of January 19, 2022.

The 1940 Act restricts the ability\nof any mutual fund to lend. Under the 1940 Act, a Fund may only make loans if expressly permitted to do so by a Fund’s investment\npolicies, and a Fund may not make loans to persons who control or are under common control with a Fund. Thus, the 1940 Act effectively\nprohibits a Fund from making loans to certain persons when conflicts of interest or undue influence are most likely present.

The 1940 Act limits a Fund’s\nability to borrow money, prohibiting a fund from issuing senior securities, except that it may borrow from any bank, provided that immediately\nafter any such borrowing there is an asset coverage of at least 300% for all borrowings by a fund and provided further, that in the event\nthat such asset coverage shall at any time fall below 300%, a fund shall, within three days thereafter or such longer period as the SEC\nmay prescribe by rules and regulations, reduce the amount of its borrowings to such an extent that the asset coverage of such borrowing\nshall be at least 300%.

The 1940 Act prohibits a diversified mutual fund\nfrom underwriting securities in excess of 25% of its total assets.

Additionally, a Fund’s\nability to make certain types of investments (e.g., investments in commodities or real estate)\nmay be limited by other applicable laws, rules, or regulations, including the Code.

With respect to each of\nthe North Carolina Intermediate Tax-Free ETF and the Virgina Intermediate Tax-Free ETF, the Funds will look through a private\nactivity municipal debt security whose principal or interest payments are derived principally from the assets or revenues of a\nnon-governmental entity in order to determine the industry of the issuer for determining each Fund’s compliance with its\nindustry concentration policy.

NON-FUNDAMENTAL\nINVESTMENT RESTRICTIONS

The following investment restriction is considered\nNON-FUNDAMENTAL and therefore may be changed by a vote of a majority of the Trustees of the Funds:

1.\nAll Funds may not purchase securities on margin, except that a Fund may obtain such short-term credits as are necessary for the\nclearance of portfolio transactions, and a Fund may make margin payments in connection with futures contracts, options, forward contracts,\nswaps, caps, floors, collars and other financial instruments.

NOTE\nREGARDING INVESTMENT\nRESTRICTIONS

Whenever an investment policy\nor investment restriction set forth in the Prospectus or this SAI states a requirement with respect to the percentage of assets that may\nbe invested in any security or other asset, or describes a policy regarding quality standards, such percentage limitation or standard\nshall be determined immediately after and as a result of the acquisition by the Fund of such security or asset. Accordingly, unless otherwise\nnoted, any later increase or decrease resulting from a change in values, assets or other circumstances or any subsequent rating change\nmade by a rating service (or as determined by the investment adviser if the security is not rated by a rating agency), will not compel\nthe Fund to dispose of such security or other asset. However, a Fund must always be in compliance with its borrowing policy set forth\nabove. If the Fund is required to reduce borrowings, it will do so in a manner that is consistent with the 1940 Act and guidance of the\nSEC or its staff, and that complies with any applicable SEC exemptive order.

PORTFOLIO\nTURNOVER

The portfolio turnover rate\nfor each Fund is calculated by dividing the lesser of a Fund’s purchases or sales of portfolio securities for the year by the monthly\naverage value of the portfolio securities. The calculation excludes all securities whose maturities at the time of acquisition were one\nyear or less.

For the fiscal years ended September 30, 2025 and\nSeptember 30, 2024, the approximate portfolio turnover rates for each of the Funds were as follows:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

\n FUND	\n	\n	\n 2025(%)	\n	\n	\n 2024(%)
\n Sterling Capital Large\n Cap Value Focused Factor ETF¹	\n	\n	\n 108.16	\n	\n	\n 99.00
\n Sterling\n Capital Small Cap Value Focused Factor ETF²	\n	\n	\n 89.59	\n	\n	\n 74.00
\n Sterling\n Capital Small Cap Value ETF³	\n	\n	\n 6.19	\n	\n	\n 2.87
\n Sterling\n Capital North Carolina Intermediate Tax-Free ETF⁴	\n	\n	\n 29.62	\n	\n	\n 20.34
\n Sterling\n Capital Virginia Intermediate Tax-Free ETF⁵	\n	\n	\n 17.40	\n	\n	\n 20.54

\n \n \n \n \n

Reflects\n the portfolio\n turnover rate\n of the\n Predecessor Behavioral Large Cap\n Value Equity Fund.

\n \n \n \n \n

Reflects\n the portfolio\n turnover rate of\n the Predecessor\n Behavioral Small Cap Value Equity Fund.

\n \n \n \n \n

Reflects\n the portfolio\n turnover rate of\n the Predecessor\n Small Cap Value Fund.

\n \n \n \n \n

Reflects\n the portfolio\n turnover rate of\n the Predecessor\n North Carolina Intermediate Tax-Free Fund.

\n \n \n \n \n

Reflects\n the portfolio\n turnover rate of\n the Predecessor\n Virginia Intermediate Tax-Free Fund.

Unless otherwise indicated,\nchanges in portfolio turnover rates were generally the result of active trading strategies employed by such Funds’ portfolio managers\nin response to market conditions, and not reflective of a material change in a Fund’s investment strategy. High turnover rates will\ngenerally result in higher transaction costs to the Funds and may result in higher levels of taxable realized gains (including short-term\ntaxable gains generally taxed as ordinary income when distributed to individual shareholders) to a Fund’s shareholders. The portfolio\nturnover rate may vary greatly from year to year as well as within a particular year, and may also be affected by cash requirements for\nredemptions of Shares. Higher portfolio turnover rates for each Fund may lead to increased taxes and transaction costs. Portfolio turnover\nwill not be a limiting factor in making investment decisions. See “Additional Tax Information.”

DISCLOSURE\nOF PORTFOLIO\nHOLDINGS

The disclosure policy of the\nFunds and the Adviser generally prohibits the disclosure of portfolio holdings information to any investor or third party before the same\ninformation is made publicly available. Employees of the Adviser and certain affiliates have ongoing access to nonpublic information concerning\nthe Fund’s portfolio holdings and are prohibited from trading securities on the

basis of this information. Such persons must report\nall personal securities trades and obtain pre-clearance for certain personal securities trades. Firms that provide administration, custody,\nfinancial, accounting, legal, or other services to the Funds may receive nonpublic information about Funds’ portfolio holdings as\nneeded for purposes relating to their services. Service providers are subject to a duty of confidentiality whether by contract, internal\npolicies or procedures, and/or pursuant to the requirements of a professional code.

Consistent with the portfolio\nholdings disclosure policy adopted by the Board, the Funds publicly disclose on each Business Day, prior to the opening of regular trading\non the Exchange, on the Funds’ website, certain information relating to the portfolio securities that will form the basis for the\nFunds’ calculation of NAV at the end of that Business Day. Consistent with this policy, the Funds may make available through the\nfacilities of the National Securities Clearing Corporation (“NSCC”) or through posting on www.sterlingcapital.com/etf, prior\nto the opening of trading on each Business Day, a list of each Fund’s holdings (generally pro-rata) that Authorized Participants\ncould deliver to the Fund to settle purchases of the Fund (i.e., Deposit Securities) or that Authorized\nParticipants would receive from the Fund to settle redemptions of the Fund (i.e., Fund Securities).\nThese files are known as the Portfolio Composition File and the Fund Data File (collectively, the “Files”). The Files are\napplicable for the next trading day and are provided to the NSCC and/or posted on www.sterlingcapital.com/etf after the close of markets\nin the U.S.

No consideration may be received\nby the Funds, the Adviser, or any other person in connection with the disclosure of portfolio information. The Board exercises oversight\nof the disclosure of Fund portfolio holdings by: (1) overseeing the implementation and enforcement of the policy, the Trust’s Code\nof Ethics and other relevant policies and procedures of the Trust and its service providers by the Trust’s Chief Compliance &\nRisk Officer (“CCO”); (2) considering reports and recommendations by the CCO concerning material compliance matters (as defined\nin Rule 38a-1 under the 1940 Act); and (3) considering proposed amendments to this policy. The Board also receives and reviews at least\nannually a list of the persons who receive nonpublic portfolio holdings information and the purposes for which it is furnished.

CONTINUOUS\nOFFERING

The Funds offer and issue Shares\nat their NAV only in Creation Units. The method by which Creation Units are created and trade may raise certain issues under applicable\nsecurities laws. Because new Creation Units are issued and sold by the Funds on an ongoing basis, at any point a “distribution,”\nas such term is used in the 1933 Act, may occur.

Broker-dealers and other persons\nare cautioned that some activities on their part may, depending on the circumstances, result in their being deemed participants in a distribution\nin a manner that could render them statutory underwriters and subject them to the prospectus delivery requirement and liability provisions\nof the 1933 Act.

For example, a broker-dealer\nfirm or its client may be deemed a statutory underwriter if it takes Creation Units after placing an order with U.S. Bancorp Fund Services,\nLLC (d/b/a U.S. Bank Global Fund Services) (the “Transfer Agent”), breaks them down into constituent shares, and sells such\nshares directly to customers, or if it chooses to couple the creation of a supply of new shares with an active selling effort involving\nsolicitation of secondary market demand for shares. A determination of whether one is an underwriter for purposes of the 1933 Act must\ntake into account all the facts and circumstances pertaining to the activities of the broker-dealer or its client in the particular case,\nand the examples mentioned above should not be considered a complete description of all the activities that could lead to categorization\nas an underwriter.

Broker-dealer firms should also\nnote that dealers who are not “underwriters” but are effecting transactions in shares, whether or not participating in the\ndistribution of shares, generally are required to deliver a prospectus. This is because the prospectus delivery exemption in Section 4(a)(3)\nof the 1933 Act is not available in respect of such transactions as a result of Section 24(d) of the 1940 Act. Firms that incur a prospectus\ndelivery obligation with respect to Shares of the Funds are reminded that, pursuant to Rule 153 under the 1933 Act, a prospectus delivery\nobligation under Section 5(b)(2) of the 1933 Act owed to an exchange member in connection with the sale on an exchange is satisfied by\nthe fact that the prospectus is available at the exchange upon request. The prospectus delivery mechanism provided in Rule 153 is only\navailable with respect to transactions on an exchange.

ADDITIONAL\nPURCHASE AND\nREDEMPTION INFORMATION

Unlike mutual funds, the Funds\noffer and issue Shares at their NAV to broker-dealers and other financial intermediaries who are participants in the NSCC and who have\nsigned an Authorized Participant Agreement with Sterling Capital Distributors, LLC, located at Three Canal Plaza, Suite 100, Portland,\nME 04101 (the “Distributor”), and accepted by the Transfer Agent, only in Creation Units, generally in exchange for a basket\nof securities and/or instruments (the “Deposit Securities”), together with a deposit of a specified cash payment (the “Cash\nComponent”). The Funds may, in certain circumstances, issue Creation Units solely in exchange for a specified all-cash payment (“Cash\nDeposit”). Shares of the Funds are likewise redeemable by the Funds only in Creation Units, generally in exchange for a basket of\nsecurities and instruments (“Redemption Securities”), together with a Cash Component. As with the offer and sale of Creation\nUnits, the Funds may, in certain circumstances, redeem Creation Units in exchange for a specified all-cash payment. Shares trade in the\nsecondary market and elsewhere at market prices that may be at, above or below NAV. The Funds may decide to use a “custom basket”\nto reduce costs, to increase trading or tax efficiency or for other reasons.

Each Fund charges creation/redemption\ntransaction fees for each creation and redemption to cover the cost to the Fund of processing the transaction. In all cases, transaction\nfees are limited in accordance with the requirements of the SEC applicable to management investment companies offering redeemable securities.

Each Fund offers, issues and\nsells its Shares only in Creation Units on a continuous basis through the Distributor, without a sales load, at the NAV next determined\nafter receipt of an order in proper form as described in the Authorized Participant Agreement, on any Business Day.

Notwithstanding the foregoing,\neach Fund may, but is not required to, permit orders until 4:00 p.m., Eastern time, or until the market close (in the event the exchange\non which the relevant Fund’s Shares are listed closes early). A “Business Day” with respect to a Fund is each day the\nFund is open, including any day that a Fund is required to be open under Section 22(e) of the 1940 Act, which excludes weekends and the\nfollowing holidays: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Juneteenth, Independence\nDay, Labor Day, Thanksgiving Day and Christmas Day. Orders to create or redeem Creation Units will be accepted by the Transfer Agent,\nand subject to the approval of the Distributor, only from the Authorized Participants. As noted below, on certain Business Days, underlying\nmarkets in which the Funds invest will be closed. On those days, the Funds may be unable to purchase or sell securities in such markets.

The time at which transactions\nand Shares are priced and the time by which orders must be received may be changed in case of an emergency or if regular trading on the\nNew York Stock Exchange (the “NYSE”) is stopped at a time other than its regularly scheduled closing time. Each Fund reserves\nthe right to reprocess creation and redemption transactions that were initially processed at any NAV other than the Fund’ s official\nclosing NAV (as the same may be subsequently adjusted), and to recover amounts from (or distribute amounts to) Authorized Participants\nbased on the official closing NAV.

FUND\nDEPOSITS

The consideration for purchase\nof Creation Units generally consists of Deposit Securities and the Cash Component, or, as permitted by a Fund, the Cash Deposit. Together,\nthe Deposit Securities and the Cash Component constitute a “Fund Deposit” or “basket” as that term is used in\nRule 6c-11 under the 1940 Act. The Fund Deposit represents the minimum initial and subsequent investment amount for a Creation Unit of\nany Fund. Such Fund Deposit is applicable, subject to any adjustments as described below, to purchases of Creation Units of Shares of\na given Fund until such time as the next-announced Fund Deposit is made available.

The function of the Cash Component\nis to compensate for any differences between the NAV per Creation Unit and the Deposit Amount (as defined below). The Cash Component is\nan amount equal to the difference between the NAV of Shares (per Creation Unit) and the “Deposit Amount,” which is an amount\nequal to the market value of the Deposit Securities. If the Cash Component is a positive number (the NAV per Creation Unit exceeds the\nDeposit Amount), the Authorized Participant will deliver the Cash Component to the Funds. If the Cash Component is a negative number (the\nNAV per Creation Unit is less than the Deposit Amount), the Authorized Participant will receive the Cash Component from the Funds. Computation\nof the Cash Component excludes any stamp duty or other similar fees and expenses payable upon transfer of beneficial ownership of the\nDeposit Securities, which shall be the sole responsibility of the Authorized Participant. In addition to above, the Cash Component may\nalso include a “Dividend Equivalent Payment,” which enables the Funds to make a complete distribution of dividends on the\nnext dividend payment date, and is an amount equal, on a per Creation Unit basis, to the dividends on all the securities held by a Fund\nwith ex-dividend dates within the accumulation period for such distribution (the “Accumulation Period”), net of expenses and\nliabilities for such period, as if all of the securities had been held by a Fund for the entire Accumulation Period. The Accumulation\nPeriod begins on the ex-dividend date for a Fund and ends on the next ex-dividend date.

The Funds’ Transfer Agent,\nthrough the NSCC, makes available on each Business Day, prior to the opening of business (subject to amendments) on the NYSE (currently\n9:30 a.m., Eastern time), the identity and the required number of each Deposit Security and the amount of the Cash Component to be included\nin the current Fund Deposit (based on information at the end of the previous Business Day).

The Deposit Securities and Cash\nComponent are subject to any adjustments, as described below, in order to effect purchases of Creation Units of the Funds until such time\nas the next-announced composition of the Deposit Securities and Cash Component is made available. The Funds may also permit the substitution\nof an amount of cash (a “cash-in-lieu” amount) to replace any Deposit Security. In determining whether a Fund will issue Creation\nUnits entirely or partially on a cash or in-kind basis (whether for a given day or a given order), the key consideration is the benefits\nthat would accrue to the Fund and its investors. For example, in light of anticipated purchases of different portfolio securities, a Fund\nmay wish to receive additional cash as part of a Fund Deposit, or may wish to receive a Cash Deposit. In addition, the Funds may permit\nan Authorized Participant to deposit cash in lieu of some or all of the Deposit Securities in a Fund Deposit because such instruments\nare not eligible for trading by the Authorized Participant or the investor on whose behalf the Authorized Participant is acting. Other\ncircumstances in which a Fund may permit the substitution of a “cash in-lieu” amount include, but are not limited to, Deposit\nSecurities that may not be available in sufficient quantity for delivery, that may not be eligible

for trading by a Participating Party (defined below),\nthat may not be permitted to be re-registered in the name of a Fund as a result of an in-kind creation order pursuant to local law or\nmarket convention, or that may not be eligible for transfer through the systems of the Depository Trust Company (the “DTC”)\nor the Clearing Process (as discussed below), or the Federal Reserve System for U.S. Treasury securities. The Funds also reserve the right\nto permit a “cash-in-lieu” amount where the delivery of Deposit Securities by the Authorized Participant (as described below)\nwould be restricted under the securities laws or where the delivery of Deposit Securities from an investor to the Authorized Participant\nwould result in the disposition of Deposit Securities by the Authorized Participant becoming restricted under the securities laws, and\nin certain other situations at the discretion of the Funds. In each case, the amount of cash contributed will be equivalent to the price\nof the instrument listed as a Deposit Security. “Cash-in-lieu” amounts will only be used in the creation and redemption process\nwhen the use is consistent with applicable law.

PROCEDURES\nFOR CREATING\nCREATION UNITS

To be eligible to place orders\nwith the Distributor and to create a Creation Unit of the Funds, an entity must be: (i) a “Participating Party” (i.e.\na broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the NSCC (the “Clearing\nProcess”), a clearing agency that is registered with the SEC); or (ii) a participant of DTC (“DTC Participant”) and\nmust have entered into an Authorized Participant Agreement with the Distributor, and accepted by the Transfer Agent, with respect to creations\nand redemptions of Creation Units (“Authorized Participant Agreement”) (discussed below). All Shares of the Funds, however\ncreated, will be entered on the records of the DTC in the name of its nominee for the account of a DTC Participant.

Except as described below, and\nin all cases subject to the terms of the applicable Authorized Participant Agreement and any creation and redemption procedures adopted\nby the Funds and provided to all Authorized Participants, an Authorized Participant seeking to initiate a creation order for a Creation\nUnit of a Fund, to be effected at the NAV of Shares of the Fund for that Business Day, must submit an irrevocable order to purchase Shares\nin proper form to the Transfer Agent no later than 2:00 p.m. Eastern Time, two hours prior to the close of regular trading on the NYSE\n(typically 4:00 p.m., Eastern Time (“Closing Time”)) on such Business Day. The date on which an order to create Creation Units\n(or an order to redeem Creation Units, as discussed below) is placed is referred to as the “Transmittal Date.” Orders must\nbe transmitted by an Authorized Participant via the electronic order entry system, by telephone or other transmission method acceptable\nto the Transfer Agent and the Distributor pursuant to procedures set forth in the Authorized Participant Agreement. Economic or market\ndisruptions or changes, or telephone or other communication failure may impede the ability to reach the Distributor or an Authorized Participant.

All investor orders to create\nCreation Units shall be placed with an Authorized Participant in the form required by such Authorized Participant. In addition, an Authorized\nParticipant may request that an investor make certain representations or enter into agreements with respect to an order (to provide for\npayments of cash). Investors should be aware that their particular broker-dealer may not have executed an Authorized Participant Agreement\nand, therefore, orders to create Creation Units of the Funds will have to be placed by the investor’s broker-dealer through an Authorized\nParticipant. In such cases, there may be additional charges to such investor. Creation Units may be created in advance of the receipt\nby the Funds of all or a portion of a Fund Deposit. In such cases, the Authorized Participant will remain liable for the full deposit\nof the missing portion(s) of a Fund Deposit and will be required to post collateral with a Fund consisting of cash up to 115% of the marked-to-market\nvalue of such missing portion(s). The Funds may use such collateral to buy the missing portion(s) of a Fund Deposit at any time and will\nsubject such Authorized Participant to liability for any shortfall between the cost to the Funds of purchasing such securities and the\nvalue of such collateral. The Funds will have no liability for any such shortfall. The Funds will return any unused portion of the collateral\nto the Authorized Participant once the entire Fund Deposit has been properly received by U.S. Bank, National Association, located at 425\nWalnut Street, M.L. CN-OH-W6TC, Cincinnati, OH 45202 (the “Custodian”) and deposited into the Fund. Orders for Creation Units\nthat are effected outside the Clearing Process are likely to require transmittal by the DTC Participant earlier on the Transmittal Date\nthan orders effected using the Clearing Process. Those persons placing orders outside the Clearing Process should ascertain the deadlines\napplicable to DTC and the Federal Reserve Bank wire system by contacting the operations department of the broker-dealer or depository\ninstitution effectuating such transfer of Deposit Securities and Cash Component.

Orders to create Creation Units\nof the Funds may be placed through the Clearing Process utilizing procedures applicable for domestic securities (see “Placement\nof Creation Orders Using the Clearing Process”) or outside the Clearing Process utilizing the procedures applicable for foreign\nsecurities (see “Placement of Creation Orders Outside the Clearing Process”). In the event that a Fund includes both domestic\nand foreign securities, the time for submitting orders as stated in the “Placement of Creation Orders Outside the Clearing Process”\nsection below shall operate.

PLACEMENT\nOF CREATION\nORDERS USING\nTHE CLEARING\nPROCESS

Fund Deposits created through\nthe Clearing Process, if available, must be delivered through a Participating Party that has executed an Authorized Participant Agreement.\nThe Authorized Participant Agreement authorizes the Custodian to transmit to NSCC on behalf of the Participating Party such trade instructions\nas are necessary to effect the Participating Party’s creation order. Pursuant to such trade instructions from the Custodian to NSCC,\nthe Participating Party agrees to transfer the requisite Deposit Securities (or contracts to purchase such Deposit Securities that are\nexpected to be delivered in a “regular way” manner within two Business Days;

and the Cash Component to the Fund, together with\nsuch additional information as may be required by the Transfer Agent and the Distributor as set forth in the Authorized Participant Agreement.\nAn order to create Creation Units of the Funds through the Clearing Process is deemed received by the Distributor on the Transmittal Date\nif (i) such order is received by the Distributor by 2:00 p.m. Eastern Time on each Business Day on such Transmittal Date and (ii) all\nother procedures set forth in the Authorized Participant Agreement are properly followed. All orders are subject to acceptance by the\nFunds and the Distributor in accordance with the procedures set forth in the Authorized Participant Agreement.

PLACEMENT\nOF CREATION\nORDERS OUTSIDE\nTHE CLEARING\nPROCESS

The Distributor will inform\nthe Transfer Agent, the Adviser and the Custodian upon receipt of a creation order. The Custodian will then provide such information to\nthe appropriate sub-custodian. The Custodian will cause the sub-custodian of the Funds to maintain an account into which the Deposit Securities\n(or the cash value of all or part of such securities, in the case of a permitted or required cash purchase or “cash-in-lieu”\namount) will be delivered. Deposit Securities must be delivered to an account maintained at the applicable local custodian. The Funds\nmust also receive, on or before the contractual settlement date, immediately available or same day funds estimated by the Custodian to\nbe sufficient to pay the Cash Component next determined after receipt in proper form of the purchase order, together with the creation\ntransaction fee described below.

Once a creation order is accepted\nby the Funds and the Distributor, the Transfer Agent will confirm the issuance of a Creation Unit of the Funds against receipt of payment,\nat such NAV as will have been calculated after receipt in proper form of such order. The Transfer Agent will then transmit a confirmation\nof acceptance of such order.

Creation Units will not be issued\nuntil the transfer of good title to the Funds of the Deposit Securities and the payment of the Cash Component have been completed. When\nthe sub-custodian has confirmed to the Custodian that the required Deposit Securities (or the cash value thereof) have been delivered\nto the account of the relevant sub-custodian, the Distributor and the Adviser will be notified of such delivery and the Transfer Agent\nwill issue and cause the delivery of the Creation Units.

ACCEPTANCE\nOF CREATION\nORDERS

The Funds reserve the right\nto reject or revoke a creation order transmitted to it by the Distributor or its agent in respect to the Funds for any legally permissible\nreason, including, but not limited to, the following circumstances: (i) the order is not in proper form; (ii) the investor(s), upon obtaining\nthe Shares ordered, would own 80% or more of the currently outstanding Shares of a Fund; (iii) the Deposit Securities delivered do not\nconform to the identity and number of Shares specified, as described above; (iv) acceptance of a Fund Deposit would, in the opinion of\ncounsel, be unlawful; or (v) in the event that circumstances outside the control of the Funds, the Transfer Agent, the Distributor or\nthe Adviser make it for all practical purposes impossible to process creation orders. Examples of such circumstances include acts of God;\npublic service or utility problems such as fires, floods, extreme weather conditions and power outages resulting in telephone, facsimile\nand computer failures; market conditions or activities causing trading halts; systems failures involving computer or other information\nsystems affecting a Fund, the Adviser, the Distributor, DTC, the Clearing Process, Federal Reserve, the Transfer Agent or any other participant\nin the creation process, and other extraordinary events. The Distributor shall notify the Authorized Participant acting on behalf of the\ncreator of a Creation Unit of its rejection of the order of such person. The Funds, Transfer Agent, and the Distributor are under no duty,\nhowever, to give notification of any defects or irregularities in the delivery of Fund Deposits nor shall any of them incur any liability\nfor the failure to give any such notification.

All questions as to the number\nof Shares of Deposit Securities and the validity, form, eligibility, and acceptance for deposit of any securities to be delivered and\nthe amount and form of the Cash Component, as applicable, shall be determined by the Funds, and a Fund’s determination shall be\nfinal and binding.

CREATION\nTRANSACTION FEE

All persons purchasing Creation\nUnits are expected to incur a transaction fee to cover the estimated cost to the Funds of processing the transaction, including estimated\ntrading costs of converting a Fund Deposit into the desired portfolio composition, and the costs of clearance and settlement charged to\na Fund by NSCC or DTC. A fixed creation transaction fee of $300 for the Funds, charged by and payable to the Custodian is imposed on each\nin-kind creation transaction ($300 for cash creations) regardless of the number of Creation Units purchased in the transaction. In the\ncase of cash creations or where a Fund permits a creator to substitute cash in lieu of depositing a portion of the Deposit Securities,\nthe creator may be assessed an additional variable charge of up to 2.00% for each Fund based on the value of a Creation Unit, to compensate\nthe Funds for the costs associated with purchasing the applicable securities (see “Fund Deposit” section above). As a result,\nin order to seek to replicate the in-kind creation order process, the Funds expect to purchase, in the secondary market or otherwise gain\nexposure to, the portfolio securities that could have been delivered as a result of an in-kind creation order pursuant to local law or\nmarket convention, or for other reasons (“Market Purchases”). In such cases where a Fund makes Market Purchases, the Authorized\nParticipant will reimburse the Fund for, among other things, any difference between the market value at which the securities and/or financial\ninstruments were purchased by the Fund and the cash in lieu amount (which amount, at the Adviser’s discretion, may be capped), applicable\nregistration fees, brokerage commissions and certain taxes. The

Adviser may adjust the transaction fee to the extent\nthe composition of the creation securities changes or cash in lieu is added to the Cash Component to protect ongoing shareholders. Creators\nof Creation Units are responsible for the costs of transferring the securities constituting the Deposit Securities to the account of the\nFund.

REDEMPTION\nOF CREATION\nUNITS

Shares may be redeemed only\nin Creation Units at the NAV next determined after receipt of a redemption request in proper form on a Business Day and only through a\nParticipating Party or DTC Participant who has executed an Authorized Participant Agreement. The Funds will not redeem Shares in amounts\nless than Creation Units (except a Fund may redeem Shares in amounts less than a Creation Unit in the event the Fund is being liquidated).\nBeneficial owners must accumulate enough Shares in the secondary market to constitute a Creation Unit in order to have such Shares redeemed\nby the Funds. There can be no assurance, however, that there will be sufficient liquidity in the public trading market at any time to\npermit assembly of a Creation Unit. Authorized Participants should expect to incur brokerage and other costs in connection with assembling\na sufficient number of Shares to constitute a redeemable Creation Unit. All redemptions are subject to the procedures contained in the\napplicable Authorized Participant Agreement.

Each Fund may publish a designated\nportfolio of securities (including any portion of such securities for which cash may be substituted) that will be applicable (subject\nto possible amendment or correction) to redemption requests received in proper form (as defined below) on that day (the “Fund Securities”\nor “Redemption Basket”), and an amount of cash (each subject to possible amendment or correction) as applicable, in order\nto effect redemptions of Creation Units of a Fund until such time as the next announced composition of the Fund Securities and cash amount\nis made available. Fund Securities received on redemption may not be identical to Deposit Securities that are applicable to creations\nof Creation Units. Redemption Baskets may differ and the Fund may accept “custom baskets.” See “Custom Baskets”\nbelow.

Orders must be transmitted by\nan Authorized Participant via the electronic order entry system, by telephone or other transmission method acceptable to the Transfer\nAgent and the Distributor pursuant to procedures set forth in the Authorized Participant Agreement. Economic or market disruptions or\nchanges, or telephone or other communication failure may impede the ability to reach the Distributor or an Authorized Participant.

Unless cash only redemptions\nare available or specified for a Fund, the redemption proceeds for a Creation Unit will generally consist of Fund Securities - as announced\non the Business Day of the request for a redemption order received in proper form - plus cash in an amount equal to the difference between\nthe NAV of the Shares being redeemed, as next determined after a receipt of a request in proper form, and the value of the Fund Securities,\nless the redemption transaction fee and variable fees described below. Notwithstanding the foregoing, a Fund may substitute a “cash-in-lieu”\namount to replace any Fund Security in certain limited circumstances. “Cash-in-lieu” amounts will only be used in the redemption\nprocess when the use is consistent with applicable law. The amount of cash paid out in such cases will be equivalent to the value of the\ninstrument listed as a Fund Security. In the event that the Fund Securities have a value greater than the NAV of the Shares, a compensating\ncash payment equal to the difference will be included in the Cash Component required to be delivered by an Authorized Participant. In\ndetermining whether a Fund will redeem Creation Units entirely or partially on a cash or in-kind basis (whether for a given day or a given\norder), the key consideration is the benefits that would accrue to a Fund and its investors. Cash redemptions typically require selling\nportfolio instruments, which may result in adverse tax consequences for the remaining Fund shareholders that would not occur with an in-kind\nredemption. As a result, tax considerations may favor use of in-kind redemptions. See “Taxes” below. In addition, as with\npurchases of Creation Units, the Funds may permit an Authorized Participant to receive cash in lieu of some or all of the Fund Securities\nbecause such instruments are not eligible for trading by the Authorized Participant or the investor on whose behalf the Authorized Participant\nis acting.

Redemptions of Shares for Fund\nSecurities will be subject to compliance with applicable U.S. federal and state securities laws, and the Funds reserve the right to redeem\nCreation Units for cash to the extent that a Fund could not lawfully deliver specific Fund Securities upon redemptions or could not do\nso without first registering a Fund Securities under such laws. An Authorized Participant, or a beneficial owner of Shares for which it\nis acting, subject to a legal restriction with respect to a particular security included in the redemption of a Creation Unit may be paid\nan equivalent amount of cash. This would specifically prohibit delivery of Fund Securities that are not registered in reliance upon Rule\n144A under the 1933 Act to a redeeming beneficial owner of Shares that is not a “qualified institutional buyer,” as such term\nis defined under Rule 144A of the 1933 Act. The Authorized Participant may request the redeeming beneficial owner of the Shares to complete\nan order form or to enter into agreements with respect to such matters as compensating cash payment.

The right of redemption may\nbe suspended or the date of payment postponed with respect to the Funds: (i) for any period during

which the NYSE is closed (other than customary weekend\nand holiday closings); (ii) for any period during which trading on the NYSE is suspended or restricted; (iii) for any period during which\nan emergency exists as a result of which disposal by a Fund of securities it owns or determination of the Fund’s NAV is not reasonably\npracticable; or (iv) in such other circumstances as permitted by the SEC.

If a Fund determines, based\non information available to the Fund when a redemption request is submitted by an Authorized Participant, that (i) the short interest\nof the Fund in the marketplace is greater than or equal to 100% and (ii) the orders in the aggregate from all Authorized Participants\nredeeming fund Shares on a Business Day represent 25% or more of the outstanding Shares of the Fund, such Authorized Participant will\nbe required to verify to the Fund the accuracy of its representations that are deemed to have been made by submitting a request for redemption.

If, after receiving notice of\nthe verification requirement, the Authorized Participant does not verify, with respect to any portion of the Shares of a Fund requested\nto be redeemed, the accuracy of the Authorized Participant’s representations that are deemed to have been made by submitting a redemption\nrequest, the Fund reserves the right to reject that portion of the redemption request. Deliveries of redemption proceeds by a Fund are\ngenerally made within one Business Day (i.e., “T+1”). Each Fund reserves the right\nto settle redemption transactions on a basis other than T+1, if necessary or appropriate under the circumstances. Delayed settlement may\noccur due to a number of different reasons, including, without limitation, settlement cycles for the underlying securities, unscheduled\nmarket closings, an effort to link distribution to dividend record dates and ex-dates and newly announced holidays. For example, the redemption\nsettlement process may be extended beyond T+1 because of the occurrence of a holiday in the U.S. bond market that is not a holiday observed\nin the U.S. equity market.

REDEMPTION\nTRANSACTION FEE

All persons redeeming Creation\nUnits are expected to incur a transaction fee to offset transfer and other transaction costs that may be incurred by the relevant Fund.\nThe basic in-kind redemption transaction fee of $300 for the Funds ($300 for cash redemptions), charged by and payable to the Custodian,\nis the same no matter how many Creation Units are being redeemed pursuant to any one redemption request. An additional variable charge\nfor cash redemptions or partial cash redemptions (when cash redemptions are permitted or required for a Fund) may also be imposed to compensate\nthe Fund for the costs associated with selling the applicable securities. As a result, in order to seek to replicate the in-kind redemption\norder process, the Funds expect to sell, in the secondary market, the portfolio securities or settle any financial instruments that may\nnot be permitted to be re-registered in the name of the Participating Party as a result of an in-kind redemption order pursuant to local\nlaw or market convention, or for other reasons (“Market Sales”). In such cases where a Fund makes Market Sales, the Authorized\nParticipant will reimburse the Fund for, among other things, any difference between the market value at which the securities and/or financial\ninstruments were sold or settled by the Fund and the cash in lieu amount (which amount, at the Adviser’s discretion, may be capped),\napplicable registration fees, brokerage commissions and certain taxes (“Transaction Costs”). The Adviser may adjust the transaction\nfee to the extent the composition of the redemption securities changes or cash in lieu is added to the Cash Component to protect ongoing\nshareholders. In no event will fees charged by the Fund in connection with a redemption exceed 2% of the value of each Creation Unit.\nInvestors who use the services of a broker-dealer or other such intermediary may be charged a fee for such services. To the extent a Fund\ncannot recoup the amount of Transaction Costs incurred in connection with a redemption from the redeeming shareholder because of the 2%\ncap or otherwise, those Transaction Costs will be borne by the Fund’s remaining shareholders and negatively affect a Fund’s\nperformance.

PLACEMENT\nOF REDEMPTION\nORDERS USING\nTHE CLEARING\nPROCESS

Orders to redeem Creation Units\nof a Fund through the Clearing Process, if available, must be delivered through a Participating Party that has executed the Authorized\nParticipant Agreement. An order to redeem Creation Units of the Funds using the Clearing Process is deemed received on the Transmittal\nDate if (i) such order is received by the Transfer Agent by 2:00 p.m. Eastern Time on each Business Day on such Transmittal Date; and\n(ii) all other procedures set forth in the Authorized Participant Agreement are properly followed; such order will be effected based on\nthe NAV of a Fund as next determined. All orders must be accepted by the Distributor in accordance with the procedures set forth in the\nAuthorized Participant Agreement. An order to redeem Creation Units of the Funds using the Clearing Process made in proper form but received\nby a Fund after 2:00 p.m. Eastern Time on each Business Day will be deemed received on the next Business Day immediately following the\nTransmittal Date. The requisite Fund Securities (or contracts to purchase such Fund Securities which are expected to be delivered in a\n“regular way” manner) and the applicable cash payment will be transferred within two Business Days following the date on which\nsuch request for redemption is deemed received.

PLACEMENT\nOF REDEMPTION\nORDERS OUTSIDE\nTHE CLEARING\nPROCESS

Arrangements satisfactory to\na Fund must be in place for the Participating Party to transfer the Creation Units through the DTC on or before the settlement date. Redemptions\nof Shares for Fund Securities will be subject to compliance with applicable U.S. federal and state securities laws and the Funds (whether\nor not it otherwise permits or requires cash redemptions) reserves the right to redeem Creation Units for cash to the extent that a Fund\ncould not lawfully deliver specific Fund Securities upon redemptions or could not do so without first registering a Fund Securities under\nsuch laws. In connection with taking delivery of Shares for Fund Securities upon redemption of Creation Units, a redeeming shareholder\nor entity acting on behalf of a redeeming shareholder must maintain appropriate

custody arrangements with a qualified broker-dealer,\nbank or other custody providers in each jurisdiction in which any of the Fund Securities are customarily traded, to which account such\nFund Securities will be delivered. If neither the redeeming shareholder nor the entity acting on behalf of a redeeming shareholder has\nappropriate arrangements to take delivery of a Fund Securities in the applicable foreign jurisdiction and it is not possible to make other\nsuch arrangements, or if it is not possible to effect deliveries of the Fund Securities in such jurisdictions, a Fund may, in its discretion,\nexercise its option to substitute a “cash-in-lieu” amount for such Fund Securities, and the redeeming shareholder will be\nrequired to receive its redemption proceeds with respect to such Fund Securities in cash.

CUSTOM\nBASKETS

Creation and redemption baskets\nmay differ and the Funds may in the future accept “custom baskets.” A custom basket may include any of the following: (i)\na basket that is composed of a selection of a Fund’s portfolio holdings rather than all Fund holdings; (ii) a representative basket\nthat is different from the initial basket used in transactions on the same business day; or (iii) a basket that contains bespoke cash\nsubstitutions for a single Authorized Participant. Each Fund has adopted policies and procedures that govern the construction and acceptance\nof baskets. Such policies and procedures provide the parameters for the construction and acceptance of custom baskets that are in the\nbest interests of a Fund and its shareholders, establish processes for revisions to, or deviations from, such parameters, and specify\nthe titles and roles of the employees of the Adviser who are required to review each custom basket for compliance with those parameters.\nIn addition, when constructing custom baskets for redemptions, the tax efficiency of a Fund may be taken into account.

DISTRIBUTION\nOF SHARES

In connection with each Fund’s\nlaunch, the Fund was seeded through the sale of one or more Creation Units by the Fund to one or more initial investors. Initial investors\nparticipating in the seeding of a Fund or that purchase Creation Units after a Fund's launch may be Authorized Participants or a lead\nmarket maker, other third-party investors or affiliates of the Fund or the Adviser purchasing from an Authorized Participant. Each such\ninitial investor and any other affiliate of a Fund or the Adviser may sell some or all of the Shares underlying the Creation Unit(s) held\nby them pursuant to the registration statement for a Fund (each, a “Selling Shareholder”), which Shares have been registered\nto permit the resale from time to time after purchase. A Fund will not receive any of the proceeds from the resale by the Selling Shareholders\nof these Shares. Selling Shareholders may sell Shares owned by them directly or through broker-dealers, in accordance with applicable\nlaw, on any national securities exchange on which the Shares may be listed or quoted at the time of sale, through trading systems, in\nthe over-the-counter market or in transactions other than on these exchanges or systems at fixed prices, at prevailing market prices at\nthe time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected through brokerage\ntransactions, privately negotiated trades, block sales, entry into options or other derivatives transactions or through any other means\nauthorized by applicable law. Selling Shareholders may redeem the Shares held in Creation Unit size by them through an Authorized Participant.\nAny Selling Shareholder and any broker-dealer or agents participating in the distribution of Shares may be deemed to be “underwriters”\nwithin the meaning of Section 2(a)(11) of the 1933 Act, in connection with such sales. Any Selling Shareholder and any other person participating\nin such distribution will be subject to any applicable provisions of the 1934 Act and the rules and regulations thereunder.

BOOK\nENTRY ONLY\nSYSTEM

The following information supplements and should\nbe read in conjunction with the section in the Prospectus entitled “How To Buy Shares.”

DTC acts as securities depositary\nfor the Shares. Shares of the Funds are represented by securities registered in the name of DTC or its nominee and deposited with, or\non behalf of, DTC. Certificates will not be issued for Shares.

DTC, a limited-purpose trust\ncompany, was created to hold securities of DTC Participants and to facilitate the clearance and settlement of securities transactions\namong the DTC Participants in such securities through electronic book-entry changes in accounts of the DTC Participants, thereby eliminating\nthe need for physical movement of securities certificates. DTC Participants include securities brokers and dealers, banks, trust companies,\nclearing corporations and certain other organizations, some of whom (and/or their representatives) own DTC. More specifically, DTC is\nowned by a number of its DTC Participants and by the NYSE and FINRA. Access to the DTC system is also available to others such as banks,\nbrokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or\nindirectly (“Indirect Participants”).

Beneficial ownership of Shares\nis limited to DTC Participants, Indirect Participants and persons holding interests through DTC Participants and Indirect Participants.\nOwnership of beneficial interests in Shares (owners of such beneficial interests are referred to herein as “Beneficial Owners”)\nis shown on, and the transfer of ownership is effected only through, records maintained by DTC (with respect to DTC Participants) and\non the records of DTC Participants (with respect to Indirect Participants and Beneficial Owners that are not DTC Participants). Beneficial\nOwners will receive from or through the DTC Participant a written confirmation relating to their purchase of Shares.

Conveyance of all notices, statements\nand other communications to Beneficial Owners is effected as follows. Pursuant to the Depositary Agreement between the Trust and DTC,\nDTC is required to make available to the Trust upon request and for a fee to be charged to the Trust a listing of the Shares holdings\nof each DTC Participant. The Trust shall inquire of each such DTC Participant as to the number of Beneficial Owners holding Shares, directly\nor indirectly, through such DTC Participant. The Trust shall provide each such DTC Participant with copies of such notice, statement or\nother communication, in such form, number and at such place as such DTC Participant may reasonably request, in order that such notice,\nstatement or communication may be transmitted by such DTC Participant, directly or indirectly, to such Beneficial Owners. In addition,\nthe Trust shall pay to each such DTC Participant a fair and reasonable amount as reimbursement for the expenses attendant to such transmittal,\nall subject to applicable statutory and regulatory requirements.

Share distributions shall be\nmade to DTC or its nominee as the registered holder of all Shares. DTC or its nominee, upon receipt of any such distributions, shall credit\nimmediately DTC Participants’ accounts with payments in amounts proportionate to their respective beneficial interests in Shares\nas shown on the records of DTC or its nominee. Payments by DTC Participants to Indirect Participants and Beneficial Owners of Shares held\nthrough such DTC Participants will be governed by standing instructions and customary practices, as is now the case with securities held\nfor the accounts of customers in bearer form or registered in a “street name,” and will be the responsibility of such DTC\nParticipants.

The Trust has no responsibility\nor liability for any aspects of the records relating to or notices to Beneficial Owners, or payments made on account of beneficial ownership\ninterests in such Shares, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests or\nfor any other aspect of the relationship between DTC and the DTC Participants or the relationship between such DTC Participants and the\nIndirect Participants and Beneficial Owners owning through such DTC Participants.

DTC may determine to discontinue\nproviding its service with respect to the Shares at any time by giving reasonable notice to the Trust and discharging its responsibilities\nwith respect thereto under applicable law. Under such circumstances, the Trust shall take action either to find a replacement for DTC\nto perform its functions at a comparable cost or, if such a replacement is unavailable, to issue and deliver printed certificates representing\nownership of Shares, unless the Trust makes other arrangements with respect thereto satisfactory to the Exchange. The DTC Participants’\nrules and policies are made publicly available through its website at www.dtcc.com.

DETERMINATION\nOF NET\nASSET VALUE

Except as noted below, investments\nof the Funds in securities traded on a national securities exchange or in the over-the-counter market are valued at the closing price\non the principal exchange or market, typically 4:00 PM EST or, absent such a price, by reference to the latest available bid prices in\nthe principal market in which such securities are normally traded. In December 2020, the Securities and Exchange Commission (“SEC”)\nadopted Rule 2a-5 under the 1940 Act, which establishes requirements for determining fair value in good faith for purposes of the 1940\nAct, including related oversight and reporting requirements. The rule also defines when market quotations are “readily available”\nfor purposes of the 1940 Act, which is the threshold for determining whether the Fund must fair value a security. The Adviser serves as\nthe Fund’s valuation designee for purposes of compliance with Rule 2a-5 under the 1940 Act.

With regard to each of the above-mentioned\nFunds, securities the principal market for which is not a securities exchange are valued at their latest bid quotations in such principal\nmarket. Fixed-income securities are valued by using evaluations provided by an independent pricing service, the use of which has been\napproved by the Valuation Designee. Securities for which an independent pricing service does not provide a current evaluation or provides\na value that does not represent fair value in the judgment of the Valuation Designee are valued at fair value under procedures approved\nby the Board of Trustees. Such procedures may include a yield equivalent or a price produced through use of a pricing matrix. With respect\nto participation certificates (otherwise known as participation notes, equity linked notes, or “widgets”), if the price provided\nby an independent pricing service should reflect a price premium, the market maker (broker) will be contacted to provide the premium and\nthe participation certificate’s price will be adjusted accordingly. Repurchase Agreements are valued at original cost. Open ended\nmutual fund investments will be valued at the most recently calculated NAV. Closed end mutual funds are valued at their market values\nbased upon the latest available sale price or, absent such a price, by reference to the latest available bid prices in the principal market\nin which such securities are normally traded.

The value of a foreign security\nis determined in its national currency as of the close of trading on the foreign exchange or other principal market on which it is traded,\nwhich value is then converted into its U.S. dollar equivalent using the latest foreign exchange bid quotation (from an approved pricing\nvendor) as of the time of NAV calculation. When the closing price is not an accurate representation of value due to events that have occurred\nafter the closing of the primary exchange and prior to the time of NAV calculations (hereinafter, a “Significant Event”),\nthen a market quotation is deemed to not be readily available and the fair value of affected securities will be determined by consideration\nof other factors by the Valuation Designee as detailed below. An example of a common Significant Event is a significant movement in the\nU.S. equity markets following the close of trading on a foreign exchange. The Valuation Designee may predetermine the level of such a\nmovement that will constitute a Significant Event (a “Trigger”) and preauthorize the Trust’s Accounting Agent to utilize\na pricing service (a “Fair Value Pricing Service”) that has been designed to determine a fair value.

Securities and other assets\nfor which market quotations are not readily available (e.g., where an independent pricing service\ndoes not provide a current evaluation or provides a value that does not represent fair value in the judgment of the Valuation Designee)\nwill be valued at fair value using methods approved by the Board of Trustees.

ADDITIONAL\nTAX INFORMATION

This discussion of federal income\ntax consequences is based on the Code and the regulations issued thereunder as in effect on the date of this SAI. New legislation, as\nwell as administrative changes or court decisions, may significantly change the conclusions expressed herein, and may have a retroactive\neffect with respect to the transactions contemplated herein.

It is each Fund’s policy\nto qualify for taxation as a “regulated investment company” (RIC) by meeting the requirements of Subchapter M of the Code.\nBy qualifying as a RIC, each Fund expects to eliminate or reduce to a nominal amount the federal income tax to which it is subject. If\na Fund does not qualify as a RIC under the Code, it will be subject to federal income tax on its net investment income and any net realized\ncapital gains. In addition, a Fund could be required to recognize unrealized gains, pay substantial taxes and interest, and make substantial\ndistributions before requalifying as a RIC.

Each Fund is treated as a separate\nentity for federal income tax purposes. Each Fund intends to qualify as a RIC so that it will be relieved of federal income tax on that\npart of its income that is distributed to shareholders. In order to qualify for treatment as a RIC, a Fund must, among other requirements,\ndistribute annually to its shareholders at least the sum of 90% of its investment company taxable income (generally, net investment income\nplus the excess, if any, of net short-term capital gain over net long-term capital losses) and 90% of its net tax-exempt income. Among\nthese requirements are the following: (i) at least 90% of the Fund’s gross income each taxable year must be derived from dividends,\ninterest, payments with respect to securities loans, and gains from the sale or other disposition of stock, securities or foreign currencies,\nor other income derived with respect to its business of investing in such stock or securities or currencies and net income derived from\nan interest in a qualified publicly traded partnership; (ii) at the close of each quarter of the Fund’s taxable year, at least 50%\nof the value of its total assets must be represented by cash and cash items (including receivables), U.S. government securities, securities\nof other RICs and other securities, with such other securities limited, in respect of any one issuer, to an amount that does not exceed\n5% of the value of the Fund’s assets and that does not represent more than 10% of the outstanding voting securities of such issuer;\nand (iii) at the close of each quarter of the Fund’s taxable year, not more than 25% of the value of its assets may be invested\nin securities (other than U.S. government securities or the securities of other RICs) of any one issuer or of two or more issuers and\nwhich are engaged in the same, similar, or related trades or businesses if the Fund owns at least 20% of the voting power of such issuers,\nor the securities of one or more qualified publicly traded partnerships.

Certain master limited partnerships\nmay qualify as “qualified publicly traded partnerships” for purposes of the Subchapter M diversification rules described above.\nTo do so, the master limited partnership must satisfy two requirements during the taxable year. First, the interests of such partnership\neither must be traded on an established securities market or must be readily tradable on a secondary market (or the substantial equivalent\nthereof). Second, the partnership must meet the 90% gross income requirements for the exception from treatment as a corporation with gross\nincome other than income consisting of dividends, interest, payments with respect to securities loans, or gains from the sale or other\ndisposition of stock or securities or foreign currencies, or other income derived with respect to its business of investing in such stock\nsecurities or currencies.

The Code imposes a non-deductible\nexcise tax on RICs that do not distribute in a calendar year (regardless of whether they otherwise have a non-calendar taxable year) an\namount equal to 98% of their “ordinary income” (as defined in the Code) for the calendar year plus 98.2% of their net capital\ngain for the one-year period ending on October 31 of such calendar year, plus any undistributed amounts from prior years. The non-deductible\nexcise tax is equal to 4% of the deficiency. For the foregoing purposes, a Fund is treated as having distributed any amount on which it\nis subject to income tax for any taxable year ending in such calendar year and certain amounts with respect to which estimated taxes are\npaid in such calendar year. A Fund may in certain circumstances be required to liquidate Fund investments to make sufficient distributions\nto avoid federal excise tax liability at a time when the investment adviser might not otherwise have chosen to do so, and liquidation\nof investments in such circumstances may affect a Fund’s ability to satisfy the requirements for qualification as a RIC.

Dividends and interest received\nfrom a Fund’s holding of foreign securities may give rise to withholding and other taxes imposed by foreign countries. Tax conventions\nbetween certain countries and the United States may reduce or eliminate such taxes. If a Fund meets certain requirements, which include\na requirement that more than 50% of the value of the Fund’s total assets at the close of its taxable year consists of stocks or\nsecurities of foreign corporations, then the Fund would be eligible to file an election with the IRS that may enable shareholders, in\neffect, to receive either the benefit of a foreign tax credit, or a tax deduction, but not both, with respect to any foreign and

U.S. possessions income taxes\npaid by the Fund, subject to certain limitations. Pursuant to this election, the Fund would treat those taxes as dividends paid to its\nshareholders.

Each such shareholder will be\nrequired to include a proportionate share of those taxes in gross income as income received from

a foreign source and must treat the amount so included\nas if the shareholder had paid the foreign tax directly. The shareholder may then, subject to certain limitations, either deduct the taxes\ndeemed paid by him or her in computing his or her taxable income or, alternatively, use the foregoing information in calculating any foreign\ntax credit the shareholder may be entitled to use against such shareholder’s federal income tax. If a Fund makes this election,\nthe Fund will report annually to its shareholders the respective amounts per share of the Fund’s income from sources within, and\ntaxes paid to, foreign countries and U.S. possessions.

A Fund’s transactions\nin foreign currencies and forward foreign currency contracts will be subject to special provisions of the Code that, among other things,\nmay affect the character of gains and losses realized by the Fund (i.e., may affect whether gains\nor losses are ordinary or capital), accelerate recognition of income to the Fund and defer losses. These rules could therefore affect\nthe character, amount and timing of distributions to shareholders. These provisions also may require a Fund to mark-to-market certain\ntypes of positions in its portfolio (i.e., treat them as if they were closed out) which may cause\nthe Fund to recognize income without receiving cash with which to make distributions in amounts necessary to satisfy the RIC distribution\nrequirements for avoiding income and excise taxes. Each Fund intends to monitor its transactions, intends to make the appropriate tax\nelections, and intends to make the appropriate entries in its books and records when it acquires any foreign currency or forward foreign\ncurrency contract in order to mitigate the effect of these rules so as to prevent disqualification of the Fund as a RIC and minimize the\nimposition of income and excise taxes.

If a Fund owns shares in certain\nforeign investment entities, referred to as “passive foreign investment companies” or “PFICs,” the Fund will be\nsubject to one of the following special tax regimes: (i) the Fund is liable for U.S. federal income tax, and an additional interest charge,\non a portion of any “excess distribution” from such foreign entity or any gain from the disposition of such shares, even if\nthe entire distribution or gain is paid out by the Fund as a dividend to its shareholders; (ii) if the Fund was able and elected to treat\na PFIC as a “qualified electing fund” or “QEF,” the Fund would be required each year to include in income, and\ndistribute to shareholders in accordance with the distribution requirements set forth above, the Fund’s pro rata share of the ordinary\nearnings and net capital gains of the passive foreign investment company, whether or not such earnings or gains are distributed to the\nFund; or (iii) the Fund may be entitled to mark-to-market annually shares of the PFIC, and in such event would be required to distribute\nto shareholders any such mark-to-market gains in accordance with the distribution requirements set forth above. The QEF and mark-to-market\nelections may accelerate the recognition of income (without the receipt of cash) and increase the amount required to be distributed by\nthe Fund to avoid taxation. Making either of these elections therefore may require the Fund to liquidate other investments (including\nwhen it is not advantageous to do so) to meet its distribution requirement, which also may accelerate the recognition of gain and affect\nthe Fund’s total returns.

A PFIC is any foreign corporation\nif (i) 75% of more of the corporation’s income for a taxable year is passive income, or (ii) 50% or more of the average percentage\nof the corporation’s assets (generally by value, but by adjusted tax basis in certain cases) produce or are held for the production\nof passive income. Generally, passive income for this purpose means dividends, interest (including income equivalent to interest), royalties,\nrents, annuities, the excess of gains over losses from certain property transactions and commodities transactions, and foreign currency\ngains. Because it is not always possible to identify a foreign corporation as a PFIC, a Fund may incur the tax and interest charges described\nabove in some instances.

A Fund’s transactions\nin futures contracts, forward contracts, foreign currency exchange transactions, options and certain other investment and hedging activities\nmay be restricted by the Code and are subject to special tax rules. In a given case, these rules may accelerate income to a Fund, defer\nits losses, cause adjustments in the holding periods of the Fund’s assets, convert short-term capital losses into long-term capital\nlosses or otherwise affect the character of the Fund’s income. These rules could therefore affect the amount, timing and character\nof distributions to shareholders. Each Fund will endeavor to make any available elections pertaining to these transactions in a manner\nbelieved to be in the best interest of the Fund and its shareholders.

Under Section 988 of the Code,\nspecial rules are provided for certain transactions in a foreign currency other than the taxpayer’s functional currency (i.e.,\nunless certain special rules apply, currencies other than the U.S. dollar). In general, foreign currency gains or losses from forward\ncontracts, from futures contracts that are not “regulated futures contracts,” and from unlisted options will be treated as\nordinary income or loss under Section 988 of the Code. Also, certain foreign exchange gains or losses derived with respect to foreign\nfixed income securities are also subject to Section 988 treatment. In general, therefore, Section 988 gains or losses will increase or\ndecrease the amount of a Fund’s investment company taxable income available to be distributed to shareholders as ordinary income,\nrather than increasing or decreasing the amount of the Fund’s net capital gain.

Each Fund is required for federal\nincome tax purposes to mark-to-market and recognize as income for each taxable year its net unrealized gains and losses on certain futures\ncontracts as of the end of the year as well as those actually realized during the year. Gain or loss from futures and options contracts\non broad-based indexes required to be marked-to-market will be 60% long-term and 40% short-term capital gain or loss. Application of this\nrule may alter the timing and character of distributions to shareholders. A Fund may be required to defer the recognition of losses on\nfutures contracts, options contracts and swaps to the extent of any unrecognized gains on offsetting positions held by the Fund. It is\nanticipated that any net gain realized from the closing out of futures or options contracts will be considered gain from the sale of securities\nand therefore will be qualifying income for purposes of the 90% requirement described above. Each Fund distributes to shareholders at\nleast annually any net capital gains which have been recognized for federal income tax purposes, including unrealized gains at the end\nof the Fund’s fiscal year on futures or options transactions. Such distributions are combined with distributions of capital gains\nrealized on the Fund’s other investments and shareholders are advised on the nature of the distributions.

EXEMPT-INTEREST DIVIDENDS. The\nTax-Free Bond Funds generally expect most of their income dividends to be exempt- interest dividends. A Fund will be qualified to pay\nexempt-interest dividends to its shareholders only if, at the close of each quarter of the Fund’s taxable year, at least 50% of\nthe total value of the Fund’s assets consists of securities generating interest that is exempt from federal income tax under Section\n103(a) of the Code. Such dividends may not exceed, in the aggregate, the net interest a Fund receives during the taxable year from securities\nexempt from regular federal income tax. Generally, exempt-interest dividends will be excluded from a shareholder’s gross income\nfor federal income tax purposes, but may be taxable for federal alternative minimum tax purposes for individual shareholders and for state\nand local tax purposes. In particular, if a Fund invests in “private activity bonds,” certain shareholders may become subject\nto alternative minimum tax on the part of the Fund’s distributions derived from interest on such bonds.

As a matter of policy, under\nnormal market conditions, not more than 10% of a Fund’s total assets will be invested in securities the interest on which is treated\nas a preference item for purposes of the federal alternative minimum tax for individuals. Individual shareholders subject to the alternative\nminimum tax should consult their tax advisers regarding the potential alternative minimum tax implications of holding Shares of a Fund.

A Fund that is qualified to\npay exempt-interest dividends will notify investors in a written statement of the percentage of its income distributions reported as tax-exempt.\nThe percentage is applied uniformly to all income distributions made during the year. The percentage of income designated as tax-exempt\nfor any particular distribution may be substantially different from the percentage of the Fund’s income that was tax-exempt during\nthe period covered by the distribution. Thus, a shareholder who holds Shares for only part of the year may be allocated more or less tax-exempt\ndividends than would be the case if the allocation were based on the ratio of net tax-exempt income to total net investment income actually\nearned while a shareholder.

If a shareholder receives an\nexempt-interest dividend with respect to any Share held by the shareholder for six months or less, any loss on the sale or exchange of\nsuch Share will generally be disallowed to the extent of the amount of such exempt-interest dividend. This loss disallowance rule does\nnot apply to a shareholder’s disposition of Fund shares held for six months or less with respect to a regular exempt-interest dividend\npaid by the Fund if the Fund declares substantially all of its net tax-exempt income as exempt- interest dividends on a daily basis and\npays such dividends on at least a monthly basis.

In certain limited instances,\nthe portion of Social Security or railroad retirement benefits that may be subject to federal income taxation may be affected by the amount\nof tax-exempt interest income, including exempt-interest dividends, received by a shareholder. Shareholders who receive Social Security\nor railroad retirement benefits should consult their tax advisers to determine what effect, if any, an investment in a Fund may have on\nthe federal taxation of their benefits.

Part or all of the interest\non indebtedness, if any, incurred or continued by a shareholder to purchase or carry Shares of a Fund paying exempt-interest dividends\nwill not be deductible. The portion of interest that is not deductible is generally equal to the total interest paid or accrued on the\nindebtedness multiplied by the percentage of the Fund’s total dividends (excluding Capital Gain Dividends) paid to the shareholder\nthat consist of exempt-interest dividends. Under rules used by the IRS to determine when borrowed funds are considered used for the purpose\nof purchasing or carrying particular assets, the purchase of Shares may be considered to have been made with borrowed funds even though\nsuch funds are not directly traceable to the purchase of Shares.

In general, exempt-interest\ndividends, if any, attributable to interest received on certain private activity obligations and certain industrial development bonds\nwill not be tax-exempt to any shareholders who are “substantial users” of the facilities financed by such obligations or bonds\nor who are “related persons” of such substantial users. The term “substantial user” is defined under U.S. Treasury\nRegulations to include a non-exempt person who regularly uses a part of such facilities in his trade or business, and whose gross revenues\nderived with respect to the facilities financed by the issuance of bonds represent more than 5% of the total revenues derived by all users\nof such facilities, or who occupies more than 5% of the usable area of such facilities, or for whom such facilities or a part thereof\nwere specifically constructed, reconstructed or acquired. “Related persons” include certain related natural persons, affiliated\ncorporations, a partnership and its partners and an S Corporation and its shareholders. Each shareholder who may be considered a “substantial\nuser” should consult a tax adviser with respect to whether exempt-interest dividends would retain the exclusion under Section 103\nof the Code if the shareholder were treated as a “substantial user” or a “related person.”

If a Fund intends to be qualified\nto pay exempt-interest dividends, the Fund may be limited in its ability to enter into taxable transactions involving forward commitments,\nrepurchase agreements, financial futures and options contracts on financial futures, tax- exempt bond indices and other assets.

The Funds may acquire puts with\nrespect to Tax-Exempt Obligations held in the portfolios. See “INVESTMENT OBJECTIVES AND POLICIES - Additional Information on Portfolio\nInstruments - Puts” in this SAI. The policy of each of the Tax-Free Bond Funds is to limit the acquisition of puts to those under\nwhich the Fund will be treated for federal income tax purposes as the owner of the Tax-Exempt Obligations subject to the put and the interest\non the Tax-Exempt Obligations will be tax- exempt to the Fund. Although the IRS has issued a published ruling that provides some guidance\nregarding the tax consequences of the purchases of puts,

there is currently no guidance available from the\nIRS that definitively establishes the tax consequences of many of the types of puts that the Tax-Free Bond Funds could acquire under the\n1940 Act. Therefore, although the Tax-Free Bond Funds will only acquire a put after concluding that the put will have the tax consequences\ndescribed above, the IRS could reach a different conclusion from that of the Tax-Free Bond Funds. If a Tax-Free Bond Fund were not treated\nas the owner of the relevant Tax-Exempt Obligations, income from such securities would probably not be tax exempt.

Distributions made by a Tax-Free\nBond Fund derived from taxable income and gains may result in federal income taxes (as described under “Distributions” above)\nand/ or state income or other taxes. Depending upon the extent of their activities in states and localities in which their offices are\nmaintained, in which their agents or independent contractors are located, or in which they are otherwise deemed to be conducting business,\nFunds may be subject to the tax laws of such states or localities. Shareholders are advised to consult their tax advisers concerning the\napplication of state and local taxes to distributions received from a Fund.

Some debt obligations with a\nfixed maturity date of more than one year from the date of issuance (and zero-coupon debt obligations with a fixed maturity date of more\nthan one year from the date of issuance) will be treated as debt obligations that are issued originally at a discount. Generally, the\namount of the original issue discount (“OID”) is treated as interest income and is included in a Fund’s income (and\nrequired to be distributed by a Fund) over the term of the debt security, even though payment of that amount by the issuer is not received\nuntil a later time, usually when the debt security matures. In addition, payment-in-kind securities will give rise to income which is\ntaxable and is required to be distributed even though a Fund holding the security receives no interest payment in cash on the security\nduring the year.

Moreover, some debt obligations\nwith a fixed maturity date of more than one year from the date of issuance that are acquired by a Fund in the secondary market may be\ntreated as having market discount. Very generally, market discount is the excess of the stated redemption price of a debt obligation (or\nin the case of an obligation issued with OID, its “revised issue price”) over the purchase price of such obligation. Generally,\nany gain recognized on the disposition of, and any partial payment of principal on, a debt security having market discount is treated\nas ordinary income to the extent the gain, or principal payment, does not exceed the “accrued market discount” on such debt\nsecurity. Alternatively, a Fund may elect to accrue market discount currently, in which case the Fund will be required to include the\naccrued market discount in the Fund’s income (as ordinary income) and thus distribute it over the term of the debt security, even\nthough payment of that amount is not received until a later time, upon partial or full repayment or disposition of the debt security.\nThe rate at which the market discount accrues, and thus is included in the Fund’s income, will depend upon which of the permitted\naccrual methods the Fund elects. Some debt obligations with a fixed maturity date of one year or less from the date of issuance may be\ntreated as having acquisition discount (very generally, the excess of the stated redemption price over the purchase price), or OID in\nthe case of certain types of debt obligations. Generally, a Fund will be required to include the acquisition discount or OID in income\n(as ordinary income) over the term of the debt security, even though payment of that amount by the issuer is not received until a later\ntime, usually when the debt obligation matures. The Fund may make one or more of the elections applicable to debt obligations having acquisition\ndiscount or OID, which could affect the character and timing of recognition of income by the Fund with respect to such debt obligations.

If a Fund holds the foregoing\nkinds of obligations, or other debt obligations subject to special rules under the Code, it may be required to pay out as an income distribution\neach year an amount which is greater than the total amount of cash interest the Fund actually received. Such distributions may be made\nfrom the cash assets of a Fund or by disposing of portfolio securities, including when it is not advantageous to do so, that the Fund\nwould otherwise have continued to hold. A Fund may realize gains or losses from such dispositions. These dispositions may cause a Fund\nto realize higher amounts of short-term capital gains (generally taxed to shareholders at ordinary income tax rates) and, in the event\nthe Fund realizes net capital gains from such transactions, its shareholders may receive a larger Capital Gain Dividend than if the Fund\nhad not held such obligations.

Very generally, where a Fund\npurchases a bond at a price that exceeds the redemption price at maturity (i.e., a premium), the\npremium is amortizable over the remaining term of the bond. In the case of a taxable bond, if a Fund makes an election applicable to all\nsuch bonds it purchases, which election is irrevocable without consent of the IRS, the Fund reduces the current taxable income from the\nbond by the amortized premium and reduces its tax basis in the bond by the amount of such offset; upon the disposition or maturity of\nsuch bonds acquired on or after January 4, 2013, the Fund is permitted to deduct any remaining premium allocable to a prior period. In\nthe case of a tax-exempt bond, tax rules require a Fund to reduce its tax basis by the amount of amortized premium.

A Fund may invest in debt obligations\nthat are in the lowest rating categories or are unrated, including debt obligations of issuers not currently paying interest or who are\nin default. Investments in debt obligations that are at risk of or in default present special tax issues for a Fund. Tax rules are not\nentirely clear about issues such as whether and to what extent a Fund should recognize market discount on a debt obligation, when a Fund\nmay cease to accrue interest, OID or market discount, when and to what extent a Fund may take deductions for bad debts or worthless securities\nand how a Fund should allocate payments received on obligations in default between principal and income. These and other related issues\nwill be addressed by each Fund when, as and if it invests in such securities, in order to seek to ensure that it distributes sufficient\nincome to preserve its status as a RIC and does not become subject to federal income or excise tax.

A portion of the OID on certain\nhigh-yield discount obligations may not be deductible to the issuer. If a portion of the OID on such high-yield discount obligations is\nnot deductible, that portion will be treated as a dividend for purposes of the corporate dividends-received deduction. In such cases,\nif an issuer of the high-yield discount obligations is a domestic corporation, dividend payments by a Fund may be eligible for the corporate\ndividends-received deduction to the extent attributable to the deemed dividend portion of such OID.

Certain of the Funds may invest\nin equity securities of issuers qualifying as REITs under Subchapter M of the Code. A Fund’s investments in REIT equity securities\nmay result in the Fund’s receipt of cash in excess of the REIT’s earnings; if the Fund distributes these amounts, the distributions\ncould constitute a return of capital to Fund shareholders for federal income tax purposes. Dividends received by a Fund from a REIT will\nnot qualify for the corporate dividends-received deduction and generally will not constitute qualified dividend income.

Distributions by a Fund to its\nshareholders that the Fund properly reports as “section 199A dividends,” as defined and subject to certain conditions described\nbelow, are treated as qualified REIT dividends in the hands of non-corporate shareholders. Non-corporate shareholders are permitted a\nfederal income tax deduction equal to 20% of qualified REIT dividends received by them, subject to certain limitations. Currently, eligible\nnon-corporate shareholders can claim the deduction for tax years beginning after December 31, 2017, and ending on or before December 31,\n2025. Very generally, a “section 199A dividend” is any dividend or portion thereof that is attributable to certain dividends\nreceived by the RIC from REITs, to the extent such dividends are properly reported as such by the RIC in a written notice to its shareholders.\nA section 199A dividend is treated as a qualified REIT dividend only if the shareholder receiving such dividend holds the dividend-paying\nRIC shares for at least 46 days of the 91-day period beginning 45 days before the shares become ex-dividend, and is not under an obligation\nto make related payments with respect to a position in substantially similar or related property. A Fund is permitted to report such part\nof its dividends as section 199A dividends as are eligible, but is not required to do so.

A Fund may invest directly or\nindirectly in residual interests in real estate mortgage investment conduits (“REMICs”), including by investing in residual\ninterests in collateralized mortgage obligations (“CMOs”) with respect to which an election to be treated as a REMIC is in\neffect, or equity interests in taxable mortgage pools (“TMPs”). Under a notice issued by the IRS in October 2006 and Treasury\nRegulations that have yet to be issued but may apply retroactively, a portion of a Fund’s income (including income allocated to\nthe Fund from a REIT or other pass-through entity) that is attributable to a residual interest in a REMIC or an equity interest in a TMP\n(referred to in the Code as an “excess inclusion”) will be subject to federal income tax in all events. This notice also provides,\nand the Regulations are expected to provide, that excess inclusion income of a RIC, such as a Fund, will be allocated to shareholders\nof the RIC in proportion to the dividends received by such shareholders, with the same consequences as if the shareholders held the related\nREMIC residual interest directly. As a result, a Fund may not be a suitable investment for charitable remainder trusts, as noted below.

Investments in certain income\ntrusts may be limited by a Fund’s intention to qualify as RIC under the Code and may bear on the Fund’s ability to so qualify.\nIn particular, where, as is frequently the case, U.S. royalty trusts are treated as grantor trusts for federal income tax purposes, they\ngenerally pass through tax items such as income, gain or loss to interest-holders on a gross basis. An applicable Fund monitors the individual\nunderlying items of income that it receives from such trusts to determine how it will characterize such income for purposes of meeting\nthe 90% gross income requirement applicable to RICs described above.

Capital losses in excess of\ncapital gains (net capital losses) are not permitted to be deducted against a Fund’s net investment income. Instead, potentially\nsubject to certain limitations, a Fund may carry net capital losses from any taxable year forward to subsequent taxable years to offset\ncapital gains, if any, realized during such subsequent taxable years. Capital loss carryforwards are reduced to the extent they offset\ncurrent-year net realized capital gains, whether the Fund retains or distributes such gains. Capital loss carryforwards will be carried\nforward to one or more subsequent taxable years without expiration to offset capital gains realized during such subsequent taxable years;\nany such carryforward losses will retain their character as short-term or long-term.

FEDERAL INCOME TAX INFORMATION\nFOR SHAREHOLDERS. The discussion of federal income taxation presented below supplements the discussion in the Funds’ prospectus\nand only summarizes some of the important federal tax considerations generally affecting shareholders of the Funds. Accordingly, prospective\ninvestors (particularly those not residing or domiciled in the United States) should consult their own tax advisors regarding the consequences\nof investing in the Funds.

Any dividends declared by a\nFund in October, November or December and paid the following January are treated, for tax purposes, as if they were received by shareholders\non December 31 of the year in which they were declared. In general, distributions by a Fund of investment company taxable income other\nthan exempt-interest dividends (described above) whether received in cash or additional shares, will be taxable to you as ordinary income.\nA portion of these distributions may be treated as qualified dividend income (eligible for the reduced rates to individuals as described\nbelow) to the extent that the Fund receives qualified dividend income. Qualified dividend income is, in general, dividend income from\ntaxable domestic corporations and certain foreign corporations (e.g., foreign corporations incorporated\nin a possession of the United States or in certain countries with a comprehensive tax treaty with the United States, or the stock of which\nis readily tradable on an established securities market in the United States). A dividend will not be treated as qualified dividend income\nto the extent that (i) the shareholder has not held the Shares of the Fund on which the dividend was paid for more than 60 days during\nthe 121-day period that begins on the date that is 60 days before the date on which the Shares of the Fund

become ex-dividend with respect to such dividend\n(and the Fund also satisfies those holding period requirements with respect to the securities it holds that paid the dividends distributed\nto the shareholder), (ii) the shareholder is under an obligation (whether pursuant to a short sale or otherwise) to make related payments\nwith respect to substantially similar or related property, or (iii) the shareholder elects to treat such dividend as investment income\nunder section 163(d)(4)(B) of the Code. Dividends received by a Fund from a REIT or another RIC may be treated as qualified dividend income\nonly to the extent the dividend distributions are attributable to qualified dividend income received by such REIT or RIC. It is expected\nthat dividends received by a Fund from a REIT and distributed to a shareholder generally will be taxable to the shareholder as ordinary\nincome.

Distributions from net capital\ngain (if any) that are reported as capital gains dividends are taxable as long-term capital gains without regard to the length of time\nthe shareholder has held Shares of the Fund. However, if you receive a capital gains dividend with respect to Fund Shares held for six\nmonths or less, any loss on the sale or exchange of those Shares shall, to the extent of the capital gains dividend, be treated as a long-term\ncapital loss. The maximum individual rate applicable to “qualified dividend income” and long-term capital gains is generally\neither 15% or 20% depending on whether the individual’s income exceeds certain threshold amounts. The IRS and the Department of\nthe Treasury have issued regulations that impose special rules in respect of capital gain dividends received through partnership interests\nconstituting “applicable partnership interests” under Section 1061 of the Code.

An additional 3.8% Medicare\ntax is imposed on certain net investment income (including ordinary dividends and capital gain distributions received from a Fund and\nnet gains from redemptions or other taxable dispositions of Fund Shares), other than exempt-interest dividends, of U.S. individuals, estates\nand trusts to the extent that such person’s “modified adjusted gross income” (in the case of an individual) or “adjusted\ngross income” (in the case of an estate or trust) exceeds a threshold amount.

At the beginning of every year,\nthe Funds will provide shareholders with a tax reporting statement containing information detailing the estimated tax status of any distributions\nthat the Funds paid during the previous calendar year. REITs in which a Fund invests often do not provide complete and final tax information\nto the Fund until after the time that the Fund issues the tax reporting statement. As a result, a Fund may at times find it necessary\nto reclassify the amount and character of its distributions to you after it issues your tax reporting statement. When such reclassification\nis necessary, the Fund will send you a corrected, final Form 1099-DIV to reflect the reclassified information. If you receive a corrected\nForm 1099-DIV, use the information on this corrected form, and not the information on the previously issued tax reporting statement in\ncompleting your tax returns.

Each Fund will inform you of the amount of your ordinary\nincome dividends and capital gain distributions, if any, at the time they are paid and will advise you of its tax status for federal income\ntax purposes, including what portion of the distributions will be qualified dividend income, shortly after the close of each calendar\nyear.

If a Fund makes a distribution\nto a shareholder in excess of the Fund’s current and accumulated earnings and profits in any taxable year, the excess distribution\nwill be treated as a return of capital to the extent of the shareholder’s tax basis in its Shares, and thereafter, as capital gain.\nA return of capital is not taxable, but reduces a shareholder’s tax basis in its Shares, thus reducing any loss or increasing any\ngain on a subsequent taxable disposition by the shareholder of its Shares. To the extent that a return of capital distribution exceeds\na shareholder’s adjusted basis, the distribution will be treated as gain from the sale of Shares.

For corporate investors in a\nFund, dividend distributions the Fund reports as dividends received from qualifying domestic corporations will be eligible for the 50%\ncorporate dividends-received deduction to the extent they would qualify if the Fund were a regular corporation.

Distributions by a Fund also may be subject to state,\nlocal and foreign taxes, which may differ from the federal income tax treatment described above.

A sale of shares in a Fund may\ngive rise to a gain or loss. In general, any gain or loss realized upon a taxable disposition of shares will be treated as long-term capital\ngain or loss if the shares have been held for more than one year. Otherwise, the gain or loss on the taxable disposition of shares will\nbe treated as short-term capital gain or loss. Any loss realized upon a taxable disposition of shares held for six months or less will\nbe treated as long-term, rather than short-term, to the extent of any long-term capital gain distributions received (or deemed received)\nby the shareholder with respect to the shares. All or a portion of any loss realized upon a taxable disposition of shares will be disallowed\nif other substantially identical shares of the Fund are purchased within 30 days before or after the disposition. In such a case, the\nbasis of the newly purchased shares will be adjusted to reflect the disallowed loss.

An Authorized Participant who\nexchanges securities for Creation Units generally will recognize a gain or a loss. The gain or loss will be equal to the difference between\nthe market value of the Creation Units at the time and the sum of the exchanger’s aggregate basis in the securities surrendered\nplus the amount of cash paid for such Creation Units. A person who redeems Creation Units will generally recognize a gain or loss equal\nto the difference between the exchanger’s basis in the Creation Units and the aggregate market value of any securities received\nplus the amount of any cash received for such Creation Units. The IRS, however, may assert that a loss realized upon an exchange of securities\nfor Creation Units cannot be deducted currently under the rules governing “wash sales” (for a person who does not mark-to-market\nits portfolio) or on the basis that there has been no significant change in economic position.

Any capital gain or loss realized\nupon the exchange of securities for Creation Units will generally be treated as long-term capital gain or loss if the securities exchanged\nfor such Creation Units have been held for more than one year. Any capital gain or loss realized upon the redemption of Creation Units\nwill generally be treated as long-term capital gain or loss if the shares comprising the Creation Units have been held for more than one\nyear. Otherwise, such capital gains or losses will be treated as short-term capital gains or losses. Authorized Participants who are dealers\nin securities are subject to the tax rules applicable to dealers, which may result in tax consequences to such Authorized Participants\ndifferent from those described herein. Any loss upon a redemption of Creation Units held for six months or less will be treated as a long-term\ncapital loss to the extent of any amounts treated as distributions to the applicable Authorized Participant of long-term capital gain\nwith respect to the Creation Units (including any amounts credited to the Authorized Participant as undistributed capital gains). In addition,\nany loss realized upon a redemption of Fund shares held by an Authorized Participant for six months or less generally will be disallowed,\nto the extent of any exempt-interest dividends received by the Authorized Participant with respect to the shares.

Each Fund has the right to reject\nan order for Creation Units if the purchaser (or group of purchasers) would, upon obtaining the shares so ordered, own 80% or more of\nthe outstanding Shares of the Fund and if, pursuant to section 351 of the Code, the Fund would have a basis in the deposit securities\ndifferent from the market value of such securities on the date of deposit. Each Fund also has the right to require information necessary\nto determine beneficial Share ownership for purposes of the 80% determination. Authorized Participants exchanging securities for Creation\nUnits or redeeming Creation Units should consult with their own tax adviser.

Certain tax-exempt shareholders,\nincluding qualified pension plans, individual retirement accounts, salary deferral arrangements, 401(k)s, and other tax-exempt entities,\ngenerally are exempt from federal income taxation except with respect to their unrelated business taxable income (UBTI). Under current\nlaw, the Funds generally serve to block UBTI from being realized by its tax-exempt shareholders. However, notwithstanding the foregoing,\na tax-exempt shareholder could realize UBTI by virtue of its investment in a Fund where, for example, (i) the Fund invests in REITs that\nhold residual interests in REMICs or (ii) its Shares in the Fund constitute debt-financed property in the hands of the tax-exempt shareholder\nwithin the meaning of section 514(b) of the Code. Charitable remainder trusts are subject to special rules and should consult their tax\nadvisors. There are no restrictions preventing the Funds from holding investments in REITs that hold residual interests in REMICs, and\nthe Funds may do so.

In general, excess inclusion\nincome allocated to shareholders (i) cannot be offset by net operating losses (subject to a limited exception for certain thrift institutions),\n(ii) will constitute UBTI to entities subject to tax on UBTI, thereby potentially requiring such an entity that is allocated excess inclusion\nincome, and otherwise might not be required to file a tax return, to file a tax return and pay tax on such income, and (iii) in the case\nof a non-U.S. shareholder, will not qualify for any reduction in federal withholding tax. A shareholder will be subject to U.S. federal\nincome tax on such inclusions notwithstanding any exemption from such income tax otherwise available under the Code.

Non-corporate taxpayers generally\nmay deduct 20% of “qualified business income” derived either directly or through partnerships or S corporations. For this\npurpose, “qualified business income” generally includes ordinary REIT dividends and income derived from MLP investments. A\nfund is permitted to pass through to shareholders the character of ordinary REIT dividends so as to allow non-corporate shareholders to\nclaim this deduction. There currently is no mechanism for a Fund to pass through to non-corporate shareholders the character of income\nderived from MLP investments. It is uncertain whether future legislation or other guidance will enable the Funds to pass through to non-corporate\nshareholders the ability to claim this deduction with respect to income derived from MLP investments.

Foreign Taxes. Income, proceeds\nand gains received by a Fund (or Underlying RICs) from sources within foreign countries may be subject to income, withholding or other\ntaxes imposed by such countries that would reduce the yield on the Fund’s securities. Tax treaties between certain countries and\nthe United States may reduce or eliminate these taxes. If more than 50% of a Fund’s assets at taxable year end consist of the securities\nof foreign corporations, the Fund will be permitted to elect to permit shareholders to claim a credit or deduction on their income tax\nreturns for their pro rata portions of qualified taxes paid by the Fund to foreign countries in respect of foreign securities that the\nFund has held for at least the minimum period specified in the Code. In such a case, shareholders will include in gross income from foreign\nsources their pro rata shares of such taxes paid by the Fund. A shareholder’s ability to claim an offsetting foreign tax credit\nor deduction in respect of foreign taxes paid by the Fund is subject to certain limitations imposed by the Code, which may result in the\nshareholder’s not receiving a full credit or deduction (if any) for the amount of such taxes. Shareholders who do not itemize on\ntheir U.S. federal income tax returns may claim a credit (but not a deduction) for such foreign taxes. Even if a Fund were eligible to\nmake such an election for a given year, it may determine not to do so. Shareholders that are not subject to U.S. federal income tax, and\nthose who invest in the Fund through tax-advantaged accounts (including those who invest through individual retirement accounts or other\ntax-advantaged retirement plans), generally will receive no benefit from any tax credit or deduction passed through by the Fund. Shareholders\nof a Fund generally are not expected to be entitled to claim a credit or deduction with respect to foreign taxes incurred by a Fund.

Foreign Currency-Related Transactions\nand Passive Foreign Investment Companies. A Fund’s transactions in foreign currencies, foreign currency-denominated debt securities\nor certain foreign currency options, futures contracts or forward contracts (or

similar instruments) may give rise to ordinary income\nor loss to the extent such income or loss results from fluctuations in the value of the foreign currency concerned. Such ordinary income\ntreatment may accelerate Fund distributions to shareholders and increase the distributions taxed to shareholders as ordinary income. Any\nnet ordinary losses so created cannot be carried forward by a Fund to offset income or gains earned in subsequent taxable years.

Equity investments by a Fund\nin certain foreign corporations classified for U.S. tax purposes as “passive foreign investment companies” (“PFICs”)\ncould potentially subject the Fund to federal income tax (including interest charges) on distributions received from the PFIC or on proceeds\nreceived from a disposition of shares in the PFIC, which tax could not be eliminated by making distributions to Fund shareholders. However,\na Fund may elect to avoid the imposition of that tax. For example, a Fund may elect in certain cases to treat a PFIC as a “qualified\nelecting fund” (a “QEF election”), in which event the Fund will be required to include in income its share of the PFIC’s\nincome and net capital gains annually, regardless of whether the Fund receives any distributions from the PFIC. A Fund also may make an\nelection to mark any gains (and to a limited extent losses) in its holdings in a PFIC “to the market” as though it had sold\nand, solely for purposes of this mark-to-market election, repurchased its holdings in the PFIC on the last day of the Fund’s taxable\nyear. Such gains and losses are treated as ordinary income and loss. The QEF and mark-to-market elections may accelerate the recognition\nof income (without the receipt of cash) and increase the amount required to be distributed by the Fund to avoid taxation. Making either\nof these elections therefore may require the Fund to liquidate other investments (including when it is not advantageous to do so) to meet\nits distribution requirement, which also may accelerate the recognition of gain and affect the Fund’s total returns. Dividends paid\nby PFICs will not be eligible to be treated as qualified dividend income. Certain Canadian royalty trusts qualify as PFICs. If a Fund\nindirectly invests in PFICs by virtue of the Fund’s investment in other funds, it may not make such PFIC elections; rather, the\nunderlying funds directly investing in the PFICs would decide whether to make such elections.

A PFIC is any foreign corporation\nif (i) 75% of more of the corporation’s income for a taxable year is passive income, or (ii) 50% or more of the average percentage\nof the corporation’s assets (generally by value, but by adjusted tax basis in certain cases) produce or are held for the production\nof passive income. Generally, passive income for this purpose means dividends, interest (including income equivalent to interest), royalties,\nrents, annuities, the excess of gains over losses from certain property transactions and commodities transactions, and foreign currency\ngains. Because it is not always possible to identify a foreign corporation as a PFIC, the Fund may incur the tax and interest charges\ndescribed above in some instances.

Backup Withholding. The Funds\nwill be required in certain cases to withhold at the applicable withholding rate and remit to the U.S. Treasury the withheld amount of\ntaxable dividends and redemption proceeds paid to any shareholder who (1) fails to provide a correct taxpayer identification number certified\nunder penalty of perjury; (2) is subject to withholding by the IRS for failure to properly report all payments of interest or dividends;\n(3) fails to provide a certified statement that he or she is not subject to “backup withholding;” or (4) fails to provide\na certified statement that he or she is a U.S. person (including a U.S. resident alien). Backup withholding is not an additional tax and\nany amounts withheld may be credited against the shareholder’s ultimate U.S. tax liability.

Disclosure for Non-U.S. Shareholders.\nDistributions by a Fund to shareholders that are not “U.S. persons” within the meaning of the Code (“foreign shareholders”)\nproperly reported by a Fund as (1) Capital Gain Dividends, (2) short-term capital gain dividends, and (3) interest- related dividends,\neach as defined and subject to certain conditions described below, generally are not subject to withholding of U.S. federal income tax.

In general, the Code defines\n(1) “short-term capital gain dividends” as distributions of net short-term capital gains in excess of net long-term capital\nlosses and (2) “interest-related dividends” as distributions from U.S.-source interest income of types similar to those not\nsubject to U.S. federal income tax if earned directly by an individual foreign shareholder, in each case to the extent such distributions\nare properly reported as such by a Fund in a written notice to shareholders. The exceptions to withholding for Capital Gain Dividends\nand short-term capital gain dividends do not apply to (A) distributions to an individual foreign shareholder who is present in the United\nStates for a period or periods aggregating 183 days or more during the year of the distribution and (B) distributions attributable to\ngain that is treated as effectively connected with the conduct by the foreign shareholder of a trade or business within the United States,\nunder special rules regarding the disposition of “U.S. real property interests” (“USRPIs”) as described below.\nThe exception to withholding for interest-related dividends does not apply to distributions to a foreign shareholder (A) that has not\nprovided a satisfactory statement that the beneficial owner is not a U.S. person, (B) to the extent that the dividend is attributable\nto certain interest on an obligation if the foreign shareholder is the issuer or is a 10% shareholder of the issuer, (C) that is within\ncertain foreign countries that have inadequate information exchange with the United States, or (D) to the extent the dividend is attributable\nto interest paid by a person that is a related person of the foreign shareholder and the foreign shareholder is a controlled foreign corporation.

If a Fund invests in a RIC that\npays Capital Gain Dividends, short-term capital gain dividends or interest-related dividends to the Fund, such distributions retain their\ncharacter as not subject to withholding if properly reported when paid by the Fund to foreign shareholders. A Fund is permitted to report\nsuch part of its dividends as interest-related and/or short-term capital gain dividends as are eligible, but is not required to do so.

In the case of Shares held through\nan intermediary, the intermediary may withhold even if the Fund reports all or a portion of a payment as an interest-related or short-term\ncapital gain dividend to shareholders. Foreign shareholders should contact their intermediaries regarding the application of these\nrules to their accounts.

Foreign shareholders with respect\nto whom income from a Fund is effectively connected with a trade or business conducted by the foreign shareholder within the United States\nwill in general be subject to U.S. federal income tax on the income derived from the Fund at the graduated rates applicable to U.S. citizens,\nresidents or domestic corporations, whether such income is received in cash or reinvested in Shares of the Fund and, in the case of a\nforeign corporation, may also be subject to a branch profits tax. If a foreign shareholder is eligible for the benefits of a tax treaty,\nany effectively connected income or gain will generally be subject to U.S. federal income tax on a net basis only if it is also attributable\nto a permanent establishment maintained by the shareholder in the United States. More generally, foreign shareholders who are residents\nin a country with an income tax treaty with the United States may obtain different tax results than those described herein, and are urged\nto consult their tax advisors.

Distributions by a Fund to foreign\nshareholders other than Capital Gain Dividends, short-term capital gain dividends, and interest-related dividends (e.g.\ndividends attributable to dividend and foreign-source interest income or to short-term capital gains or U.S. source interest income to\nwhich the exception from withholding described above does not apply) are generally subject to withholding of U.S. federal income tax at\na rate of 30% (or lower applicable treaty rate).

A foreign shareholder is not,\nin general, subject to U.S. federal income tax on gains (and is not allowed a deduction for losses) realized on the sale of shares of\na Fund unless (i) such gain is effectively connected with the conduct by the foreign shareholder of a trade or business within the United\nStates, (ii) in the case of a foreign shareholder that is an individual, the shareholder is present in the United States for a period\nor periods aggregating 183 days or more during the year of the sale and certain other conditions are met, or(iii) the special rules relating\nto gain attributable to the sale or exchange of USRPIs apply to the foreign shareholder’s sale of shares of a Fund (as described\nbelow).

Special rules would apply if\na Fund were a qualified investment entity (“QIE”) because it is either a “U.S. real property holding corporation”\n(“USRPHC”) or would be a USRPHC but for the operation of certain exceptions to the definition of USRPIs described below. Very\ngenerally, a USRPHC is a domestic corporation that holds USRPIs the fair market value of which equals or exceeds 50% of the sum of the\nfair market values of the corporation’s USRPIs, interests in real property located outside the United States, and other trade or\nbusiness assets. USRPIs are generally defined as any interest in U.S. real property and any interest (other than solely as a creditor)\nin a USRPHC or, very generally, an entity that has been a USRPHC in the last five years. A Fund that holds, directly or indirectly, significant\ninterests in REITs may be a USRPHC. Interests in domestically controlled QIEs, including REITs and RICs that are QIEs, not-greater-than\n10% interests in publicly traded classes of stock in REITs and not-greater-than-5% interests in publicly traded classes of stock in RICs\ngenerally are not USRPIs, but these exceptions do not apply for purposes of determining whether a Fund is a QIE. If an interest in a Fund\nwere a USRPI, the Fund would be required to withhold U.S. tax on the proceeds of a share redemption by a greater-than-5% foreign shareholder,\nin which case such foreign shareholder generally would also be required to file U.S. tax returns and pay any additional taxes due in connection\nwith the redemption.

If a Fund were a QIE, under\na special “look-through” rule, any distributions by the Fund to a foreign shareholder (including, in certain cases, distributions\nmade by the Fund in redemption of its Shares) attributable directly or indirectly to (i) distributions received by the Fund from a lower-tier\nRIC or REIT that the Fund is required to treat as USRPI gain in its hands, and (ii) gains realized on the disposition of USRPIs by the\nFund would retain their character as gains realized from USRPIs in the hands of the Fund's foreign shareholders and would be subject to\nU.S. tax withholding. In addition, such distributions could result in the foreign shareholder being required to file a U.S. tax return\nand pay tax on the distributions at regular

U.S. federal income tax rates. The consequences to\na foreign shareholder, including the rate of such withholding and character of such distributions (e.g.,\nas ordinary income or USRPI gain), would vary depending upon the extent of the foreign shareholder’s current and past ownership\nof the Fund.

Foreign shareholders of a Fund\nalso may be subject to “wash sale” rules to prevent the avoidance of the tax-filing and -payment obligations discussed above\nthrough the sale and repurchase of Fund Shares.

The Funds generally do not expect\ntheir Shares to be considered USRPIs. Foreign shareholders should consult their tax advisers and, if holding Shares through intermediaries,\ntheir intermediaries, concerning the application of these rules to their investment in the Funds.

In order to qualify for any\nexemptions from withholding described above or for lower withholding tax rates under income tax treaties, or to establish an exemption\nfrom backup withholding, a foreign shareholder must comply with special certification and filing requirements relating to its non-U.S.\nstatus (including, in general, furnishing an IRS Form W-8BEN, W-8BEN-E or substitute form). Foreign shareholders should consult their\ntax advisers in this regard.

Special rules (including withholding\nand reporting requirements) apply to foreign partnerships and those holding a Fund’s shares through foreign partnerships. Additional\nconsiderations may apply to foreign trusts and estates. Investors holding a Fund’s shares through foreign entities should consult their tax\nadvisers about their particular situation.

A foreign shareholder may be\nsubject to state and local tax and to the U.S. federal estate tax in addition to the U.S. federal income tax referred to above. Other\nReporting and Withholding Obligations. Sections 1471-1474 of the Code and the U.S. Treasury and IRS guidance issued thereunder (collectively,\n“FATCA”) generally require the Fund to obtain information sufficient to identify the status of each of its shareholders under\nFATCA or under an applicable intergovernmental agreement (an “IGA”) between the United States and a foreign government. If\na shareholder fails to provide the requested information or otherwise fails to comply with FATCA or an IGA, the Fund may be required to\nwithhold under FATCA at a rate of 30% with respect to that shareholder on ordinary dividends it pays.\nThe IRS and the Department of Treasury have issued proposed regulations providing that these withholding rules will not apply to\nthe gross proceeds of share redemptions or Capital Gain Dividends the Fund pays. If a payment by the Fund is subject to FATCA withholding,\nthe Fund is required to withhold even if such payment would otherwise be exempt from withholding under the rules applicable to foreign\nshareholders described above (e.g., short-term capital gain dividends and interest-related dividends).

Each prospective investor is\nurged to consult its tax adviser regarding the applicability of FATCA and any other reporting requirements with respect to the prospective\ninvestor’s own situation, including investments through an intermediary.

Reportable Transactions. Under\nU.S. Treasury regulations, if a shareholder recognizes a loss of at least $2 million in any single taxable year or $4 million in any combination\nof taxable years for an individual shareholder or at least $10 million in any single taxable year or $20 million in any combination of\ntaxable years for a corporate shareholder, the shareholder must file with the IRS a disclosure statement on Form 8886. Direct shareholders\nof portfolio securities are in many cases excepted from this reporting requirement, but under current guidance, shareholders of a RIC\nsuch as the Funds are not excepted. Future guidance may extend the current exception from this reporting requirement to shareholders of\nmost or all RICs. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayer’s\ntreatment of the loss is proper. Shareholders should consult their tax advisors to determine the applicability of these regulations in\nlight of their individual circumstances.

ADDITIONAL TAX INFORMATION CONCERNING\nTHE TAX-FREE BOND FUNDS. As indicated in the Prospectuses, the Tax-Free Bond Funds are designed to provide North Carolina and Virginia\nshareholders, respectively, with current tax-exempt interest income. The Funds are not intended to constitute a balanced investment program\nand are not designed for investors seeking capital appreciation or maximum tax-exempt income irrespective of fluctuations in principle.\nShares of the Tax-Free Bond Funds would not be suitable for tax-exempt institutions and may not be suitable for retirement plans qualified\nunder Section 401 of the Code, so-called Keogh or H.R. 10 plans, and individual retirement accounts. Such plans and accounts are generally\ntax-exempt and, therefore, would not realize any benefit from the dividends of the Tax-Free Bond Funds being tax-exempt, and such dividends\nwill be taxable to the beneficiaries of such plans and accounts when distributed to them.

Dividends that are derived from\ninterest on a Fund’s investments in U.S. Government Securities and received by a shareholder who is a North Carolina or Virginia\nresident are currently eligible for exemption from those states’ income taxes. Such dividends may be eligible for exemption from\nthe state and local taxes of other jurisdictions as well, although state and local tax authorities may not agree with this view. However,\nin Virginia as well as in other states, distributions of income derived from repurchase agreements and securities lending transactions\ngenerally will not qualify for exemption from state and local income taxes.

Distributions from the North\nCarolina Intermediate Tax-Free ETF will not be subject to North Carolina income tax if made to individual shareholders residing in North\nCarolina or to trusts or estates subject to North Carolina income tax to the extent such distributions are either (i) attributable to\ninterest on obligations of North Carolina or its political subdivisions, or (ii) attributable to interest on direct obligations of the\nUnited States, or its possessions.

Distributions from the Virginia\nIntermediate Tax-Free ETF will not be subject to Virginia income tax if the Virginia Intermediate Tax-Free ETF pays distributions to shareholders\nthat it derived from interest on debt obligations of Virginia or its political subdivisions, debt obligations of the United States excludable\nfrom Virginia income tax under the laws of the United States, or debt obligations of Puerto Rico, Guam, or the Virgin Islands, which debt\nobligations are backed by the full faith and credit of the borrowing government.

If a shareholder receives an\nexempt-interest dividend with respect to any Share and such Share is held for 6 months or less, any loss on the sale or exchange of such\nShare will be disallowed for North Carolina, and Virginia tax purposes to the extent of the amount of such exempt-interest dividend, even\nthough some portion of such dividend actually may have been subject to North Carolina or Virginia income tax.

Distributions by the Tax-Free\nBond Funds of net long-term capital gains on securities held for more than one year are taxable to shareholders as such, regardless of\nhow long the shareholder has held Shares in a Tax-Free Bond Fund, except distributions which are directly attributable to gains from certain\nobligations of the State of North Carolina and its political subdivisions that were issued before July 1, 1995 are exempt from North Carolina\nstate income tax. Distributions will be taxable as described above even if the NAV of a Share in a Tax-Free Bond Fund is reduced below\nthe shareholder’s cost of that Share by the distribution of income or gain realized on the sale of securities and the distribution\nis, as an economic matter, a return of capital.

Part or all of the interest\non indebtedness incurred by a shareholder to purchase or carry Shares of the North Carolina Intermediate Tax-Free ETF or the Virginia\nIntermediate Tax-Free ETF is not deductible, or requires a modification increasing adjusted gross income, for federal, North Carolina\nor Virginia income tax purposes.

Distributions of exempt-interest\ndividends, to the extent attributable to interest on North Carolina and Virginia Tax-Exempt Obligations and to interest on direct obligations\nof the United States (including territories thereof), are not subject to North Carolina or Virginia individual or corporate income tax.\nDistributions of gains attributable to certain obligations of the State of North Carolina and its political subdivisions issued prior\nto July 1, 1995 are not subject to North Carolina individual or corporate income tax; however, distributions of gains attributable to\nsuch types of obligations that were issued after June 30, 1995 will be subject to North Carolina individual or corporate income tax.

The foregoing is only a summary\nof some of the important federal and state tax considerations generally affecting purchasers of Shares of the Tax-Free Bond Funds. No\nattempt has been made to present a detailed explanation of the federal or state income tax treatment of the Tax-Free Bond Funds or their\nshareholders and this discussion is not intended as a substitute for careful tax planning. Accordingly, potential purchasers of Shares\nof the Tax-Free Bond Funds are urged to consult their tax advisers with specific reference to their own tax situation. In addition, the\nforegoing discussion is based on tax laws and regulations which are in effect on the date of this SAI; such laws and regulations may be\nchanged by legislative or administrative action.

SPECIAL CONSIDERATIONS REGARDING\nINVESTMENT IN NORTH CAROLINA TAX-EXEMPT OBLIGATIONS. The concentration of investments in North Carolina Tax-Exempt Obligations by the\nNorth Carolina Intermediate Tax-Free ETF raises special investment considerations. In particular, changes in the economic condition and\ngovernmental policies of North Carolina and its political subdivisions, agencies, instrumentalities, and authorities could adversely affect\nthe value of the North Carolina Intermediate Tax-Free ETF and its portfolio securities. This section provides a brief summary of recent\neconomic trends in North Carolina. The information set forth below is derived from official statements of the North Carolina government\nand other sources that are generally available to investors. Sterling Capital Funds has not independently verified this information.

Economy. North Carolina’s\neconomy is relatively diverse and includes a major banking center, a strong agricultural sector, an active trade sector, and a developing\nservice sector. According to the most recent North Carolina Annual Comprehensive Financial Report (the “ACFR”), North Carolina’s\nestimated population as of June 30, 2025, grew to approximately 11.2 million. The state’s population has consistently grown in recent\nyears; and, according to the ACFR, as of 2025, North Carolina is the 9th most populous state in the nation. North Carolina’s economy\nimproved over the past year and has been growing over recent years. According to the Bureau of Labor Statistics, North Carolina’s\nunemployment rate increased from 3.7% in November 2024 to 3.8% in November 2025, which rate was lower than the national seasonally adjusted\nunemployment rate reported for November 2025 of 4.5%. According to the Bureau of Labor Statistics, the seasonally adjusted non-farm employment\nin North Carolina in November 2025 accounted for approximately 5,119,900 jobs, which represents a 1.7% increase since November 2024. The\nlargest job gains were in the construction, mining and logging, education and health services, professional and business services, and,\nleisure and hospitality services.

Budgetary Process. Under North\nCarolina’s constitutional and statutory scheme, the state’s governor is required to prepare and propose a biennial budget\nto the General Assembly. The General Assembly is responsible for considering the budget proposed by the governor and enacting the final\nbiennial budget, which must be balanced. In enacting the final budget, the General Assembly may modify the budget proposed by the governor\nas it deems necessary. The governor is responsible for administering the biennial budget enacted by the General Assembly. The full budgetary\nprocess takes place in “odd” years. In “even” years, the governor may recommend budget adjustments for the General\nAssembly’s consideration. The most recently completed biennial budget period was July 1, 2023 to June 30, 2025. As of the date hereof,\nthe General Assembly has not yet passed a final budget for the next biennial budget period. Accordingly, since July 2025, the state’s\ngovernment has been operating pursuant to: (1) a budget process that carries forward the previously enacted base budget if no new budget\nis approved; and (2) a series of “mini budgets” addressing select spending priorities for the state, with the Governor signing\nthese mini budgets into law.

Finances. As of June 30, 2025,\nNorth Carolina’s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $98.15 billion.\nNorth Carolina’s overall net position increased $6 billion or 6.51% (total primary government) from the prior fiscal year. Over\ntime, increases or decreases in net position may serve as a useful indicator of whether the financial position of the state is improving\nor declining. As of June 30, 2025, North Carolina’s General Fund, which is the chief operating fund of the state, had a balance\nof approximately $21.12 billion, which was an increase of 1.07% over the previous year.

North Carolina Tax Rate. North\nCarolina’s individual income tax system applies a flat rate that was 4.50% in 2024 and 4.25% in 2025. The ACFR indicates that individual\nincome tax revenue increased $637.8 million, or 3.87%, year-over-year between fiscal year ended July 1, 2024 and June 30, 2025. According\nto the ACFR, this increase is largely attributable to an increase in wage and salary income, persistently low unemployment rates, and\nrobust performance in non-wage income sectors. On the whole, tax revenues in North Carolina’s General Fund increased by $1.05 billion\n(or 3.2%) from 2024 to 2025, according to the ACFR.

Debt. As of June 30, 2025, North\nCarolina had total long-term debt outstanding (bonds, special indebtedness, and notes from direct borrowings) of approximately $7.20 billion,\nan increase of 0.08% from the previous fiscal year-end. The state issues two types of tax-supported debt: general obligation bonds, which\nare supported by the full faith, credit, and taxing power of the state and require approval by a majority of voters, and various types\nof “special indebtedness” (i.e., debt not subject to a vote of the state’s citizens),\nwhich are subject to appropriation by the North Carolina General Assembly and may also be secured by a lien on facilities or equipment.\nGeneral obligations of the State of North Carolina remained rated “Aaa” by Moody’s and “AAA” by S&P\nand Fitch in 2025, making North Carolina one of fourteen states with a triple-A rating from each of these rating agencies. North Carolina’s\ndebt is considered manageable at current levels when compared with its peer group composed of thirteen other states rated triple-A. There\ncan be no assurance that the economic conditions on which these ratings are based will continue or that particular bond issues may not\nbe adversely affected by changes in economic or political conditions. Further, the credit of the State of North Carolina is not material\nto the ability of political subdivisions and other borrowers that have issued publicly-financed North Carolina bonds to make payments\non such obligations.

SPECIAL CONSIDERATIONS REGARDING INVESTMENT IN VIRGINIA\nTAX-EXEMPT OBLIGATIONS AND/OR SPECIAL FACTORS AFFECTING THE VIRGINIA INTERMEDIATE TAX-FREE ETF

The Virginia Intermediate Tax-Free\nETF will invest primarily in Virginia Tax-Exempt Obligations. For this reason, the Fund is affected by political, economic, regulatory\nor other developments that constrain the taxing, revenue-collecting and spending authority of Virginia issuers or otherwise affect the\nability of Virginia issuers to pay interest, principal, or any premium. The following information constitutes only a brief summary of\ncertain of these developments and does not purport to be a complete description of them. The information has been obtained from recent\nofficial statements prepared by the Commonwealth of Virginia relating to its securities, and no independent investigation has been undertaken\nby Sterling Capital to verify its accuracy. Moreover, the information relates only to the state itself and not to the numerous special\npurpose or local government units whose issues may also be held by the Fund. The credits represented by such issues may be affected by\na wide variety of local factors or structuring concerns, and no disclosure is made here relating to such matters.

The following is a summary of\ncertain economic markers of Virginia’s economy, including employment information, personal income information and retail sales.\nAs reported by the Virginia Employment Commission, Virginia’s unemployment rate as of December 2023 was 2.9 percent, compared to\n3.7 percent for the United States as a whole. According to the U.S. Department of Commerce, estimated personal income for Virginians for\nthe fiscal year ended June 30, 2024, was over $660 billion. This results in a per capita income of over $75,000, which ranked twelfth\namong states and greater than the national average of approximately $69,000. During fiscal year 2023, taxable retail sales increased by\napproximately 3.8 percent. During 2023, Virginia saw an approximately 5 percent decrease in the number of residential building permits\nissued over 2022. Further, there was a 7 percent decrease in the value of new construction in 2023 compared to 2022.

Among the nonagricultural employment\nsectors in Virginia, the professional and business services sector is the largest, followed by the public administration sector, which\nincludes federal, state, and local government, and education and health.

According to statistics published\nby the Bureau of Labor Statistics and Virginia Labor Market Information, Virginia’s unemployment rate from 2014 to June 2024 was\nless than the national unemployment rate each year. Virginia is one of twenty- six states with a right-to-work law and has a record of\ngood labor-management relations. Virginia’s favorable business climate is reflected in the relatively small number of strikes and\nother work stoppages it experiences. Virginia is one of the least unionized of the more industrialized states.

The Constitution of Virginia\nvests the ultimate responsibility and authority for levying taxes and appropriating revenue in the General Assembly, but the Governor\nhas broad authority to manage the budgetary process. The Governor is required by statute to present a bill detailing his proposed budget\nfor the next biennium (the “Budget Bill”) and a narrative summary of the bill to the General Assembly by December 20th in\nthe year immediately prior to each even year session. The Budget Bill is introduced in both the House of Delegates and the Senate. It\nis referred to the House Appropriations and Senate Finance Committees, which hold joint meetings to hear from citizens, from other General\nAssembly members and from agency representatives. The Budget Bill is then approved by each Committee in an open session and reported to\nthe respective floors for consideration, debate, amendment and passage. After the bill has passed both houses, differences between the\nHouse and Senate versions are reconciled by a conference committee from both houses. Under constitutional provisions, the Governor retains\nthe right in his review of legislative action on the Budget Bill, to suggest alterations to or to veto appropriations made by the General\nAssembly. After enactment, the Budget Bill becomes law (the “Appropriation Act”).

Once an Appropriation Act becomes\nlaw, implementation and administration of the provisions of the Appropriation Act are functions of the Governor, assisted by the Secretary\nof Finance and the Department of Planning and Budget. This process also involves constant monitoring of revenue collections and expenditures\nto ensure that a balanced budget is maintained. The Appropriation Act requires that if projected revenue collections fall below amounts\nappropriated, the Governor must reduce expenditures and withhold allotments of appropriations, with the exception of amounts needed for\ndebt service and specified other purposes, to the extent necessary to prevent any expenditure in excess of estimated revenues. The Appropriation\nAct provides that up to 15 percent of a General Fund appropriation to an agency may be withheld by the Governor, if required.

The Constitution of Virginia\nrequires the Governor to ensure that expenses do not exceed total revenues anticipated plus fund balances during the period of two years\nand six months following the end of the General Assembly session in which the appropriations are made. Virginia’s Revenue Stabilization\nFund was established under the Constitution of Virginia and is available to offset, in part, anticipated shortfalls in revenues in years\nwhen revenues are forecasted to decline by more than two percent of the certified tax revenues collected in the most recently ended fiscal\nyear. The maximum balance of the Revenue Stabilization Fund is 15 percent of Virginia’s average annual tax revenues derived from\ntaxes on income and retail sales for the three immediately preceding fiscal years, as certified by Virginia’s Auditor of Public\nAccounts, and the Revenue Stabilization Fund had a balance of $2.8 billion as of June 30, 2024.

Beginning in 2018, the Commonwealth\nestablished, by statute, a second reserve fund entitled the Revenue Reserve Fund (the “Reserve Fund”). The General Assembly\nmay appropriate to the Reserve Fund any surplus revenues after making constitutionally mandated transfers. The monies in the Reserve Fund\nmay be used to offset, in whole or in part, certain anticipated shortfalls in revenue when appropriations based on previous forecasts\nexceed expected revenues in subsequent forecasts. If a revenue shortfall is two percent or less of General Fund resources collected in\nthe most recently ended fiscal year, the General Assembly may appropriate an amount for transfer from the Reserve Fund not to exceed 50\npercent of the amount in the Reserve Fund. The total amount in the Stabilization Fund and the Reserve Fund may not exceed 20 percent of\nthe Commonwealth’s average annual tax revenues derived from taxes on income and retail sales as certified by the Auditor of Public\nAccounts for the three fiscal years immediately preceding. This maximum aggregate amount was increased from 15 percent to 20 percent effective\nJuly 1, 2022, through language contained in Chapter 2 of the 2022 Special Session I and is in effect through June 30, 2024. As of June\n30, 2024, the Reserve Fund had a balance of $2.0 billion.

On May 13, 2024, the General\nAssembly passed House Bill 6001 which provides appropriations for the 2024-2026 biennium beginning on July 1, 2024. The Governor signed\nHouse Bill 6001 on May 13, 2024, which became Chapter 2, 2024 Acts of Assembly, Special Session I (the \"2024 Appropriation Act\").

Key features of the 2024 Appropriation\nAct include the following: (A) for public education, $21.6 billion total general and state non-general fund biennial investment into K-12,\na $1.7 billion (8.6 percent) increase from the previous biennium, with major changes/items including childcare; $828 million state funds,\n222 percent increase from the previous biennium including $500 million for Childcare Subsidy Program; teacher/education staff compensation;\n$540 million to fund a 3% increase for all funded instructional and support positions in both FY 2025 and FY 2026; local school construction;\n$641 million in state non-general funds to fund school construction projects, which includes $160 million in competitive school construction\nfunding grants, $231 million in infrastructure funds, and $250 million in School Construction Loans; (B) for higher education, $7.2 billion\nGeneral Fund operating investment, the largest in Virginia's history, representing growth of 20 percent from the previous biennium; (C)\nfor public safety, $20 million for Operation Ceasefire Grant Funding; $28 million to Safer Communities program; $18 million for Firearm\nViolence Intervention and Prevention funding; $43 million to support school resource officers in local schools; $57 million for community\ncorrections programs; $21 million for victim witness programs; and $16 million for domestic violence support services; (D) for health\nand human resources, $840 million General Fund and $485 million of other funds to fully-fund Medicaid and Children's Health Insurance,\nincluding a $95 million Medicaid Reserve; $634 million for 3,440 Developmental Disability Waiver slots and other waiver services; $74.3\nmillion to expand Crisis Services, including mobile crisis teams, crisis receiving centers, and STEP-VA services; $72.8 million to support\nthe behavioral health workforce, including $47 million in salary increases at state facilities and Comprehensive Services Boards; $28.9\nmillion in Opioid Response and Prevention funding; $97 million to fund the Children's Services Act; and $34 million in support of kinship\nand foster care families; (E) for conservation and resiliency, over $800 million in conservation and resiliency investments including\n$400 million for upgrades to wastewater projects for Chesapeake Bay nutrient reduction, $200 million for water quality improvement activities,\n$100 million for the Virginia Community Flood Preparedness Fund, $25 million to the City of Norfolk for the Norfolk Coastal Storm Risk\nManagement Project, $50 million for the Richmond Combined Sewer Overflow project, and $26.5 million for the City of Bristol landfill remediation;\n(F) for economic development, $17 5 million over the biennium for the Virginia Housing Trust Fund; $114 million to enhance \"Virginia's\nResearch Hub,\" a biotechnology, life sciences, and pharmaceutical manufacturing network among University of Virginia, Virginia Tech, Old\nDominion University, and Virginia Commonwealth University; $40 million to support the development of business ready sites; Authorizes\na $40 million treasury loan to the City of Newport News to help secure a federal investment of up to $400 million from the U.S. Navy to\nbuild housing infrastructure for sailors stationed at the shipyard; $30 million for the Virginia Make Ready initiative, providing critical\nfunding to connect Virginians in underserved communities to the digital economy; and $14 million to promote Industrial Site Revitalization\nacross Virginia; (G) for transportation, $101 million for expansion of the existing Hampton Roads Toll Relief Program; $144.7 million\nto address current operating shortfall for Washington Metropolitan Area Transit Authority's (WMATA) Metro System; and $245 million to\naccelerate construction projects within the Interstate 81 Corridor Improvement Program including a $70 million for the 1-81 Corridor Improvement\nFund plus a conditional pledge of an additional $175 million in future funding; (H) for public employee salary increases (excluding employees\nworking in K-12 education), $545.2 million for the biennium to provide a three percent increase in employee compensation, including $178.8\nmillion for FY 2025 and $366.4 million for FY 2026; and (I) for capital outlay investments, $1.9 billion in general fund cash and tax-supported\ndebt for projects, including $571.9 million for renovation, replacement, and improvement projects at state agencies and institutions of\nhigher education, $464 million from the General Fund for maintenance reserve, $400 million in bond funding for improvements to wastewater\ntreatment plants, $108.2 million from the General Fund for equipment to support the opening of completed projects, and $280 million from\nthe General Fund to supplement construction cost increases on previously authorized projects.

On December 18, 2024, Governor\nYoungkin announced his amendments to the 2024-2026 biennium budget. The Governor's introduced 2025 amended budget bill was considered\nby the 2025 Session of the General Assembly which convened on January 8, 2025.

The General Assembly adjourned\non February 22, 2025 after adopting recommendations for additional amendments to the bill. At the April 2, 2025 reconvened session, the\nGovernor offered 205 executive amendments and 8 vetoes that were considered and, where they agreed, folded into the amended budget bill\nfor the 2024-2026 biennium. On May 2, 2025, the Governor signed the 2025 Appropriation Act with an additional 37 item vetoes. The 2025\nAppropriation Act, also known as Chapter 725, 2025 Acts of Assembly, became effective upon the Governor's signature on May 2, 2025.

Major features of the amended\n2024-2026 biennium budget include the following: returns nearly a billion in tax relief to Virginia taxpayers and extends and increases\nthe standard deduction; fully funds Medicaid and Office of Children's Services forecasted expenditures - an additional $687.1 million\nover the biennium; $784.7 million in incremental investment under direct aid to public education for a total of $22.4 billion; $900 million\nof projected revenues retained unallocated to create a cushion to meet the financial forecast; minimizes new capital spending given potential\nstress on state revenues from potential budgetary actions at the federal level; $784.7 million general fund and state non-general funds\nacross the biennium; $83.1 million for a 1.5 percent bonus for state employees and state-supported local employees; and $846 million for\nHealth & Human Resources over the biennium.

The General Assembly will convene\nin January 2026 to consider amendments to the 2025 Appropriation Act for the fiscal year ending June 30, 2026 along with a new budget\nfor the 2026-2028 biennium.

Virginia’s General Fund\nrevenues are principally composed of tax revenues. In recent fiscal years, most of the tax revenues have been derived from taxes imposed\nby Virginia on individual and fiduciary income; sales and use; corporate income; communications sales and use; premiums of insurance companies;\nand deeds, contracts, wills and suits. The General Fund balance increased by approximately $450 million in fiscal year 2024, an increase\nof approximately 3.1 percent from fiscal year 2023. Overall, tax revenues decreased by 4.5 percent from fiscal year 2023 to fiscal year\n2024. Categorically, year over year results included: Individual and Fiduciary Income tax revenues increased by 7.0 percent, Corporation\nIncome tax collections decreased by 6.1 percent, State Sales and Use Tax decreased by 0.2 percent, Other Taxes increased by 103.2 percent,\nPremiums of Insurance Companies increased by 3.8 percent, Public Service Corporations tax collections increased by 2.3 percent and Communications\nSales and Use experienced a 5.1 percent decline in tax collections. While overall revenue increased by 5.7 percent. Expenditures also\nincreased overall by 9.5 percent in fiscal year 2024, compared to a 3.1 percent increase in fiscal year 2023. Categorically, increases\nin expenditures included: General Government, 13.1 percent, Education, 7.7 percent, Resources and Economic Development, 19.2 percent,\nAdministration of Justice, 7.1 percent, Capital Outlay, 161.5 percent, and Individual and Family Services, 2.9 percent.

Virginia has a Debt Capacity\nAdvisory Committee that is charged by statute with annually estimating the amount of tax- supported debt, which may prudently be authorized,\nconsistent with the financial goals, capital needs and policies of Virginia. Such estimate is provided to the Governor and General Assembly.\nThe Committee is also required to review annually the amount and condition of bonds, notes and other security obligations of Virginia’s\nagencies, institutions, boards and authorities which are either secured by a moral obligation pledge to replenish reserve fund deficiencies\nor for which Virginia has a contingent or limited liability. The Committee provides its recommendations on the prudent use of such obligations\nto the Governor and the General Assembly. The Committee also reviews the amounts and condition of bonds, notes and other security obligations\nof Virginia’s agencies, institutions, boards and authorities which are neither tax-supported debt nor obligations secured by a moral\nobligation pledge to replenish reserve fund deficiencies. The Committee may recommend limits, when appropriate, on these other obligations.

The Constitution of Virginia,\nin Section 9 of Article X, provides for the issuance of debt by or on behalf of Virginia. Sections 9(a), (b) and (c) provide for the issuance\nof debt to which Virginia’s full faith and credit is pledged, and Section 9(d) provides for the issuance of debt not secured by\nthe full faith and credit of Virginia, but which may be supported by and paid from Virginia’s tax collections subject to appropriations\nby the General Assembly. Virginia may also enter into leases and contracts that are classified on its financial statements as long-term\nindebtedness. Certain authorities and institutions of Virginia may also issue debt.

Section 9(a) of Article X provides\nthat the General Assembly may contract general obligation debt: (1) to meet certain types of emergencies, (2) to meet casual deficits\nin the revenue or in anticipation of the collection of revenues of Virginia and (3) to redeem a previous debt obligation of Virginia.\nTotal indebtedness issued pursuant to Section 9(a) (2) shall not exceed 30 percent of an amount equal to 1.15 times the annual tax revenues\nderived from taxes on income and retail sales, as certified by the Auditor of Public Accounts, for the preceding fiscal year and any such\nindebtedness shall mature within twelve months from the date of its incurrence.

Section 9(b) of Article X provides\nthat the General Assembly may authorize the creation of general obligation debt for capital projects. Such debt is required to be authorized\nby an affirmative vote of a majority of the members elected to each house of the General Assembly and approved in a statewide referendum.\nThe outstanding amount of such debt is limited in the aggregate to an amount equal to 1.15 times the average annual tax revenues derived\nfrom taxes on income and retail sales, as certified by the Auditor of Public

Accounts, for the three immediately preceding fiscal\nyears (“9(b) Debt Limit”). Thus, the amount of such debt that can be issued is the 9(b) Debt Limit less the total amount of\nsuch debt outstanding (“Debt Margin”). An additional 9(b) debt authorization restriction is calculated in order to determine\nthe amount of such debt that the General Assembly may authorize in any year. The additional authorization restriction is limited to 25\npercent of the 9(b) Debt Limit less any 9(b) debt authorized in the current and prior three fiscal years. The phrase “taxes on income\nand retail sales” is not defined in the Constitution or by statute. The record made in the process of adopting the Constitution,\nhowever, suggests an intention to include only income taxes payable by individuals, fiduciaries and corporations and the state sales and\nuse tax.

Section 9(c) of Article X provides\nthat the General Assembly may authorize the creation of general obligation debt for revenue-producing capital projects for executive branch\nagencies and institutions of higher learning. Such debt is required to be authorized by an affirmative vote of two-thirds of the members\nelected to each house of the General Assembly and approved by the Governor. The Governor must certify before the enactment of the bond\nlegislation and again before the issuance of the bonds that the net revenues pledged are expected to be sufficient to pay principal and\ninterest on the bonds issued to finance the projects. The outstanding amount of Section 9(c) debt is limited in the aggregate to an amount\nequal to 1.15 times the average annual tax revenues derived from taxes on income and retail sales, as certified by the Auditor of Public\nAccounts, for the three immediately preceding fiscal years (“9(c) Debt Limit”). While the debt limits under Sections 9(b)\nand 9(c) are each calculated as the same percentage of the same average tax revenues, these debt limits are separately computed and apply\nseparately to each type of debt.

Tax-supported debt of Virginia\nincludes both general obligation debt and debt of agencies, institutions, boards and authorities for which debt service is expected to\nbe made in whole or in part from appropriations of tax revenues.

Outstanding Section 9(b) debt\nas of June 30, 2024 includes the unamortized portion of $120.1 million of general obligation bonds. In November 1992, $613 million in\ngeneral obligation bonds were authorized and approved by the voters. In November 2002, $1 billion in general obligation bonds were authorized\nand approved by the voters. Various series of refunding bonds were issued to refund certain series of bonds. Outstanding Section 9(c)\ndebt as of June 30, 2024 includes various series of Higher Educational Institutions Bonds (including refunding bonds) issued from 2010\nto 2024, and a series of Parking Facilities Bonds (including refunding bonds) issued in 2016. Outstanding general obligation debt does\nnot include 9(b) and 9(c) advance refunded bonds for which funds have been deposited in irrevocable escrow accounts in amounts sufficient\nto meet all required future debt service.

Section 9(d) of Article X provides\nthat the restrictions of Section 9 are not applicable to any obligation incurred by Virginia or any of its institutions, agencies or authorities\nif the full faith and credit of Virginia is not pledged or committed to the payment of such obligation. There are currently outstanding\nvarious types of 9(d) revenue bonds issued by authorities, political subdivisions and agencies to which Virginia’s full faith and\ncredit is not pledged. Certain of these bonds, however, are paid in part or in whole from revenues received as appropriations by the General\nAssembly from general tax revenues, while others are paid solely from revenues derived from enterprises related to the operation of the\nfinanced capital projects or other non-General Fund revenues. The debt repayments of the Virginia Public Building Authority, the Virginia\nCollege Building Authority 21st Century College and Equipment Programs, the Virginia Biotechnology Research Partnership Authority and\nseveral other long-term capital leases or notes have been supported all or in large part by General Fund appropriations.

The Commonwealth Transportation\nBoard (“CTB”) has issued various series of bonds authorized under the State Revenue Bond Act. These bonds are secured by and\npayable from funds appropriated by the General Assembly from the Transportation Trust Fund. The Transportation Trust Fund was established\nby the General Assembly in 1986 as a special non-reverting fund administered and allocated by the CTB for the purpose of increased funding\nfor construction, capital and other needs of state highways, airports, mass transportation and ports. As of June 30, 2024, $2.6 billion\nin CTB Tax-Supported bonds were outstanding. During 2007, the CTB was authorized by the General Assembly to issue up to $3.0 billion in\nCapital Projects Revenue Bonds with an additional $180 million authorized in 2008 and an additional $150 million authorized in 2018 for\na total authorization of $3.33 billion. In addition, in 2013, the CTB was authorized to issue up to $595.7 million in Transportation Revenue\nBonds for the U.S. Route 58 Corridor Development Program, which the CTB began utilizing in 2022.

The Virginia Port Authority\n(“VPA”) issues bonds secured by its share of the Transportation Trust Fund. As of June 30, 2024, $353.8 million of Commonwealth\nPort Fund Revenue Bonds were outstanding and there was no authorized but unissued Commonwealth Port Fund debt.

Virginia is involved in numerous\nagreements to lease buildings, energy efficiency projects and equipment. These lease agreements are for various terms, and each lease\ncontains a non appropriation clause indicating that continuation of the lease is subject to funding by the General Assembly. Virginia\nimplemented GASB Statement No. 87, Leases, in fiscal year 2022. This resulted in dramatic changes in categorizing leases and lease liability\nreporting. As a result of the changes the principal balance of all tax-supported Long-Term Liabilities outstanding as of June 30, 2024\nwas $614.91 million.

Virginia implemented GASB Statement\nNo. 96, Subscription-Based Information Technology Arrangements (SBITAs), for the fiscal year ended June 30, 2023. Virginia has entered\ninto contractual agreements with various vendors that convey control of the right-

to-use another entity's IT asset, alone, or in conjunction\nwith a tangible capital asset in an exchange or exchange-like transaction under GASB Statement No. 96, Subscription-Based Information\nTechnology Arrangements (SBITAs). Virginia has a variety of variable payment clauses within its SBITAs, including variable payments based\non future performance, usage of the underlying asset, number of software licenses, or hours of access necessary. Such amounts are recognized\nas an expense in the period in which the obligation for those payments is incurred. The principal balance of tax- supported SBITAs outstanding\nwas $237.3 million as of June 30, 2024.

Virginia also finances the acquisition\nof certain personal property and equipment through installment purchase agreements. The length of the agreements and the interest rates\ncharged vary. In most cases, the agreements are collateralized by the personal property and equipment acquired. Installment purchase agreements\ncontain non appropriation clauses indicating that continuation of the installment purchase is subject to funding by the General Assembly.\nThe principal balance of tax-supported installment purchase obligations outstanding was $309.7 million as of June 30, 2024.

The Virginia Housing Development\nAuthority, the Virginia Resources Authority and the Virginia Public School Authority are authorized to issue bonds secured in part by\na moral obligation pledge of Virginia. All three are designed to be self-supporting from their individual loan programs. Virginia may\nfund deficiencies that may occur in debt service reserves for moral obligation debt. By the terms of the applicable statutes, the Governor\nis obligated to include in his annual budget submitted to the General Assembly the amount necessary to restore any such reported deficiency,\nbut the General Assembly is not legally required to make any appropriation for such purpose. Neither the Virginia Housing Development\nAuthority nor the Virginia Public School Authority have bonds outstanding that are secured by the moral obligation pledge. To date, the\nVirginia Resources Authority has not reported to Virginia that any such reserve deficiencies exist.

As of June 30, 2024, local government\nwas comprised of 95 counties, 39 incorporated cities and 37 incorporated towns. Cities and counties are units of general government that\nhave traditionally provided all services not provided by Virginia. Virginia is unique in that cities and counties are independent and\ntheir land areas do not overlap. Cities and counties each levy and collect their own taxes and provide their own services. Towns, on the\nother hand, are units of local government and are a part of the counties in which they are located. Towns levy and collect taxes for town\npurposes, but their residents are also subject to county taxes. The largest expenditure by local governments in Virginia is for public\nelementary and secondary education. Each county and city in Virginia, with few exceptions, constitutes a separate school district. Counties,\ncities and towns typically also provide such services as police and fire protection, water and sewer services and recreational facilities.

Moody’s Investors Service\nhas rated the long-term general obligation bonds of Virginia Aaa, S&P Global Ratings has rated such bonds AAA, and Fitch Ratings has\nrated such bonds AAA. There can be no assurance that such ratings will be continued for any given period of time or that they will not\nbe revised downward or withdrawn entirely by the rating agencies if, in their judgment, the circumstances so warrant. See the Appendix\nto this SAI.

DIVERSIFICATION. The Tax-Free\nBond Funds are non-diversified funds under the 1940 Act. This means they may invest in the securities of a limited number of issuers.\nUnder the Code, at the end of each fiscal quarter each Tax-Free Bond Fund must nevertheless diversify its portfolio such that, with respect\nto 50% of its total assets, not more than 25% of its total assets is invested in the securities of any one issuer (other than U.S. Government\nSecurities or securities of other regulated investment companies), and with respect to the remainder of its total assets, no more than\n5% of its assets is invested in the securities of any one issuer (other than U.S. Government Securities or securities of other regulated\ninvestment companies). Because of the relatively small number of issuers of North Carolina Tax-Exempt Obligations and Virginia Tax-Exempt\nObligations, the North Carolina Intermediate Tax-Free ETF and the Virginia Intermediate Tax-Free ETF are more likely to invest a higher\npercentage of their assets in the securities of a single issuer than is an investment company that invests in a broad range of tax-exempt\nsecurities. This involves an increased risk of loss to a Tax-Free Bond Fund if the issuer is unable to make interest or principal payments\nor if the value of such securities declines, and consequently may cause greater fluctuation in the NAV of the Tax-Free Bond Fund’s\nShares.

ADDITIONAL INFORMATION. The\nforegoing is only a summary of some of the important federal tax considerations generally affecting purchasers of Shares of each Fund.\nThis summary is based on tax laws and regulations which are in effect on the date of this SAI; such laws and regulations may be changed\nby legislative or administrative action, and such changes may be retroactive.

No attempt is made to present\na detailed explanation of the federal income tax treatment of each Fund or its shareholders, and this discussion is not intended as a\nsubstitute for careful tax planning. Accordingly, potential purchasers of Shares of a Fund are urged to consult their tax advisers with\nspecific reference to their own tax situation, including the potential application of foreign, state and local taxes.

\nDIVIDENDS AND DISTRIBUTIONS

DIVIDENDS. Dividends from net\ninvestment income of the Bond Funds, if any, are generally declared and paid monthly. Dividends from net investment income of the Equity\nFunds, if any, are generally declared and paid quarterly. Income dividends are derived from investment income, including dividends, interest,\nand certain foreign currency gains, if any, received by the Funds.

CAPITAL GAINS. Capital gains\ndistributions, if any, usually will be declared and paid in December for the prior twelve-month period ending September 30.

MANAGEMENT\nOF STERLING\nCAPITAL FUNDS

TRUSTEES AND OFFICERS

The Funds are managed under\nthe direction of the Board of Trustees. Subject to the provisions of the Declaration of Trust, By-laws and Massachusetts law, the Trustees\nhave all powers necessary and convenient to carry out this responsibility, including the election and removal of Fund officers.

The Trustees of the Funds (including\nTrustees who are not “interested persons” (as defined in the 1940 Act) of the Funds (the “Independent Trustees”)),\ntheir ages, their term of office and length of time served, a description of their principal occupations during the past five years, the\nnumber of portfolios in the Sterling Capital Funds complex that the Trustee oversees, and any other directorships or trusteeships held\nby the Trustee during the last five years in any publicly-traded company or registered investment company are listed in the two tables\nimmediately following. The business address of the Trustees and Officers listed below is 434 Fayetteville St., Suite 500, Raleigh NC 27601.

INDEPENDENT TRUSTEES

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

(1)	(2)	(3)	(4)	(5)	(6)
NAME AND \nDATE OF BIRTH	POSITION(S) \nHELD WITH \nTHE FUNDS	TERM OF \n OFFICE / \n LENGTH OF \n TIME SERVED	PRINCIPAL OCCUPATION DURING \nTHE PAST FIVE YEARS	NUMBER OF \n PORTFOLIOS \n IN FUND \n COMPLEX \n OVERSEEN BY \n TRUSTEE	OTHER \n DIRECTORSHIPS \n HELD BY TRUSTEE \n FOR THE PAST \n FIVE YEARS
Drew T. Kagan \n Birthdate: 02/48	Trustee	Indefinite, 08/00 - Present	Retired; from September 2010 to March 2013, Chairman, Montecito Advisors, Inc.; from December 2003 to September 2010, CEO, Montecito Advisors, Inc.; from March 1996 to December 2003, President, Investment Affiliate, Inc	24	None
Laura C. Bingham \n Birthdate: 11/56	Trustee	Indefinite, 02/01 - Present	From March 2013 to December 2019, Partner, Newport LLC; from July 2010 to March 2013, governance and leadership consultant; from June 1998 to July 2010, President and CEO of Peace College	24	None
Alan G. Priest \n Birthdate: 05/52	Trustee	Indefinite, 07/12 - Present	Retired; from April 1993 to April 2012, Partner, Ropes & Gray LLP	24	None
\n Kimberly R. Storms \nBirthdate: 05/72	Trustee; Chairperson of the Board of Trustees	Indefinite, 10/22 - Present	From 2004 to 2021, Senior Vice President and Director of Fund Administration SS&C ALPS	24	Trustee, Elevation Series Trust (fka Consortio Funds Trust) (2022-Present)
David L. Wedding \n Birthdate: 08/58	Trustee	Indefinite, 10/22 - Present	Retired; from 2005 to 2020, Partner, Grant Thornton LLP	24	Board Member (2011-2020) and Chair of the Board (2012-2018), Grant Thornton LLP

INTERESTED TRUSTEE

\n \n \n \n \n \n \n \n

Scott A.\n Haenni*
\nBirthdate:\n 02/73

Trustee

Indefinite,\n 05/23 -\n Present

From\n March 2023\n to present,\n CEO, Sterling\n Capital; from\n January 2015 to March 2023, COO,\n Sterling Capital

Director,\n Sterling Capital

\n\n

Mr. Haenni is treated by the Funds as an “interested person”\n(as defined in Section 2(a)(19) of the 1940 Act) of the Funds because he is an officer of the Adviser.

Information about\nEach Trustee’s Experience, Qualifications, Attributes or Skills for Board Membership. The Board believes that each Trustee’s\nexperience, qualifications, attributes or skills on an individual basis and in combination with those of the other Trustees supports the\nconclusion that the Board possesses the requisite skills and attributes to carry out its oversight responsibilities with respect to the\nTrust. The following specific experience, qualifications, attributes and/or skills were considered in respect of each Trustee:

\n \n \n \n \n

•

Mr. Kagan - Significant\n executive experience including continuing service as chief executive officer of an investment services organization and past service as\n a manager of a mutual fund complex and as an executive of a banking\n organization.

\n \n \n \n \n

•

Ms. Bingham – Significant\n executive experience as CEO and senior officer, including designation as a National Association of Corporate Directors Governance\n Fellow, service as college president overseeing endowment investments and business strategy, and service\n as a CEO/Board consultant.

\n \n \n \n \n

•

Mr.\n Priest –\n Significant experience\n as an\n attorney specializing\n in all\n aspects of\n investment company\n related laws\n and regulations.

\n \n \n \n \n

•

Ms. Storms – Significant\n experience with investment companies, including past service as senior vice president and director of fund administration of a large\n investment services organization as well as principal financial officer of several registered investment\n companies.

\n \n \n \n \n

•

Mr.\n Wedding –\n Significant experience\n conducting external\n audits and\n forensic accounting\n investigations for\n public and\n private companies\n and advising\n boards on\n financial and strategic matters.

\n \n \n \n \n

•

Mr.\n Haenni –\n Significant executive\n experience including\n serving as\n CEO of\n an investment\n services organization\n and previously\n serving as\n COO of\n an investment\n services organization.

The Trustees receive fees and\nare reimbursed for expenses in connection with each meeting of the Board of Trustees they attend. However, no officer or employee of the\nDistributor, Ultimus Fund Solutions, LLC (the “Sub-Administrator” or “Ultimus Fund Solutions”), or Sterling Capital,\nDesjardins Global Asset Management Inc., or Fédération des caisses Desjardins du Québec receives any compensation from\nthe Funds for acting as a Trustee.

Sterling Capital’s CCO,\nMr. Charles A. Durham, also serves as the Funds’ CCO and Anti-Money Laundering Officer. The CCO’s compensation is reviewed\nand approved by the Board of Trustees and paid by Sterling Capital. However, the Funds reimburse Sterling Capital for its allocable portion\nof the CCO’s base salary and incentive pay. As a result, the CCO fee paid by the Funds is only part of the total compensation received\nby Mr. Durham.

OFFICERS

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

(1)	(2)	(3)	(4)	(5)	(6)
NAME AND DATE OF BIRTH	POSITION(S) HELD WITH THE FUNDS	TERM OF OFFICE / LENGTH OF TIME SERVED	PRINCIPAL OCCUPATION DURING THE PAST FIVE YEARS	NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY TRUSTEE	OTHER DIRECTORSHIPS HELD BY TRUSTEE FOR THE PAST FIVE YEARS
James T. Gillespie \nBirthdate: 11/66	President	Indefinite, 12/ 12-Present	From August 2020 to present, Managing Director, Sterling Capital; From March 2012 to August 2020, Executive Director, Sterling Capital	N/A	N/A

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Todd M. Miller \nBirthdate: 09/71	Treasurer and Secretary	Indefinite, Treasurer, 01/15 – Present; Secretary, 08/10-Present	From May 2021 to present, Executive Director, Sterling Capital; From June 2009 to April 2021, Director, Sterling Capital	N/A	N/A
Michelle A. Whalen \nBirthdate: 04/69	Vice President	Indefinite, 11/15 – Present	From May 2021 to present, Director, Sterling Capital; From August 2015 to April 2021, Associate Director & Senior Mutual Fund Administrator, Sterling Capital	N/A	N/A
Charles A. Durham \nBirthdate: 06/79	Chief Compliance Officer and Anti-Money Laundering Officer	Indefinite, 06/18 – Present	From June 2018 to present, Chief Compliance & Risk Officer and Managing Director, Sterling Capital	N/A	N/A
Zachary Richmond \nBirthdate: 06/80	Assistant Treasurer	Indefinite, 08/24 – Present	From August 2024 to present, Senior Vice President, Financial Administration for Ultimus Fund Solutions, LLC; From 2015 to August 2024, Vice President, Financial Administration for Ultimus Fund Solutions, LLC	N/A	N/A
Maggie Bull \nBirthdate: 12/65	Assistant Secretary	Indefinite, 02/26 – Present	From August 2022 to present, Vice President and Senior Managing Counsel, Ultimus Fund Solutions, LLC (\"Ultimus\"); from February 2020 to July 2022 Vice President and Senior Legal Counsel, Ultimus; From June 2017 - January 2022, Senior Attorney, Ultimus	N/A	N/A
Ashley Heinlein \nBirthdate: 06/85	Assistant Secretary	Indefinite, 02/26 – Present	From August 2022 to present, Paralegal, Ultimus Fund Solutions, LLC; From June 2018 to December 2021, Paralegal, Office of the Indiana Attorney General	N/A	N/A

Responsibilities of the Board of Trustees

The Board has overall responsibility\nfor the conduct of the affairs of the Trust. The Board sets and reviews policies regarding the operation of the Trust, and directs the\nofficers to perform the daily functions of the Trust. The Chairman of the Board of Trustees is an Independent Trustee. Each Trustee shall\nserve during the continued lifetime of the Trust until he or she dies, resigns or is removed, or, if sooner, until the next meeting of\nshareholders called for the purpose of electing Trustees and the election and qualification of his successor. The Board of Trustees may\nfill any vacancy on the Board provided that, after such appointment, at least two-thirds of the Trustees have been elected by shareholders.\nAny Trustee may be removed by the Board, with or without cause, by action of a majority of the Trustees then in office, or by a vote of\nshareholders at any meeting called for that purpose.

Board Leadership Structure

The Board’s leadership\nstructure features Independent Trustees serving as Board Chairman and as Chairperson of each of the Board’s Committees. This structure\nis reviewed by the Board regularly and the Board believes it to be appropriate and effective. All Independent Trustees are members of\nthe Audit and Nominations Committees. Inclusion of all Independent Trustees in the Audit and Nominations Committees allows all such Trustees\nto participate in the full range of the Board’s oversight duties, including oversight of risk management processes.

The officers of the Trust are\nelected annually by the Board. The Chairman of the Trustees, if one is elected, the President, the Treasurer and the Secretary of the\nTrust shall hold office until their respective successors are chosen and qualified, or in each case until he or she sooner dies, resigns,\nis removed or becomes disqualified. Each other officer shall hold office and each agent shall retain authority at the pleasure of the\nTrustees. The Trust’s CCO must be approved by a majority of the Independent Trustees. Any officer may be removed, with or without\ncause, by the Board.

Board Oversight of Trust Risk

The Board of Trustees’\nrole is one of oversight, rather than active management. This oversight extends to the Funds’ risk management processes. Those processes\nare embedded in the responsibilities of officers of the Funds. The officers of the Funds, including the President and Principal Executive\nOfficer, the Treasurer and Principal Financial Officer, and the CCO, report to the Board

and to the Chairs of its Committees on a variety\nof matters at regular meetings of the Board and on an ad hoc basis.

The Sterling Capital Funds have\nretained Sterling Capital as the Funds’ investment adviser and administrator. Sterling Capital provides the Funds with investment\nadvisory services, and is responsible for day-to-day administration of the Funds and management of the risks that arise from the Funds’\ninvestments and operations. Employees of Sterling Capital serve as the Funds’ officers, including the Funds’ President and\nPrincipal Executive Officer and the CCO. The Board provides oversight of the services provided by Sterling Capital, including risk management\nservices. In the course of providing oversight, the Board receives a wide range of reports on the Funds’ activities, including regarding\na Fund’s investment portfolio, the compliance of the Fund with applicable laws, and the Fund’s financial accounting and reporting.\nThe Board meets periodically with Sterling Capital personnel to receive reports on Sterling Capital and other service providers’\nrisk management services. The Board also meets periodically with the Funds’ CCO to receive reports regarding the compliance of the\nFund with the federal securities laws and the Funds’ internal compliance policies and procedures. In addition, the Board meets periodically\nwith the portfolio managers of a Fund to receive reports regarding the management of the Fund, including its investment risks.

For interested Trustees and officers, positions held\nwith affiliated persons or principal underwriters of the Funds are listed in the following table:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

\n NAME	\n POSITIONS HELD WITH AFFILIATED\n PERSONS OR PRINCIPAL UNDERWRITERS OF THE FUNDS
\n SCOTT A. HAENNI	\n Sterling Capital Management LLC, Senior Managing\n Director and Chief Executive Officer \n Guardian Capital U.S. Asset Management (a division\n of Guardian Capital Group), Manager and Chief Operating Officer
\n JAMES T. GILLESPIE	\n Sterling Capital Management LLC, Managing Director,\n Head of Fund Administration
\n CHARLES A. DURHAM	\n Sterling Capital Management LLC, Managing Director\n and Chief Compliance & Risk Officer; Anti-Money Laundering Officer
\n TODD M. MILLER	\n Sterling Capital Management LLC, Executive\n Director, Fund Administration
\n MICHELLE A. WHALEN	\n Sterling Capital Management LLC, Director,\n Fund Administration

No officers of the Funds, other\nthan the Funds’ CCO, receive compensation directly from the Funds for performing the duties of their offices. Sterling Capital receives\nfees from the Funds for acting as Adviser and Administrator, Ultimus Fund Solutions receives fees from the Funds for acting as transfer\nagent to the Funds and for providing certain fund accounting services. In addition, Ultimus Fund Solutions receives fees from the Administrator\nfor acting as Sub-Administrator.

COMMITTEES\nOF THE\nBOARD OF\nTRUSTEES AUDIT\nCOMMITTEE

The purposes of the Audit Committee\nare to oversee the Funds’ accounting and financial reporting policies and practices; to oversee the quality and objectivity of the\nFunds’ financial statements and the independent audit thereof; to consider the selection of an independent registered public accounting\nfirm for the Funds and the scope of the audit; and to act as a liaison between the Funds’ independent registered public accounting\nfirm and the full Board of Trustees. Messrs. Kagan, Wedding and Priest, and Ms. Bingham and Ms. Storms serve on this Committee; Mr. Wedding\nserves as chair of the Audit Committee. For the fiscal year ended September 30, 2025, there were two meetings of the Audit Committee.

NOMINATIONS\nCOMMITTEE

The purpose of the Nominations\nCommittee is to recommend qualified candidates to the Board of Trustees in the event that a position is vacated or created. Messrs. Kagan,\nWedding and Priest, and Ms. Bingham and Ms. Storms serve on this Committee; Ms. Bingham serves as chair of the Nominations Committee.\nFor the fiscal year ended September 30, 2025, there were no meetings of the Nominations Committee.

Pursuant to procedures adopted\nby the Board, the Nominations Committee may consider Trustee candidates recommended by members of the Nominations Committee, candidates\nrecommended by other members of the Board, candidates recommended by shareholders, or candidates recommended by the Trust’s management.\nShareholder recommendations should be submitted to the Nominations Committee in care of Sterling Capital Funds. Recommendations for candidates\nas Trustees of Sterling Capital Funds will be evaluated, among other things, in light of whether the number of Trustees is expected to\nchange and whether the Trustees expect any vacancies.

SECURITIES\nOWNERSHIP

For each Trustee, the following\ntables disclose the dollar range of equity securities beneficially owned by the Trustee in the Funds and, on an aggregate basis, in any\nregistered investment companies overseen by the Trustee within the Funds’ family of investment companies as of December 31, 2025.

The following table shows information\nfor Trustees who are not “interested persons” of the Funds as defined in the 1940 Act:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

NAME OF TRUSTEE	FUND NAME*	DOLLAR RANGE OF EQUITY SECURITIES IN THE FUND	AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN ALL REGISTERED INVESTMENT COMPANIES OVERSEEN BY TRUSTEE IN THE FAMILY OF INVESTMENT COMPANIES
Drew T. Kagan	\n Large Cap Value Focused Factor ETF* \n Small Cap Value Focused Factor ETF \n Small Cap Value ETF* \n North Carolina Intermediate Tax-Free ETF** \n Virginia Intermediate Tax-Free ETF***	\n None \n None \n None \n None \n None	>$100,000
Laura C. Bingham	\n Large Cap Value Focused Factor ETF* \n Small Cap Value Focused Factor ETF \n Small Cap Value ETF* \n North Carolina Intermediate Tax-Free ETF** \n Virginia Intermediate Tax-Free ETF***	\n None \n None \n None \n None \n None	>$100,000
Alan G. Priest	\n Large Cap Value Focused Factor ETF* \n Small Cap Value Focused Factor ETF \n Small Cap Value ETF* \n North Carolina Intermediate Tax-Free ETF** \n Virginia Intermediate Tax-Free ETF***	\n None \n None \n None \n None \n >$100,000	>$100,000
Kimberly R. Storms	\n Large Cap Value Focused Factor ETF* \n Small Cap Value Focused Factor ETF \n Small Cap Value ETF* \n North Carolina Intermediate Tax-Free ETF** \n Virginia Intermediate Tax-Free ETF***	\n $10,001-$50,000 \n None \n None \n None \n None	>$100,000
David L. Wedding	\n Large Cap Value Focused Factor ETF* \n Small Cap Value Focused Factor ETF \n Small Cap Value ETF* \n North Carolina Intermediate Tax-Free ETF** \n Virginia Intermediate Tax-Free ETF***	\n None \n None \n None \n None \n None	>$100,000

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

\n *	\n Reflects\n the dollar\n range of\n equity securities\n beneficially owned in\n the Predecessor Behavioral\n Large Cap Value Equity Fund by\n the Trustees\n as of\n December 31,\n 2025.
\n **	\n Reflects\n the dollar\n range of\n equity securities beneficially\n owned in\n the Predecessor Behavioral\n Small Cap Value Equity Fund by\n the Trustees\n as of\n December 31,\n 2025.
\n ***	\n Reflects\n the dollar\n range of\n equity securities beneficially\n owned in\n the Predecessor\n Small Cap Value Fund by\n the Trustees\n as of\n December 31,\n 2025.
\n ****	\n Reflects\n the dollar\n range of\n equity securities beneficially\n owned in\n the Predecessor\n North Carolina Intermediate Tax-Free Fund by\n the Trustees\n as of\n December 31,\n 2025.
\n *****	\n Reflects\n the dollar\n range of\n equity securities beneficially\n owned in\n the Predecessor\n Virginia Intermediate Tax-Free Fund by\n the Trustees\n as of\n December 31,\n 2025.

The following table shows information for the Trustee who is an “interested\nperson of the Funds as defined in the 1940 Act:

\n \n \n \n \n \n

Scott\n A. Haenni

Large Cap Value Focused\n Factor ETF*

Small Cap Value Focused\n Factor ETF**

Small Cap Value ETF***\n

North Carolina Intermediate\n Tax-Free ETF****

Virginia Intermediate\n Tax-Free ETF*****

$10,001-$50,000

None

$10,001-$50,000

None

>$100,000

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

\n *	\n Reflects\n the dollar\n range of\n equity securities\n beneficially owned in\n the Predecessor\n Behavioral Large Cap Value Equity Fund by\n the Trustees\n as of\n December 31,\n 2025.
\n **	\n Reflects\n the dollar\n range of\n equity securities beneficially\n owned in\n the Predecessor\n Behavioral Small Cap Value Equity Fund by\n the Trustees\n as of\n December 31,\n 2025.
\n ***	\n Reflects\n the dollar\n range of\n equity securities beneficially\n owned in\n the Predecessor\n Small Cap Value Fund by the\n Trustees as\n of December\n 31, 2025.
\n ****	\n Reflects\n the dollar\n range of\n equity securities beneficially\n owned in\n the Predecessor\n North Carolina Intermediate Tax-Free Fund by the\n Trustees as\n of December\n 31, 2025.
\n *****	\n Reflects\n the dollar\n range of\n equity securities beneficially\n owned in\n the Predecessor\n Virginia Intermediate Tax-Free Fund by the\n Trustees as\n of December\n 31, 2025.

Because the Funds have not yet\ncommenced operations, as of the date of this SAI, the Trustees and officers of the Trust did not own any outstanding equity securities\nof the Funds.

TRUSTEE COMPENSATION

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

NAME OF PERSON, POSITION	AGGREGATE COMPENSATION FROM THE FUNDS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 20251	PENSION OR RETIREMENT BENEFITS ACCRUED AS PART OF FUND EXPENSES	ESTIMATED ANNUAL BENEFITS UPON RETIREMENT	TOTAL COMPENSATION FROM FUNDS AND FUND COMPLEX PAID TO TRUSTEES FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2025
Drew T. Kagan	None	N/A	N/A	$155,500
Laura C. Bingham	None	N/A	N/A	$139,000
Alan G. Priest	None	N/A	N/A	$131,500
Kimberly R. Storms	None	N/A	N/A	$131,500
David L. Wedding	None	N/A	N/A	$149,500
Scott A. Haenni	N/A	N/A	N/A	N/A

\n\n

The Funds had yet to commence investment\noperations as of September 30, 2025.

CODES\nOF ETHICS

Sterling Capital Funds and Sterling\nCapital have each adopted a code of ethics (“Codes”) pursuant to Rule 17j-1 of the 1940 Act, and these Codes permit personnel\ncovered by the Codes to invest in securities, including securities that may be purchased or held by each Fund, subject to certain restrictions.

INVESTMENT\nADVISER

Sterling Capital Management\nLLC (\"Sterling Capital\" or the \"Adviser\") is the investment adviser for the Funds. Sterling Capital, located at 4350 Congress Street,\nSuite 1000, Charlotte, NC 28209, is a North Carolina limited liability company and an indirect, wholly-owned subsidiary of Fédération\ndes caisses Desjardins du Québec (\"Desjardins\"). Desjardins is the largest financial cooperative in Canada and the eighth largest\nin the world, with assets of C$510.2 billion as of December 31, 2025. Sterling Capital manages and supervises the investment of the Funds'\nassets on a discretionary basis, subject to oversight by the Board of Trustees. Sterling Capital has provided investment management services\nto corporations, pension and profit sharing plans, trusts, estates and other institutions and individuals since 1970. As of September\n30, 2026, Sterling Capital has more than $67 billion in assets under management.

Pursuant to an investment advisory\nagreement between the Trust, on behalf of each Fund, and the Adviser (the “Investment Advisory Agreement”), the Adviser assumes\nall investment duties and has full discretionary power and authority with respect to the investment of the assets of each Fund. In that\ncapacity, the Adviser is responsible for making day-to-day investment decisions for each Fund and trading portfolio securities and other\ninvestment instruments on behalf of the Fund, including selecting broker-dealers to execute purchase and sale transactions.

For the services it provides\nto each Fund under the Investment Advisory Agreement, each Fund pays the Adviser fees, calculated daily and paid monthly, at an annual\nrate of 0.45% of the Sterling Capital Large Cap Value Focused Factor ETF’s average daily net assets, 0.60% of the Sterling Capital\nSmall Cap Value Focused Factor ETF’s average daily net assets, 0.75% of the Sterling Capital Small Cap Value ETF’s average\ndaily net assets, 0.35% of the Sterling Capital North Carolina Intermediate Tax-Free ETF’s average daily net assets, and 0.35% of\nthe Sterling Capital Virginia Intermediate Tax-Free ETF’s average daily net assets.

Pursuant to a unitary fee administrative\nservices agreement between the Trust, on behalf of the Funds, and the Adviser (the “Unitary Fee Administrative Services Agreement”),\nthe Adviser provides administrative services to each Fund and has agreed to pay all expenses incurred by each Fund except for (i) each\nFund’s fees payable to the Adviser under the Investment Advisory Agreement and Unitary Fee Administrative Services Agreement, (ii)\nexpenses incurred in connection with any distribution and service plan adopted by the Trust in compliance with Rule 12b-1 under the 1940\nAct, including distribution fees, if any, (iii) investment-related expenses of any kind, including all fees and expenses incurred with\nrespect to the acquisition, holding, voting and/or disposition of portfolio securities, and any expenses incurred with respect to the\nreorganization, restructuring or workout-related expenses related to any investment, and the execution of portfolio transactions (such\nas brokerage commissions, clearing and settlement costs, and any other kind of transaction expenses and costs associated with tax reclaims);\n(iv) borrowing and other investment-related costs and fees, including interest, commitment and other fees and costs; (v) acquired fund\nfees and expenses; (vi) interest expenses; (vii) taxes (including, but not limited to, income, excise, transfer and withholding taxes)\nand governmental fees; (viii) litigation expenses of any kind (including fees and expenses of counsel retained by or on behalf of the\nTrust or a Fund) and any fees, costs or expenses payable by the Trust or a Fund pursuant to indemnification or advancement obligations\nto which the Trust or such Fund may be subject (pursuant to contract or otherwise); (ix) custody or other expenses attributable to negative\ninterest rates on investments or cash; (x) short dividend expense; (xi) salaries and other compensation or expenses, including travel\nexpenses, of any of the Trust’s executive officers and employees, if any, who are not officers, directors, shareholders, members,\npartners or employees of the Adviser or its subsidiaries or affiliates; (xii) organizational and offering expenses of the Trust and the\nFunds; (xiii) costs related to any meetings of shareholders, including any costs associated with the preparation, printing, and transmission\nof proxy or information statements and proxy solicitation; (xiv) fees or expenses payable or other costs incurred in connection with a\nFund’s securities lending program; (xv) any other expenses which are capitalized in accordance with generally accepted accounting\nprinciples; (xvi) extraordinary expenses; and (xvii) such other expenses as approved by a majority of the Board.

For the services it provides\nto each Fund under the Unitary Fee Administrative Services Agreement, each Fund pays the Adviser fees, calculated daily and paid monthly,\nat an annual rate as follows: 0.10% of the Sterling Capital Large Cap Value Focused Factor ETF’s average daily net assets, 0.15%\nof the Sterling Capital Small Cap Value Focused Factor ETF’s average daily net assets, 0.10% of the Sterling Capital North Carolina\nIntermediate Tax-Free ETF’s average daily net assets, and 0.10% of the Sterling Capital Virginia Intermediate Tax-Free ETF’s\naverage daily net assets.

The Investment Advisory Agreement\nprovides that Sterling Capital shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Funds in\nconnection with the performance of such Investment Advisory Agreement, except a loss resulting from a breach of fiduciary duty with respect\nto the receipt of compensation for services or a loss resulting from willful misfeasance, bad faith, or gross negligence on the part of\nSterling Capital in the performance of its duties, or from reckless disregard by Sterling Capital of its duties and obligations thereunder.

Unless sooner terminated, the\nInvestment Advisory Agreement will continue in effect as to each of the Funds through January 31, 2027 and from year to year thereafter\nif such continuance is approved at least annually by the Funds’ Board of Trustees or by vote of the holders of a majority of the\noutstanding Shares of that Fund (as defined under “ADDITIONAL INFORMATION - ORGANIZATION AND DESCRIPTION OF SHARES”). The\nInvestment Advisory Agreement is terminable as to a particular Fund at any time upon 60 days written notice without penalty by the Trustees,\nby vote of the holders of a majority of the outstanding Shares of that Fund, or by Sterling Capital. The Investment Advisory Agreement\nalso terminates automatically in the event of any assignment, as defined in the 1940 Act.

Unless sooner terminated, the\nUnitary Fee Administrative Services Agreement will continue in effect as to each of the Funds through January 31, 2027 and from year to\nyear thereafter unless the Trust or the Adviser provides written notice to the other party of its intent not to renew or unless otherwise\nterminated. Such notice of non-renewal must be received not less than sixty (60) days prior to the expiration of the current term.

PORTFOLIO\nMANAGERS

The portfolio managers identified\nunder “Investment Management” in each Prospectus are responsible for the day-to-day management of the Funds. Each portfolio\nmanager may also have responsibility for the day-to-day management of accounts other than the Fund(s) for which he or she serves as portfolio\nmanager. Information regarding these accounts is set forth below.

NUMBER\nOF OTHER\nACCOUNTS MANAGED\nAND ASSETS\nBY ACCOUNT\nTYPE

AS OF September 30, 2026*

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

\n PORTFOLIO\n MANAGER	\n OTHER\n REGISTERED INVESTMENT\n COMPANIES	\n OTHER\n POOLED INVESTMENT\n VEHICLES	\n OTHER\n ACCOUNTS
\n Robert W.\n Bridges	\n Number:\n 0	\n Number:\n 0	\n Number: 10
\n	\n Assets:\n $0	\n Assets:\n $0	\n Assets: $605.64MM
\n Robert O.\n Weller	\n Number:\n 0	\n Number:\n 0	\n Number: 10
\n	\n Assets:\n $0	\n Assets:\n $0	\n Assets: $605.64MM
\n Gerald M.\n Van Horn	\n Number:\n 0	\n Number:\n 0	\n Number: 20
\n	\n Assets:\n $0	\n Assets:\n $0	\n Assets: $15.51MM
\n Andrew T.\n DiZio	\n Number: 0	\n Number:\n 0	\n Number: 0
\n	\n Assets:\n $0	\n Assets: $0	\n Assets: $0
\n Michael P. McVicker	\n Number:\n 0	\n Number:\n 0	\n Number: 26
\n	\n Assets:\n $0	\n Assets:\n $0	\n Assets: $531.69MM
\n Mark Merullo	\n Number:\n 0	\n Number:\n 0	\n Number: 97
\n	\n Assets:\n $0	\n Assets:\n $0	\n Assets: $1,071.71MM

\n \n \n \n

\n *	\n If an\n account has\n a co-manager,\n the total\n number of\n accounts and\n assets has\n been allocated\n to each\n respective manager.\n Therefore, some\n accounts and\n assets have\n been counted more than once.

CONFLICTS\nOF INTEREST

From time to time, potential\nconflicts of interest may arise between a portfolio manager’s management of the investments of a Fund and the management of other\nregistered investment companies, pooled investment vehicles and other accounts (collectively, the “Managed Accounts”). The\nManaged Accounts might have similar investment objectives or strategies as a Fund, track the same indexes a Fund tracks or otherwise hold,\npurchase, or sell securities that are eligible to be held, purchased or sold by a Fund. The Managed Accounts might also have different\ninvestment objectives or strategies than a Fund. Consequently, portfolio managers may purchase or sell securities for one Fund and not\nfor a Managed Account.

Sterling Capital manages portfolios\nfor multiple institutional, individual, and mutual fund clients. Each portfolio has its own set of investment objectives and investment\npolicies that may differ from those of a Fund. The portfolio managers make investment decisions for each portfolio based on the investment\nobjectives and policies and other relevant investment considerations applicable to that portfolio. Accordingly, a particular portfolio\nmay contain different securities than a Fund, and investment decisions may be made in other accounts that are different than the decisions\nmade for a Fund. As an example, the portfolio manager may decide to buy a security in one or more portfolios, while selling the same security\nin other portfolios based on the different objectives, restrictions, and cash flows in the portfolios. In addition, some of these portfolios\nhave fee structures, including performance fees, which are, or have the potential to be, higher than the fees paid by a Fund to Sterling\nCapital. Because performance fees are tied to performance, the incentives associated with any given portfolio may be higher or lower than\nthose associated with other accounts managed by the firm. In addition, Sterling Capital will serve as investment adviser to portfolios\nwhere it or its affiliates or related persons provided the initial investment or seed capital for a new investment portfolio. Further,\nthe management of multiple Managed Accounts may result in portfolio managers devoting unequal time and attention to the management of\neach Managed Account. Although the Adviser does not track the time a portfolio manager spends on a single portfolio, it does periodically\nassess whether the portfolio manager has adequate time and resources to effectively manage all of the accounts for which he or she is\nresponsible. Other potential conflicts might include those relating to selection of brokers or dealers to execute portfolio trades and/or\nspecific uses of commissions from portfolio trades (for example, research, or “soft dollars”).

As an independently-operated\nindirect subsidiary of Desjardins Global Asset Management Inc. and an indirect, wholly-owned subsidiary of Fédération des caisses\nDesjardins du Québec, Sterling Capital is affiliated with various advisers and other financial entities, under common ownership with\nFédération des caisses Desjardins du Québec. From time to time, Sterling Capital may engage in business activities with\nsome of these companies, subject to their policies and procedures governing how they handle conflicts of interest. These activities will\nfrom time to time give rise to conflicts of interest in the allocation of investment opportunities among clients.

The Adviser’s objective\nis to meet its fiduciary obligation to treat all clients fairly. To help accomplish this objective and to address potential conflicts\nof interest, Sterling Capital has adopted and implemented policies and procedures reasonably designed to allocate investment opportunities\non a fair and equitable basis over time. Compliance procedures include actively monitoring compliance with investment policies, trade\nallocation, and Code of Ethics requirements. In addition, the Adviser’s senior management team reviews the performance of portfolio managers\nand analysts.

PORTFOLIO MANAGER COMPENSATION

The Adviser

Sterling Capital offers each\nof its investment professionals a compensation plan which can be comprised of three components: (1) base salary, which is fixed and linked\nto job function, responsibilities, and experience; (2) incentive compensation, which varies based on investment performance and other\nfactors determined by the executive management of Sterling Capital; and (3) a percentage of firm profits or revenues, which varies based\non factors determined by executive management. Incentive compensation is based on (i) the pre-tax performance of the strategies managed\nby the portfolio manager in comparison to benchmarks appropriate for such strategies and/ or in comparison to relevant peer groups (e.g.,\nBloomberg, FTSE Russell, ICE, Lipper, Morningstar, etc.) over pre-determined time periods (e.g.,\na combination of 1- and 3-year returns), and (ii) other objective or subjective criteria determined by executive management, which may\ninclude firm/department leadership, management of personnel, risk management/ compliance results, and overall firm or group contribution.\nInvestment professionals’ compensation may also include a share of the revenues earned from a particular strategy or from a particular\nteam, any such allocation to be approved by executive management. Any profit interests awarded to a portfolio manager would be based on\nthe determination of executive management, which may consider a number of factors in the granting of such awards, including long-term\nperformance, firm/department leadership, potential for generating future growth of the firm, and other objective or subjective criteria\nthat may be set by executive management.

SECURITIES\nOWNERSHIP

The following table discloses\nthe dollar range of equity securities of each of the Funds beneficially owned by the portfolio managers in each of the Funds for which\nthey are primarily responsible as of September 30, 2026, unless otherwise noted below:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

\n NAME\n OF PORTFOLIO\n MANAGER	\n DOLLAR\n RANGE OF\n EQUITY SECURITIES\n IN EACH\n FUND
\n Robert W. Bridges	\n Large\n Cap Value Focused Factor ETF: Over $1m* \n Small\nCap Value Focused Factor ETF:Over $1m**
\n Robert O. Weller	\n Large\n Cap Value Focused Factor ETF: Over $1m* \n Small\nCap Value Focused Factor ETF: Over $1m**
\n Gerald M. Van Horn	\n Small\nCap Value ETF: Over $1m***
\n Andrew T. DiZio	\n Small\nCap Value ETF: $100,001 to $500,000***
\n Michael P. McVicker	\n North\nCarolina Intermediate Tax-Free ETF: None** \n Virginia\n Intermediate Tax-Free ETF: None***
\n Mark Merullo	\n North\nCarolina Intermediate Tax-Free ETF: None** \n Virginia\n Intermediate Tax-Free ETF: None***

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

\n *	\n Reflects\n the dollar\n range of\n equity securities\n beneficially owned in\n the Predecessor\n Behavioral Large Cap Value Equity Fund by\n the portfolio managers\n as of\n September 30, 2026.
\n **	\n Reflects\n the dollar\n range of\n equity securities beneficially\n owned in\n the Predecessor\n Behavioral Small Cap Value Equity Fund by\n the portfolio managers\n as of\n September 30, 2026.
\n ***	\n Reflects the dollar range of equity\n securities beneficially owned in the Predecessor Small\n Cap Value Fund by the portfolio\n managers as of\n September 30, 2026.
\n ****	\n Reflects\n the dollar\n range of\n equity securities beneficially\n owned in\n the Predecessor\n North Carolina Intermediate Tax-Free Fund by\n the portfolio managers\n as of\n September 30, 2026.
\n *****	\n Reflects\n the dollar\n range of\n equity securities beneficially\n owned in\n the Predecessor\n Virginia Intermediate Tax-Free Fund by\n the portfolio managers\n as of\n September 30, 2026.

PROXY VOTING POLICIES AND PROCEDURES

The Board of Trustees has delegated\nthe authority to vote proxies on behalf of the Funds that own voting securities to Sterling Capital. Proxy voting policies and procedures\nor summaries thereof are attached for Sterling Capital as Appendix B.

You may obtain information about\nhow a Fund voted proxies related to its portfolio securities during the 12-month period ended June 30 by visiting the SEC’s Web\nsite at www.sec.gov or by visiting our Web site at: www.sterlingcapital.com/etf or by contacting us in writing at Sterling Capital Funds,\nc/o Ultimus Fund Solutions, LLC, P.O. Box 46707, Cincinnati, OH 45246 or by calling (888) 637-7798 and the information will be sent within\nthree business days of receipt of a request.

PORTFOLIO\nTRANSACTIONS

The Investment Advisory Agreement\nfor each Fund provides that the Adviser is responsible for selecting securities to be bought and sold as well as brokers to execute those\ntransactions. Purchases and sales of portfolio securities with respect to certain Funds usually are principal transactions in which portfolio\nsecurities are normally purchased directly from the issuer or from an underwriter or market maker for the securities. Purchases from underwriters\nof portfolio securities generally include a commission or concession paid by the issuer to the underwriter and purchases from dealers\nserving as market makers may include the spread between the bid and asked price. Transactions on stock exchanges (including purchases\nand sales of ETFs) involve the payment of negotiated brokerage commissions. Transactions in the over-the-counter market are generally\nprincipal transactions with dealers. With respect to the over-the-counter market, the Funds, where possible, will deal directly with dealers\nwho make a market in the securities involved except in those circumstances where better price and execution are available elsewhere. While\nthe Adviser generally seeks competitive spreads or commissions, the Funds may not necessarily pay the lowest spread or commission available\non each transaction, for reasons discussed below.

During the following fiscal years, the Funds listed\nbelow paid the following aggregate brokerage commissions:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

\n	\n FISCAL\n YEAR ENDED \nSEPTEMBER 30, 2025¹	\n FISCAL\n YEAR ENDED \nSEPTEMBER 30, 2024²	\n FISCAL\n YEAR ENDED \nSEPTEMBER 30, 2023³
\n	\n AGGREGATE\n TRANSACTIONS	\n BROKERAGE\n COMMISSION	\n AGGREGATE\n TRANSACTIONS	\n BROKERAGE\n COMMISSION	\n AGGREGATE\n TRANSACTIONS	\n BROKERAGE\n COMMISSION
\n Sterling Capital Large Cap Value Focused Factor\n ETF	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A
\n Sterling Capital Small Cap Value Focused Factor\n ETF	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A
\n Sterling Capital Small Cap Value ETF	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A
\n Sterling Capital North Carolina Intermediate\n Tax-Free ETF	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A
\n Sterling Capital Virginia Intermediate Tax-Free\n ETF	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A

\n \n \n \n

\n 1	\n The Funds\n had yet\n to commence\n investment operations\n as of\n September 30,\n 2025.

\n \n \n \n

\n 2	\n The Funds\n had yet\n to commence\n investment operations\n as of\n September 30,\n 2024.

\n \n \n \n

\n 3	\n The Funds\n had yet\n to commence\n investment operations\n as of\n September 30,\n 2023.

Allocation of transactions,\nincluding their frequency, to various dealers is determined by Sterling Capital in a manner deemed fair and reasonable. The major consideration\nin allocating brokerage business is the assurance that the best execution is being received on all transactions effected for all accounts.\nAs detailed in the above chart, brokerage may be directed to brokers because of research services provided. Brokerage will at times be\nallocated to firms that supply research, statistical data and other services when the terms of the transaction and the capabilities of\ndifferent broker/dealers are consistent with the guidelines set forth in Section 28(e) of the Exchange Act. Information so received is\nin addition to and not in lieu of services required to be performed by Sterling Capital and does not reduce the advisory fees payable\nto Sterling Capital. Such information may be useful to Sterling Capital in serving both Sterling Capital Funds and other clients and,\nconversely, supplemental information obtained by the placement of business of other clients may be useful to Sterling Capital in carrying\nout its obligations to Sterling Capital Funds.

To the extent research services\nmay be a factor in selecting brokers, such services may be in written form or through direct contact with individuals and may include\ninformation as to particular companies and securities as well as market, economic, or institutional areas and information which assists\nin the valuation and pricing of investments. Examples of research-oriented services for which the Adviser might utilize Fund commissions\ninclude research reports and other information on the economy, industries, sectors, groups of securities, individual companies, statistical\ninformation, political developments, technical market action, pricing and appraisal services, credit analysis, risk measurement analysis,\nperformance and other analysis. Sterling Capital may use research services furnished by brokers in servicing all client accounts and not\nall services may necessarily be used in connection with the account that paid commissions to the broker providing such services. Information\nso received by the Adviser will be in addition to and not in lieu of the services required to be performed by Sterling Capital under its\nInvestment Advisory Agreement. Any advisory or other fees paid to Sterling Capital are not reduced as a result of the receipt of research\nservices.

In some cases, Sterling Capital\nmay receive a service from a broker that has both a “research” and a “non-research” use. When this occurs, Sterling\nCapital makes a good faith allocation, under all the circumstances, between the research and non-research uses of the service. The percentage\nof the service that is used for research purposes may be paid for with client commissions, while Sterling Capital will use its own funds\nto pay for the percentage of the service that is used for non-research purposes. In making this good faith allocation, Sterling Capital\nfaces a potential conflict of interest, but Sterling Capital believes that its allocation procedures are reasonably designed to ensure\nthat Sterling Capital appropriately allocates the anticipated use of such services to their research and non-research uses.

To the extent permitted by applicable\nrules and regulations, Sterling Capital may execute portfolio transactions on behalf of the Funds through affiliates. As required by Rule\n17e-1 under the 1940 Act, the Funds have adopted procedures which provide that commissions paid to such affiliate must be fair and reasonable\ncompared to the commission, fees or other remuneration paid to other brokers in connection with comparable transactions. The procedures\nalso provide that the Board of Trustees will review reports of such affiliated brokerage transactions in connection with the foregoing\nstandard.

Investment decisions for each\nFund are made independently from those for the other Sterling Capital Funds or any other investment company or account managed by Sterling\nCapital. Any such other investment company or account may also invest in the same securities as the Funds. When a purchase or sale of\nthe same security is made at substantially the same time on behalf of a Fund and another Sterling Capital Fund, investment company or\naccount, the transaction will be averaged as to price and available investments will be allocated as to amount in a manner which Sterling\nCapital believes to be fair and equitable over time to the Fund(s) and such other investment company or account. In some instances, this\ninvestment procedure may adversely affect the price paid or received by a Fund or the size of the position obtained by a Fund. To the\nextent permitted by law, Sterling Capital may aggregate the securities to be sold or purchased for a Fund with those to be sold or purchased\nfor the other Sterling Capital Funds or for other investment companies or accounts in order to obtain best execution. As provided by the\nInvestment Advisory Agreement, in making investment recommendations for the Funds, Sterling Capital will provide its services in accordance\nwith its fiduciary obligations and will manage each Fund in the best interests of such Fund.

SECURITIES OF “REGULAR\nBROKER-DEALERS.” The Funds are required to identify any securities of its “regular brokers and dealers” (as such term\nis defined in the 1940 Act) which the Funds hold at the close of their most recent fiscal year. As the Funds are newly formed, the Funds\ndid not hold any such securities as of September 30, 2025, however, with respect to the Predecessor Funds, as of September 30, 2025:

• The Predecessor\nBehavioral Large Cap Value Equity Fund held debt securities of Morgan Stanley & Co., Inc. and Wells Fargo Securities, LLC valued at\n$965,205 and $784,388, respectively.

ADMINISTRATOR

Sterling Capital, 434 Fayetteville\nSt., Suite 500, Raleigh, NC 27601, serves as the Administrator (the “Administrator”) to each Fund pursuant to an Administration\nAgreement effective October 1, 2010, as amended.

Under the Administration Agreement,\nthe Administrator has agreed to maintain office facilities for the Funds, to maintain the

Funds’ financial accounts and records, and\nto furnish the Funds statistical and research data and certain bookkeeping services, and certain other services required by the Funds.\nThe Administrator prepares annual and semi-annual reports to the SEC, prepares federal and state tax returns, prepares filings with state\nsecurities commissions, and generally assists in supervising all aspects of the Funds’ operations and compliance and listing requirements\nfor the Funds (other than those performed by Sterling Capital under the Investment Advisory Agreement, those performed by U.S. Bank National\nAssociation under their custodial services agreements with the Funds, those performed by Ultimus Fund Solutions under its fund accounting\nagreement with the Funds, and those performed by Ultimus Fund Solutions under its shareholder services agreement and blue sky service\nagreement with the Funds). Under the Administration Agreement, the Administrator may delegate all or any part of its responsibilities\nthereunder.

Under the Administration Agreement\nfor expenses assumed and services provided as administrator, the Administrator receives a fee, subject to each Fund’s unitary fee\narrangement, from each series of the Sterling Capital Funds that is calculated based upon each series of the Sterling Capital Funds’\naverage net assets as well as the average net assets of the remaining series of Sterling Capital Funds. The fee shall be calculated at\nan annual rate of 0.091%, applicable to the first $3.5 billion of average net assets, at an annual rate of 0.075% of the next $1 billion\nof average net assets, at the annual rate of 0.06% of the next $1.5 billion of average net assets, and at the annual rate of 0.04% of\naverage net assets in excess of $6 billion. The fee shall be computed daily and paid monthly. In addition to paying the Administrator\nthe fees set forth in the Administration Agreement, the Fund shall also reimburse the Administrator for its reasonable out-of-pocket expenses,\nincluding but not limited to the travel and lodging expenses incurred by officers and employees of the Administrator in connection with\nattendance at Board meetings.

Alternatively, the Funds may\npay a fee as may from time to time be agreed upon in writing by Sterling Capital Funds and the Administrator. A fee agreed to in writing\nfrom time to time by the Funds and the Administrator may be significantly lower than the fee calculated at the annual rate and the effect\nof such lower fee would be to lower a Fund’s expenses and increase the net income of such Fund during the period when such lower\nfee is in effect.

For its services as administrator\nand expenses assumed pursuant to the Administration Agreement, the Administrator received the following fees (“Paid” indicates\ngross administration fees and “Waived” are fees waived from gross administration fees and/or reimbursed directly to the Fund):

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

\n	\n FISCAL\n YEAR ENDED \n SEPTEMBER 30, 2025¹	\n FISCAL\n YEAR ENDED \nSEPTEMBER 30, 2024²	\n FISCAL\n YEAR ENDED \nSEPTEMBER 30, 2023³
\n	\n PAID	\n ADDITIONAL\n AMOUNT WAIVED	\n PAID	\n ADDITIONAL\n AMOUNT WAIVED	\n PAID	\n ADDITIONAL\n AMOUNT WAIVED
\n Sterling Capital Large Cap Value Focused Factor\n ETF	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A
\n Sterling Capital Small Cap Value Focused Factor\n ETF	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A
\n Sterling Capital Small Cap Value ETF	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A
\n Sterling Capital North Carolina Intermediate\n Tax-Free ETF	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A
\n Sterling Capital Virginia Intermediate Tax-Free\n ETF	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A	\n N/A

\n \n \n \n

\n 1	\n The Funds\n had yet\n to commence\n investment operations\n as of\n September 30,\n 2025.

\n \n \n \n

\n 2	\n The Funds\n had yet\n to commence\n investment operations\n as of\n September 30,\n 2024.

\n \n \n \n

\n 3	\n The Funds\n had yet\n to commence\n investment operations\n as of\n September 30,\n 2023.

The Administration Agreement\nshall, unless sooner terminated as provided in the Administration Agreement (described below), continue for a period of three years (the\n“Initial Term”). Thereafter, the Administration Agreement shall be renewed automatically for successive one year terms (the\n“Renewal Terms”), unless written notice not to renew is given by the non-renewing party to the other party at least 60 days\nprior to the expiration of the Initial Term or the then-current Renewal Term. The Administration Agreement is also terminable with respect\nto a particular Fund only upon mutual agreement of the parties to the Administration Agreement or for cause (as defined in the Administration\nAgreement) on not less than 60 days written notice by the party alleging cause.

The Administration Agreement\nprovides that the Administrator shall not be liable for any loss suffered by the Funds in connection with the matters to which the Administration\nAgreement relates, except a loss resulting from willful misfeasance, bad faith,

or negligence in the performance of its duties, or\nfrom the reckless disregard by the Administrator of its obligations and duties thereunder, except as otherwise provided by applicable\nlaw.

SUB-ADMINISTRATOR

Ultimus Fund Solutions, 225\nPictoria Dr. Suite 450, Cincinnati, OH 45246, serves as sub-administrator to the Funds pursuant to a Sub-Administration Agreement dated\nAugust 18, 2026 (the “Sub-Administration Agreement”). Under the Sub-Administration Agreement, the Sub-Administrator has agreed\nto assume many of the Administrator’s duties, for which Ultimus Fund Solutions receives a fee, paid by the Administrator, that is\ncalculated based upon each portfolio of the Funds’ average net assets. The fee shall be calculated at the annual rate of 0.0225%\napplicable to the first $1 billion of average net assets, at the annual rate of 0.0205% applicable to the next $4 billion of average net\nassets, and at the annual rate of 0.0145% applicable to net assets in excess of $5 billion. In addition, Ultimus Fund Solutions will receive\na basket servicing fee charge.

UNDERWRITER

Sterling Capital Distributors,\nLLC, Three Canal Plaza, Suite 100, Portland, ME 04101, serves as principal underwriter to each Fund pursuant to a Distribution Agreement\neffective as of November 21, 2025 (the “Underwriting Agreement”). The Underwriting Agreement provides that, unless sooner\nterminated it will continue in effect for two years from its effective date, and thereafter from year to year if such continuance is approved\nat least annually (i) by the Funds’ Board of Trustees or by the vote of a majority of the outstanding Shares of the Funds or Fund\nsubject to such Underwriting Agreement, and (ii) by the vote of a majority of the Trustees of the Funds who are not parties to such Underwriting\nAgreement or interested persons (as defined in the 1940 Act) of any party to such Underwriting Agreement, cast in person at a meeting\ncalled for the purpose of voting on such approval. The Underwriting Agreement may be terminated in the event of any assignment, as defined\nin the 1940 Act. The Distributor is not affiliated with the Adviser, or any other service provider for the Trust.

Under the Underwriting Agreement\nthe Distributor acts as the agent of the Trust in connection with the continuous offering of Shares of the Fund. Shares are continuously\noffered for sale by the Funds through the Distributor only in large blocks of shares, typically 10,000 shares, called Creation Units.\nShares in less than Creation Units are not distributed by the Distributor. The Distributor has no obligation to sell any specific quantity\nof Fund Shares and the Distributor and its officers have no roles in determining the investment policies or which securities are to be\npurchased or sold by the Trust. The Distributor shall be entitled to no compensation or reimbursement of expenses from the Trust for the\nservices provided by the Distributor pursuant to the Underwriting Agreement. The Distributor may receive compensation from the Adviser\nrelated to its services thereunder or for additional services as may be agreed to between the Adviser and Distributor.

The Distributor may receive\npayment from the Funds for distribution activities permitted and authorized under a distribution plan adopted by the Funds in accordance\nwith Rule 12b-1 under the 1940 Act (the “Distribution Plan”). Under the Distribution Plan, a Fund may pay a monthly distribution\nfee to the Distributor as compensation for its services in connection with the Distribution Plan at an annual rate equal to 0.25% of the\naverage daily net assets of each Fund. The Adviser may also compensate the Distributor for services provided to the Funds under the Underwriting\nAgreement that either (i) are not authorized under the Distribution Plan or (ii) represent amounts incurred in excess of the fee payable\nunder the Distribution Plan.

No payments pursuant to the\nDistribution Plan are currently paid by the Funds, and there are no plans to impose these fees in the future. These fees may only be imposed\nafter further approval by the Board. Because these fees, if imposed, would be paid out of the Fund’s assets on an ongoing basis,\nif payments are made in the future, these fees would increase the cost of your investment and may cost you more than paying other types\nof sales charges.

The Distribution Plan was initially\napproved on October 6, 2026 by the Funds’ Board of Trustees, including a majority of the trustees who are not interested persons\nof the Fund (as defined in the 1940 Act) and who have no direct or indirect financial interest in the Distribution Plan (the “Independent\nTrustees”).

In accordance with Rule 12b-1\nunder the 1940 Act, the Distribution Plan may be terminated with respect to any Fund by a vote of a majority of the Independent Trustees,\nor by a vote of a majority of the outstanding Shares of that Fund. The Distribution Plan may be amended by vote of the Fund’s Board\nof Trustees, including a majority of the Independent Trustees, cast in person at a meeting called for such purpose, except that any change\nin the Distribution Plan that would materially increase the distribution fee with respect to a Fund requires the approval of the holders\nof that Fund’s Shares. Sterling Capital Funds’ Board of Trustees will review on a quarterly and annual basis written reports\nof the amounts received and expended under the Distribution Plan (including amounts expended by the Distributor to Participating Organizations\npursuant to the Servicing Agreements entered into under the Distribution Plan) indicating the purposes for which such expenditures were\nmade.

The Distributor may use the\ndistribution fee to provide distribution assistance with respect to a Fund’s Shares or to provide shareholder services to the holders\nof such Shares. The Distributor may also use the distribution fee (i) to pay financial institutions and

intermediaries (such as insurance companies and investment\ncounselors but not including banks), broker-dealers, and the Distributor compensation for services or reimbursement of expenses incurred\nin connection with distribution assistance or (ii) to pay banks, other financial institutions and intermediaries, broker-dealers, and\nthe Distributor compensation for services or reimbursement of expenses incurred in connection with the provision of shareholder services.\nThese payments to financial institutions may include payments to affiliates of Sterling Capital. All payments by the Distributor for distribution\nassistance or shareholder services under the Distribution Plan will be made pursuant to an agreement (a “Servicing Agreement”)\nbetween the Distributor and a Participating Organization. A Servicing Agreement will relate to the provision of distribution assistance\nin connection with the distribution of a Fund’s Shares to the Participating Organization’s customers on whose behalf the investment\nin such Shares is made and/or to the provision of shareholder services to the Participating Organization’s customers owning a Fund’s\nShares.

The distribution fee will be\npayable without regard to whether the amount of the fee is more or less than the actual expenses incurred in a particular year by the\nDistributor in connection with distribution assistance or shareholder services rendered by the Distributor itself or incurred by the Distributor\npursuant to the Servicing Agreements entered into under the Distribution Plan. The Distributor sets aside distribution fees in a retention\naccount that is used solely for distribution related expenses.

The Distribution Plan also contains\na so-called “defensive” provision applicable to all Shares. Under this defensive provision to the extent that any payment,\nincluding payment of administration fees, should be deemed to be indirect financing of any activity primarily intended to result in the\nsale of Shares issued by the Funds within the context of Rule 12b-1 under the 1940 Act, such payment shall be deemed to be authorized\nby the Distribution Plan.

EXPENSES

Sterling Capital bears all expenses\nin connection with the performance of its services as Adviser and Administrator. Under the Unitary Fee Administrative Services Agreement,\neach Fund has entered into a unitary fee arrangement with the Administrator whereby each Fund pays the Administrator a fee and the Administrator\nhas agreed to pay all expenses incurred by each Fund except for (i) each Fund’s fees payable to the Adviser under the Investment\nAdvisory Agreement and the Unitary Fee Administrative Services Agreement, (ii) expenses incurred in connection with any distribution and\nservice plan adopted by the Trust in compliance with Rule 12b-1 under the 1940 Act, including distribution fees, if any, (iii) investment-related\nexpenses of any kind, including all fees and expenses incurred with respect to the acquisition, holding, voting and/ or disposition of\nportfolio securities, and any expenses incurred with respect to the reorganization, restructuring or workout-related expenses related\nto any investment, and the execution of portfolio transactions (such as brokerage commissions, clearing and settlement costs, and any\nother kind of transaction expenses and costs associated with tax reclaims); (iv) borrowing and other investment-related costs and fees,\nincluding interest, commitment and other fees and costs; (v) acquired fund fees and expenses; (vi) interest expenses; (vii) taxes (including,\nbut not limited to, income, excise, transfer and withholding taxes) and governmental fees; (viii) litigation expenses of any kind (including\nfees and expenses of counsel retained by or on behalf of the Trust or a Fund) and any fees, costs or expenses payable by the Trust or\na Fund pursuant to indemnification or advancement obligations to which the Trust or such Fund may be subject (pursuant to contract or\notherwise); (ix) custody or other expenses attributable to negative interest rates on investments or cash; (x) short dividend expense;\n(xi) salaries and other compensation or expenses, including travel expenses, of any of the Trust’s executive officers and employees,\nif any, who are not officers, directors, shareholders, members, partners or employees of the Adviser or its subsidiaries or affiliates;\n(xii) organizational and offering expenses of the Trust and the Funds; (xiii) costs related to any meetings of shareholders, including\nany costs associated with the preparation, printing, and transmission of proxy or information statements and proxy solicitation; (xiv)\nfees or expenses payable or other costs incurred in connection with a Fund’s securities lending program; (xv) any other expenses\nwhich are capitalized in accordance with generally accepted accounting principles; (xvi) extraordinary expenses; and (xvii) such other\nexpenses as approved by a majority of the Board.

Pursuant to the American Institute\nof Certified Public Accountants (AICPA) Statement of Position (SOP) 98-5, any Fund organizational or start-up costs incurred on or after\nJanuary 1, 1999 will be expensed as they are incurred.

CUSTODIAN

U.S. Bank, National Association (“USBNA”),\n425 Walnut Street, M.L. CN-OH-W6TC, Cincinnati, OH 45202, serves as the Custodian to the Funds.

TRANSFER\nAGENT

U.S. Bancorp Fund Services,\nLLC (d/b/a U.S. Bank Global Fund Services) (“U.S. Bank”), 777 E Wisconsin Ave, Milwaukee, WI 53202, serves as transfer agent\nto the Funds. U.S. Bank receives a fee based on the type of services provided to the Funds as agreed upon by the Funds and U.S. Bank.

FUND\nACCOUNTING SERVICES

Ultimus Fund Solutions provides\nfund accounting services to the Funds. For its services, Ultimus Fund Solutions receives a fee from a Fund, subject to the Fund’s\nunitary fee arrangement, calculated at the annual rate of 0.0125% applicable to the first $1 billion of average net assets, at the annual\nrate of 0.0100% applicable to the next $4 billion of average net assets, and at the annual rate of 0.0045% applicable to net assets in\nexcess of $5 billion.

INDEPENDENT\nREGISTERED PUBLIC\nACCOUNTING FIRM

Cohen & Company, Ltd. (“Cohen\n& Co”) has been selected as the independent registered public accounting firm. The address of Cohen & Co is 1350 Euclid\nAve., Suite 800, Cleveland, OH 44115.

LEGAL\nCOUNSEL

Ropes & Gray LLP, One Prudential Tower, 800 Boylston\nStreet, Boston, MA 02199-3600, is counsel to the Funds.

ADDITIONAL\nINFORMATION

ORGANIZATION AND DESCRIPTION OF SHARES

Sterling Capital Funds was organized\nas a Massachusetts business trust by the Agreement and Declaration of Trust, dated October 1, 1987, under the name “Shelf Registration\nTrust IV.” A copy of Sterling Capital Funds’ Amended and Restated Agreement and Declaration of Trust dated August 27, 2025\n(the “Declaration of Trust”) is on file with the Secretary of The Commonwealth of Massachusetts. The Declaration of Trust\nauthorizes the Board of Trustees to issue an unlimited number of Shares, which are units of beneficial interest. The Funds’ Declaration\nof Trust authorizes the Board of Trustees to divide or redivide any unissued Shares of Sterling Capital Funds into one or more additional\nseries. Additionally, the Funds’ Declaration of Trust authorizes the Board of Trustees to issue or redeem Creation Units of any\nETF and charge transaction fees relating to such action. The Board of Trustees may, in their sole discretion, determine the number of\nshares constituting a Creation Unit and may change the size of a Creation Unit from time to time without shareholder approval.

Shares have no subscription\nor preemptive rights and only such conversion or exchange rights as the Board of Trustees may grant in its discretion. When issued for\npayment as described in the Prospectuses and this SAI, the Funds’ Shares will be fully paid and non-assessable. In the event of\na liquidation or dissolution of the Funds, shareholders of a Fund are entitled to receive the assets available for distribution belonging\nto that Fund, and a proportionate distribution, based upon the relative asset values of the respective Funds, of any general assets not\nbelonging to any particular Sterling Capital Fund which are available for distribution.

Shares of the Funds are entitled to one vote per\nshare on such matters as shareholders are entitled to vote.

As used in this SAI, a “vote\nof a majority of the outstanding Shares” of the Funds or a particular Fund means the affirmative vote, at a meeting of shareholders\nduly called, of the lesser of (a) 67% or more of the votes of shareholders of the Funds or such Fund present at such meeting at which\nthe holders of more than 50% of the votes attributable to the shareholders of record of Sterling Capital Funds or such Fund are represented\nin person or by proxy, or (b) the holders of more than 50% of the outstanding votes of shareholders of Sterling Capital Funds or such\nFund.

SHAREHOLDER\nAND TRUSTEE\nLIABILITY

Under Massachusetts law, shareholders\ncould, under certain circumstances, be held personally liable for the obligations of the Funds. However, the Funds’ Declaration\nof Trust disclaims shareholder liability for acts or obligations of the Funds and requires that notice of such disclaimer be given in\nevery agreement, obligation or instrument entered into or executed by the Funds or the Trustees. The Declaration of Trust provides for\nindemnification out of a Fund’s property for all loss and expense of any shareholder of such Fund held liable on account of being\nor having been a shareholder. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited\nto circumstances in which a Fund would be unable to meet its obligations.

The Declaration of Trust states\nfurther that no Trustee, officer or agent of the Funds shall be personally liable in connection with the administration or preservation\nof the assets of the Funds or the conduct of the Funds’ business; nor shall any Trustee, officer, or agent be personally liable\nto any person for any action or failure to act except for his own bad faith, willful misfeasance, gross negligence, or reckless disregard\nof his duties. The Declaration of Trust also provides that all persons having any claim against the Trustees or the Funds shall look solely\nto the assets of the Funds for payment.

MISCELLANEOUS

Sterling Capital Funds may include\ninformation in its Annual Reports and Semi-Annual Reports to shareholders that (1) describes general economic trends, (2) describes general\ntrends within the financial services industry or the mutual fund industry, (3) describes past or anticipated portfolio holdings for one\nor more of the Funds within Sterling Capital Funds, or (4) describes investment

management strategies for such Funds. Such information\nis provided to inform shareholders of the activities of Sterling Capital Funds for the most recent fiscal year or half-year and to provide\nthe views of the Adviser and/or Sterling Capital Funds officers regarding expected trends and strategies.

Sterling Capital Funds is registered\nwith the SEC as a management investment company. Such registration does not involve supervision by the SEC of the management or policies\nof the Funds.

There is no beneficial ownership information to report\nfor Shares of Funds because the Funds had not yet commenced operations as of this date.

Many states have unclaimed property\nrules that provide for transfer to the state (also known as “escheatment”) of unclaimed property under various circumstances.\nThese circumstances include inactivity (e.g., no owner-initiated contact for a certain period),\nreturned mail (e.g., when mail sent to a shareholder is returned by the post office as undeliverable),\nor a combination of both inactivity and returned mail. If a Fund identifies property as unclaimed, it will attempt to contact the shareholder,\nbut if that attempt is unsuccessful, the account may be considered abandoned and escheated to the state after the passage of a certain\nperiod of time (as required by applicable state law).

If you are a resident of the\nState of Texas, you may designate a representative to receive escheatment notifications by completing and submitting a designation form,\nwhich you can find on the website of the Texas Comptroller. Designating such a representative may be beneficial, since Texas law provides\nthat the escheatment period will cease if the representative, after receiving an escheatment notification regarding your account, communicates\nknowledge of your location and confirms that you have not abandoned your account. You can mail a completed designation form to a Fund\n(if you hold Shares directly with a Fund) or to your financial intermediary (if you do not hold Shares directly with a Fund).

The Prospectuses of the Funds\nand this SAI omit certain of the information contained in the Registration Statement filed with the SEC. Copies of such information may\nbe obtained from the SEC upon payment of the prescribed fee.

FINANCIAL\nSTATEMENTS

Audited Financial\nStatements of the Predecessor Funds as of September 30, 2025 are incorporated by reference herein from the Predecessor Funds’ Form N-CSR filing and the unaudited financial statements of the Predecessor Funds as of March 31, 2026 are incorporated by\nreference herein from the Predecessor Funds’ Form N-CSRS filing. A copy of the Predecessor Funds’ latest Annual and\nSemi-Annual reports may be obtained without charge by contacting Sterling Capital Funds c/o Ultimus Fund Solutions, LLC, P.O. Box\n46707, Cincinnati, OH 45246 or by telephoning toll-free at 1-800-228-1872.

APPENDIX\nA

The nationally recognized statistical\nrating organizations (individually, an “NRSRO”) that may be utilized by the Funds with regard to portfolio investments for\nthe Fund include, but are not limited to, Moody’s Investors Service, Inc. (“Moody’s”), S&P Global Ratings\n(“S&P”), Fitch, Inc. (“Fitch”), DBRS Morningstar (“DBRS”), Japan Credit Rating Agency, Ltd. (“JCR”),\nA.M. Best Company, Inc. (“Best’s”), Rating and Investment Information, Inc. (“R&I”), and Kroll Bond\nRatings Agency (“KBRA”). Set forth below is a description of the relevant ratings of each such NRSRO. The NRSROs that may\nbe utilized by the Fund and the description of each NRSRO’s ratings are as of the date of this SAI, and may subsequently change.

LONG-TERM DEBT RATINGS (may be assigned, for example,\nto corporate and municipal bonds)

Description of the six highest long-term obligation\nratings by Moody’s (Moody’s appends numerical modifiers (1, 2, and 3) to each generic rating classification, with the exception\nof “Aaa.” The modifier “1” indicates that the obligation ranks in the higher end of its generic rating category;\nthe modifier “2” indicates a mid-range ranking; and the modifier “3” indicates a ranking in the lower end of that\ngeneric rating category. Additionally, a “(hyb)” indicator is appended to all ratings of hybrid securities issued by banks,\ninsurers, finance companies, and securities firms.):

\n \n \n \n

Aaa

Obligations\n rated “Aaa”\n are judged\n to be\n of the\n highest quality,\n subject to\n the lowest\n level of\n credit risk.

\n \n \n \n

Obligations rated “Aa”\n are judged to be of high quality and are subject to very low credit risk.

\n \n \n \n

\n A	\n Obligations\n rated “A”\n are judged\n to be\n upper-medium grade\n and are\n subject to\n low credit\n risk.

\n \n \n \n

Baa

Obligations\n rated “Baa”\n are judged\n to be\n medium-grade and\n subject to\n moderate credit\n risk and\n as such\n may possess certain\n speculative characteristics.

\n \n \n \n

Obligations rated “Ba”\n are judged to be speculative and are subject to substantial credit risk.

\n \n \n \n

\n B	\n Obligations\n rated “B”\n are considered\n speculative and\n are subject\n to high\n credit risk.

Description of the six highest long-term issue credit\nratings by S&P (The ratings, with the exception of “AAA,” may be modified by the addition of a plus (+) or minus (-) sign\nto show relative standing within the rating categories):

\n \n \n \n

AAA

An\n obligation rated\n “AAA” has\n the highest rating\n assigned by\n S&P Global\n Ratings. The obligor’s\n capacity to\n meet its\n financial commitments on\n the obligation is extremely strong.

\n \n \n \n

An\n obligation rated\n “AA” differs\n from the\n highest-rated obligations only\n to a\n small degree.\n The obligor’s\n capacity to\n meet its\n financial commitments on\n the obligation is very strong.

\n \n \n \n

\n A	\n An\n obligation rated\n “A” is\n somewhat more susceptible\n to the\n adverse effects\n of changes\n in circumstances and\n economic conditions\n than obligations in\n higher-rated categories. However, the obligor’s capacity to meet its financial commitments on\n the obligation is still strong.

\n \n \n \n

BBB

An\n obligation rated\n “BBB” exhibits\n adequate protection\n parameters. However,\n adverse economic\n conditions or\n changing circumstances\n are more\n likely to\n weaken the obligor’s capacity to meet its financial commitments on the obligation.

\n \n \n \n

BB;

B;\n CCC; CC;\n and C\n Obligations rated ‘BB’,\n ‘B’, ‘CCC’,\n ‘CC’, and\n ‘C’ are regarded\n as having\n significant speculative characteristics.\n ‘BB’ indicates the\n least degree of speculation and\n ‘C’ the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed\n by large uncertainties or major exposure to adverse conditions.

\n \n \n \n

An\n obligation rated\n “BB” is\n less vulnerable\n to nonpayment\n than other\n speculative issues.\n However, it\n faces major\n ongoing uncertainties\n or exposure\n to adverse\n business, financial, or economic conditions that could lead to the obligor’s inadequate capacity\n to meet its financial commitments on the obligation.

Description of the six highest international long-term\ncredit ratings by Fitch (The modifiers “+” or “-” may be appended to a rating to denote relative status within\nmajor rating categories. Such suffixes are not added to the “AAA” Long-Term IDR category):

A-1

\n \n \n \n

AAA

Highest\n credit quality.\n “AAA” ratings\n denote the\n lowest expectation of\n default risk.\n They are\n assigned only\n in cases of\n exceptionally strong\n capacity for payment of financial\n commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.

\n\n

AA	Very high credit quality. “AA”\nratings denote expectations of very low default risk. They indicate very strong capacity for payment of financial commitments. This capacity\nis not significantly vulnerable to foreseeable events.

\n \n \n \n

High\n credit quality.\n “A” ratings\n denote expectations\n of low\n default risk.\n The capacity\n for payment\n of financial\n commitments is\n considered strong.\n This capacity may, nevertheless,\n be more vulnerable to adverse business or economic conditions than is the case for higher ratings.

\n \n \n \n

BBB

Good\n credit quality.\n “BBB” ratings\n indicate that\n expectations of\n default risk\n are currently\n low. The\n capacity for\n payment of\n financial commitments\n is considered adequate, but adverse\n business or economic conditions are more likely to impair this capacity.

\n \n \n \n

Speculative.\n “BB” ratings\n indicate an elevated\n vulnerability to default\n risk, particularly\n in the\n event of\n adverse changes\n in business\n or economic conditions\n over time; however, flexibility exists that supports the servicing of financial commitments.

\n \n \n \n

Highly\n speculative. “B”\n ratings indicate that\n material default risk\n is present,\n but a\n limited margin of\n safety remains.\n Financial commitments are\n currently being met; however, capacity\n for continued payment is vulnerable to deterioration in the business and economic environment.

Description of the six highest long-term obligations\nrating categories by DBRS (All rating categories other than “AAA” also contain subcategories “(high)” and “(low).”\nThe absence of either a “(high)” or “(low)” designation indicates the rating is in the middle of the category):

\n \n \n \n

AAA

Highest credit quality.\n The capacity for the payment of financial obligations is exceptionally high and unlikely to be adversely affected by future events.\n

\n \n \n \n

Superior\n credit quality.\n The capacity\n for the\n payment of\n financial obligations\n is considered\n high. Credit\n quality differs\n from “AAA”\n only to\n a small\n degree. Unlikely to\n be significantly\n vulnerable to future\n events.

\n \n \n \n

\n A	\n Good\n credit quality.\n The capacity\n for the\n payment of\n financial obligations is\n substantial, but\n of lesser credit\n quality than\n “AA.” May\n be vulnerable to\n future events, but qualifying negative\n factors are considered manageable.

\n \n \n \n

BBB

Adequate\n credit quality.\n The capacity\n for the\n payment of\n financial obligations\n is considered\n acceptable. May\n be vulnerable\n to future\n events.

\n \n \n \n

Speculative,\n non-investment grade\n credit quality.\n The capacity\n for the\n payment of\n financial obligations\n is uncertain.\n Vulnerable to\n future events.\n

\n \n \n \n

\n B	\n Highly speculative credit\n quality. There is a high level of uncertainty as to the capacity to meet financial obligations.

Description of the six highest long-term debt ratings\nby JCR (A plus (+) or minus (-) sign may be affixed to the rating symbols from “AA” to “B” to indicate relative\nstanding within each of those rating scales.):

\n \n \n \n

AAA

The\n highest level\n of certainty\n of an\n obligor to\n honor its\n financial obligations.\n AA A\n very high level of certainty to honor the financial obligations.

\n \n \n \n

\n A	\n A\n high level\n of certainty\n to honor\n the financial\n obligations.

\n \n \n \n

BBB

An\n adequate level\n of certainty to\n honor the\n financial obligations.\n However, this\n certainty is\n more likely to\n diminish in\n the future\n than with\n the higher rating\n categories.

\n \n \n \n

Although\n the level\n of certainty\n to honor the\n financial obligations\n is not\n currently considered\n problematic, this certainty\n may not\n persist in the\n future.

A-2

\n \n \n \n

B\n

A\n low level of certainty to honor\n the financial obligations, giving cause for concern.

Description of the six highest long-term debt ratings\nby Best’s (Certain ratings, including “aa” and “a,” may be enhanced with a plus (+) or minus (-) sign to\nindicate whether credit quality is near the top or bottom of a category. A rating can also be assigned an Under Reviewer modifier (“u”)\nthat generally is event-driven and indicates that the company’s rating opinion is under review and may be subject to near-term change.\nRatings prefixed with an (“i”) denote indicative ratings.):

\n \n \n \n

aaa

Exceptional.\n Assigned to\n entities that\n have, in\n Best’s opinion,\n an exceptional\n ability to\n meet their\n ongoing senior\n financial obligations.\n aa Superior.\n Assigned to entities that have,\n in Best’s opinion, a superior ability to meet their ongoing senior financial obligations.

\n \n \n \n

\n a	\n Excellent.\n Assigned to\n entities that have,\n in Best’s\n opinion, an\n excellent ability to\n meet their\n ongoing senior\n financial obligations.

\n \n \n \n

bbb

Good.\n Assigned to\n entities that\n have, in Best’s\n opinion, a\n good ability\n to meet\n their ongoing senior\n financial obligations.

\n \n \n \n

Fair.\n Assigned to\n entities that\n have, in\n Best’s opinion,\n a fair\n ability to\n meet their\n ongoing senior\n financial obligations.\n Credit quality\n is vulnerable\n to adverse\n changes in industry and economic conditions.

\n \n \n \n

\n b	\n Marginal.\n Assigned to\n entities that\n have, in\n Best’s opinion,\n a marginal\n ability to\n meet their\n ongoing senior\n financial obligations.\n Credit quality\n is vulnerable\n to adverse changes in industry and\n economic conditions.

Description of the six highest long-term debt ratings\nby R&I (A plus (+) or minus (-) sign may be appended to the categories, except for “AAA,” indicate relative standing within\neach rating category.):

\n \n \n \n

AAA

Highest creditworthiness\n supported by many excellent factors.

\n \n \n \n

Very\n high creditworthiness\n supported by\n some excellent\n factors.

\n \n \n \n

\n A	\n High\n creditworthiness supported\n by a\n few excellent\n factors.

\n \n \n \n

BBB

Creditworthiness\n is sufficient,\n though some\n factors require\n attention in\n times of\n major environmental\n changes.

\n \n \n \n

Creditworthiness\n is sufficient\n for the\n time being,\n though some\n factors require\n due attention\n in times\n of environmental\n changes.

\n \n \n \n

\n B	\n Creditworthiness is questionable\n and some factors require constant attention.

SHORT-TERM DEBT RATINGS (may be assigned, for example,\nto commercial paper, master demand notes, bank instruments, and letters of credit) Moody’s description of its short-term debt ratings:

\n \n \n \n

P-1:

Ratings\n of Prime-1\n reflect a\n superior ability\n to repay\n short-term debt\n obligations.

\n \n \n \n

P-2:

Ratings\n of rated\n Prime-2 reflect\n a strong\n ability to\n repay short-term\n debt obligations. P-3:\n Ratings of\n Prime-3 reflect an\n acceptable ability\n to repay short-term\n obligations.

\n \n \n \n

NP:

Issuers\n (or supporting\n institutions) rated\n Not Prime do\n not fall\n within any\n of the\n Prime rating categories.\n S&P’s description\n of its\n short-term issue\n credit ratings:

\n \n \n \n

A-1

A short-term obligation\n rated “A-1” is rated in the highest category by S&P Global Ratings. The obligor’s capacity to meet its financial\n commitments on the obligation is\n strong. Within\n this category,\n certain obligations\n are designated\n with a\n plus sign\n (+). This\n indicates that\n the obligor’s\n capacity to\n meet its\n financial commitments on these obligations\n is extremely strong.

\n \n \n \n

A-2

A\n short-term obligation\n rated “A-2”\n is somewhat more\n susceptible to\n the adverse\n effects of\n changes in\n circumstances and economic\n conditions than\n obligations in higher rating categories. However, the obligor’s capacity to meet its financial\n commitments on the obligation is satisfactory.

A-3

\n \n \n \n

A-3

A\n short-term obligation\n rated “A-3”\n exhibits adequate\n protection parameters.\n However, adverse\n economic conditions\n or changing\n circumstances are\n more likely to weaken an obligor’s\n capacity to meet its financial commitments on the obligation.

\n \n \n \n

A short-term obligation\n rated “B” is regarded as vulnerable and has significant speculative characteristics. The obligor currently has the capacity\n to meet its financial commitments;\n however, it\n faces major\n ongoing uncertainties\n that could\n lead to\n the obligor’s\n inadequate capacity\n to meet\n its financial\n commitments.

\n \n \n \n

\n C	\n A\n short-term obligation\n rated “C”\n is currently\n vulnerable to\n nonpayment and\n is dependent\n upon favorable\n business, financial, and\n economic conditions\n for the\n obligor to meet its financial commitments on the obligation.

\n \n \n \n

A short-term obligation\n rated “D” is in default or in breach of an imputed promise. For non-hybrid capital instruments, the “D” rating\n category is used when payments on\n an obligation\n are not\n made on the\n date due,\n unless S&P\n Global Ratings believes\n that such\n payments will be\n made within\n any stated\n grace period.\n However, any stated grace period longer than five business days will be treated as five business days.\n The “D” rating also will be used upon the filing of a bankruptcy\n petition or the taking of a similar action and where default on an obligation is a virtual certainty, for example due to automatic stay\n provisions. A rating on an obligation is lowered to “D”\n if it is subject to a distressed debt restructuring.

Description of the six highest international short-term\ncredit ratings by Fitch:

\n \n \n \n

Highest\n short-term credit\n quality. Indicates\n the strongest\n intrinsic capacity\n for timely\n payment of\n financial commitments;\n may have\n an added\n “+” to\n denote any exceptionally strong\n credit feature.

\n \n \n \n

Good\n short-term credit\n quality. Good\n intrinsic capacity\n for timely\n payment of\n financial commitments.

\n \n \n \n

Fair\n short-term credit\n quality. The\n intrinsic capacity\n for timely\n payment of\n financial commitments\n is adequate.

\n \n \n \n

\n B	\n Speculative\n short-term credit\n quality. Minimal\n capacity for\n timely payment\n of financial\n commitments, plus\n heightened vulnerability\n to near\n term adverse\n changes in financial and economic conditions.

\n \n \n \n

\n C	\n High\n short-term default\n risk. Default\n is a\n real possibility.

RD: Restricted default. Indicates an entity that\nhas defaulted on one or more of its financial commitments, although it continues to meet other financial obligations. Typically applicable\nto entity ratings only.

DBRS’ description of its six highest short-term\ndebt ratings:

\n \n \n \n

R-1

(high)\n Highest credit\n quality. The\n capacity for\n the payment\n of short-term financial\n obligations as\n they fall due\n is exceptionally\n high. Unlikely to\n be adversely\n affected by future events.

\n \n \n \n

R-1

(middle)\n Superior credit\n quality. The\n capacity for\n the payment\n of short-term financial\n obligations as\n they fall due\n is very\n high. Differs\n from R-1\n (high) by\n a relatively modest degree. Unlikely\n to be significantly vulnerable to future events.

\n \n \n \n

R-1

(low)\n Good credit\n quality. The\n capacity for\n the payment\n of short-term financial\n obligations as\n they fall due\n is substantial.\n Overall strength is\n not as\n favourable as higher rating categories.\n May be vulnerable to future events, but qualifying negative factors are considered manageable.

\n \n \n \n

R-2

(high)\n Upper end\n of adequate\n credit quality.\n The capacity\n for the\n payment of\n short-term financial obligations\n as they\n fall due is\n acceptable. May\n be vulnerable\n to future events.

\n \n \n \n

R-2

(middle)\n Adequate credit\n quality. The\n capacity for\n the payment\n of short-term financial\n obligations as\n they fall due\n is acceptable.\n May be\n vulnerable to future\n events or may be exposed to other factors that could reduce credit quality.

\n \n \n \n

R-2

(low)\n Lower end\n of adequate\n credit quality.\n The capacity\n for the\n payment of\n short-term financial obligations\n as they\n fall due is\n acceptable. May\n be vulnerable\n to future events. A number of challenges are present that could affect the issuer’s ability to\n meet such obligations.

A-4

JCR’s description of its short-term debt ratings:

\n \n \n \n

J-1

The\n highest level\n of certainty\n of an\n obligor to\n honor its\n short-term financial\n obligations. Within\n this rating\n category, obligations\n for which\n the certainty\n is particularly high are indicated\n by the symbol J-1+.

\n \n \n \n

J-2

A\n high level\n of certainty\n to honor\n the short-term financial\n obligations, but\n slightly less than\n J-1.

\n \n \n \n \n \n \n \n \n \n

\n J-3	\n An adequate level\nof certainty of an obligor to honor its short-term financial obligations, but susceptible to adverse changes in circumstances.

NJ	The certainty of an obligor to honor its short-term financial obligations is less than in the upper-ranking\n categories.

\n \n \n \n \n \n \n

\n LD	\n JCR\n judges that\n while an\n obligor does not\n honor part\n of the\n agreed to\n financial obligations,\n but it\n honors all\n its other agreed\n to financial\n obligations. \n \n
D	JCR judges that all the financial\nobligations are, in effect, in default.

Best’s description of its short-term debt ratings\n(A rating can also be assigned an Under Reviewer modifier (“u”) that generally is event-driven and indicates that the company’s\nrating opinion is under review and Best’s rating may be subject to near-term change. Ratings prefixed with an “i” denote\nindicative ratings.):

\n \n \n \n

AMB-1+

Strongest. Assigned to\n entities that have, in Best’s opinion, the strongest ability to repay their short-term financial obligations.\n

\n \n \n \n

AMB-1

Outstanding.\n Assigned to\n entities that\n have, in\n Best’s opinion,\n an outstanding\n ability to\n repay their\n short-term financial\n obligations.

\n \n \n \n

AMB-2

Satisfactory. Assigned\n to entities that have, in Best’s opinion, a satisfactory ability to repay their short-term financial obligations.

\n \n \n \n

AMB-3

Adequate.\n Assigned to\n entities that\n have, in\n Best’s opinion,\n an adequate\n ability to\n repay their\n short-term financial\n obligations; however,\n adverse industry\n or economic conditions likely will\n reduce their capacity to meet their financial commitments.

\n \n \n \n

AMB-4

Questionable.\n Assigned to\n entities that\n have, in\n Best’s opinion,\n questionable credit\n quality and\n are vulnerable\n to adverse\n economic or\n other external\n changes, which could have a marked\n impact on their ability to meet their financial commitments.

\n \n \n \n

Assigned\n to entities\n (excluding insurers) that\n are in\n default or\n when a\n bankruptcy petition or\n similar action\n has been filed\n and made\n public. R&I’s\n description of its short-term debt\n ratings (A plus (+) sign may be appended to the “a-1” category to indicate a particularly high level of the certainty.):

\n \n \n \n

a-1

Certainty\n of the\n fulfillment of\n a short-term\n obligation is\n high.

\n \n \n \n

a-2

Certainty\n of the\n fulfillment of\n a short-term\n obligation is\n high, though\n some factors\n require attention.

\n \n \n \n

a-3

Certainty\n of the\n fulfillment of\n a short-term\n obligation is\n sufficient for\n the time\n being, though\n some factors require\n attention in\n times of major\n environmental changes.

\n \n \n \n

\n b	\n Certainty\n of the\n fulfillment of\n a short-term\n obligation is\n not equal\n to that\n of a\n short-term obligation\n rated in the\n “a” categories\n and some\n factors require\n attention.

\n \n \n \n

\n c	\n The\n lowest rating.\n A short-term\n obligation is\n in default\n or is\n highly likely\n to default.\n

SHORT-TERM LOAN/MUNICIPAL NOTE RATINGS Moody’s\ndescription of its two highest short-term loan and municipal note ratings:

\n \n \n \n

MIG\n 1

This\n designation denotes\n superior credit\n quality. Excellent\n protection is\n afforded by\n established cash\n flows, highly\n reliable liquidity\n support, or\n demonstrated broad-based access\n to the market for refinancing.

A-5

\n \n \n \n

MIG\n 2

This designation\ndenotes strong credit quality. Margins of protection are ample, although not as large as in the preceding group.

\n \n \n \n

VMIG\n 1

This\n designation denotes\n superior credit\n quality. Excellent\n protection is\n afforded by\n the superior\n short-term credit\n strength of\n the liquidity\n provider and\n structural and legal protections that ensure the timely payment of purchase price upon demand.

\n \n \n \n

VMIG\n 2

This\n designation denotes\n strong credit\n quality. Good\n protection is\n afforded by\n the strong\n short-term credit\n strength of\n the liquidity\n provider and\n structural and\n legal protections that ensure the timely payment of purchase price upon demand.

KBRA’s description of its ratings (KBRA may\nappend - or + modifiers to ratings in categories AA through CCC to indicate, respectively, upper and lower risk levels within the broader\ncategory):

\n \n \n \n

AAA

Determined\n to have\n almost no\n risk of\n loss due to\n credit-related events.\n Assigned only to\n the very\n highest quality\n obligors and obligations\n able to\n survive extremely challenging economic\n events.

\n \n \n \n

Determined\n to have\n minimal risk of\n loss due\n to credit-related\n events. Such obligors\n and obligations\n are deemed very\n high quality.

\n \n \n \n

\n A	\n Determined\n to be\n of high\n quality with a\n small risk\n of loss\n due to\n credit-related events. Issuers\n and obligations\n in this\n category are expected\n to weather\n difficult times with low credit\n losses.

\n \n \n \n

BBB

Determined\n to be\n of medium\n quality with some\n risk of\n loss due\n to credit-related events.\n Such issuers\n and obligations\n may experience credit\n losses during\n stressed environments.

\n \n \n \n

Determined\n to be\n of low\n quality with moderate\n risk of\n loss due\n to credit-related events.\n Such issuers\n and obligations\n have fundamental\n weaknesses that\n create moderate credit risk.

\n \n \n \n

\n B	\n Determined\n to be\n of very\n low quality\n with high risk\n of loss\n due to\n credit-related events. These\n issuers and\n obligations contain many\n fundamental shortcomings\n that create significant credit risk.

\n \n \n \n

CCC

Determined\n to be\n at substantial\n risk of\n loss due\n to credit-related\n events, near\n default, or\n in default\n with high\n recovery expectations.

\n \n \n \n

Determined\n to be\n near default\n or in default\n with average\n recovery expectations.

\n \n \n \n

\n C	\n Determined\n to be\n near default\n or in\n default with\n low recovery\n expectations.

\n \n \n \n

\n D	\n KBRA\n defines default\n as occurring\n if:

\n \n \n \n \n

•

There\n is a\n missed interest\n payment, principal\n payment, or\n preferred dividend\n payment, as\n applicable, on\n a rated\n obligation which\n is unlikely\n to be\n recovered.

\n \n \n \n \n

•

The\n rated entity\n files for\n protection from creditors,\n is placed\n into receivership,\n or is\n closed by\n regulators such\n that a\n missed payment is\n likely to\n result.

\n \n \n \n \n

•

The\n rated entity\n seeks and\n completes a\n distressed exchange,\n where existing\n rated obligations\n are replaced\n by new\n obligations with\n a diminished\n economic value.

A-6

APPENDIX B

Sterling Capital Management LLC\n

Proxy Voting Policy

September\n2025

1. Scope

Rule 206(4)-6 under the Investment Advisers Act of\n1940 (the Proxy Voting Rule) requires registered investment advisers with voting authority over client securities to adopt written proxy\nvoting policies and procedures designed to vote in the clients' best interests, address material conflicts of interest, and disclose how\nclients can obtain information on their proxy votes and a copy of the firm’s policies.

2. Policy

2.1. Proxy\nVoting

Sterling has adopted this Policy and corresponding\nwritten procedures that are designed to ensure that the Firm votes proxies in the best interests of our clients. When Sterling has proxy\nvoting authority for securities held in client accounts, Sterling has an obligation to monitor corporate events and to take appropriate\naction on client proxies that come to its attention.

Sterling establishes proxy voting authority during\nthe account onboarding process through the execution of the Investment Management Agreement (IMA). Sterling’s IMA generally states\nthat decisions on the voting of proxies are made by Sterling regarding discretionary assets, unless the client otherwise reserves the\nright to vote. To comply with the Proxy Voting Rule, Sterling:

•\nAdopted and implemented this Policy and the SCM Proxy Voting Procedures which are reasonably designed to ensure that Sterling votes\nproxies in the best interests of its clients;

•\nEnsures that the written policies and procedures address material conflicts that may arise between the interests of Sterling and\nits clients;

•\nDescribes proxy voting policies and procedures to clients in Sterling’s Form ADV 2A and upon request furnishes a copy of\nthe policies and procedures to the requesting client;

•\nDiscloses to clients how to obtain information from Sterling about how we voted their proxies.

2.1.a. Proxy Committee

Sterling’s Proxy Committee is responsible for\nestablishing policies and procedures designed to enable Sterling to ethically and effectively fulfill its fiduciary obligation to vote\nall applicable proxies on behalf of client accounts. The Proxy Committee is responsible for reviewing and reaffirming the Proxy Voting\nGuidelines. In addition, the Proxy Committee reviews this Policy at least annually and reviews the proxy voting process, including the\nengagement of a service provider, to ensure it is running effectively and in accordance with this Policy.

2.1.b. Engagement of a Service\nProvider

The Proxy Committee has engaged an Industry Service\nProvider (ISP) to: (i) provide research and vote recommendations for proxies issued by the companies held within our client accounts;\n(ii) perform administrative tasks of receiving proxies and proxy statements; (iii) submit votes on behalf of Sterling; (iv) retain proxy\nvoting records and information; and (v) report to Sterling on its activities. The Proxy Committee has adopted the ISP’s Proxy Guidelines\n(the Guidelines); however, Sterling retains final authority and fiduciary responsibility for the voting of proxies. By following the ISP’s\nGuidelines, Sterling seeks to mitigate potential conflicts of interest Sterling may have with respect to the proxies.

2.1.c. Voting Assessment

Sterling’s Portfolio Managers and Analysts\n(collectively, Investment Professionals) consider the recommendations of both the issuer’s management and the ISP, in conjunction\nwith their own research and evaluation, and in the context of their in-depth knowledge and understanding of the underlying company, to\ndetermine a voting decision that is in the best interest of clients.

There are certain circumstances where Sterling may\ngenerally rely on the recommendations from the ISP:

Quantitative, Index and Index-Like\nAccounts

Generally, proxies related to securities held in\naccounts and funds (or a portion thereof) that are managed pursuant to quantitative, index or index-like strategies will be voted in the\nsame manner as those held in actively managed accounts. Sterling refers to this approach as “Majority Voting”. This process\nof Majority Voting ensures that these strategies benefit from the engagement and dialogue of our active

B-1

investors. In the absence of overlap between the\nstrategies, these strategies will vote in line with the ISP guidelines. Portfolio managers and analysts for accounts employing Majority\nVoting retain full discretion to override Majority Voting and to vote the shares as they determine to be in the best interest of those\naccounts, absent certain types of conflicts of interest.

Advisory Solutions Accounts

Generally, proxies related to securities held in\naccounts and funds (or a portion thereof) that are managed in accordance with third-party (e.g.,\nsub-advisors, model providers) recommendations and overseen by Sterling’s Advisory Solutions team will be voted by Majority Voting.\nIn the absence of overlap between the strategies, these strategies will vote in line with the ISP guidelines. Portfolio managers and analysts\nfor accounts employing Majority Voting retain full discretion to override Majority Voting and to vote the shares as they determine to\nbe in the best interest of those accounts, absent certain types of conflicts of interest.

2.1.d. Overriding the ISP Recommendation

If an Investment Professional reviews the ISP’s\nvote recommendation and determines that it is in the best interest of Sterling’s clients who hold the security to reject the vote\nrecommendation setforth by the ISP, the Investment Professional inputs and saves the supporting rationale for voting against the ISP’s\nrecommendation and votes the proxy within the ISP’s web-based application. The vote override will apply to all shares for which\nSterling has the authority to vote, except for any security held in a Sterling strategy that contains a specific investment objective\nfor which the vote override should not apply.

2.1.e. Conflicts of Interest

In certain circumstances Sterling may have a relationship\nwith an issuer that could pose a conflict of interest when voting shares of that issuer on behalf of clients. Examples of material conflicts\ninclude:

• An issuer that contributes 5% or more of the Firm’s overall revenues;

• An issuer that accounts for 5% or more of the Firm’s overall expenses;

• An issuer where a Sterling Teammate serves on the board;

• An issuer that is an affiliate of Sterling (e.g., Guardian Capital Group Limited or Affiliated Funds).

B-2

If Sterling has a material conflict of interest with\nthe issuer, the proxy will be voted according to the ISP’s recommendation and will not be overridden by Sterling.

2.1.f. Instances Where Sterling\nMay Not Vote Proxies

Sterling may be unable to vote or may determine to\nrefrain from voting in certain circumstances. The following highlights some potential instances in which a proxy may not be voted:

2.1.f.1. Proxy Voting When a Client\nNo Longer Owns the Security

When Sterling takes over management of an account,\nthe existing securities in the account may be sold. However, if the client was a shareholder of record on the execution date, Sterling\nmay receive proxies for these securities. In these instances, Sterling will not vote such proxies as the companies are no longer held\nin the client’s account and have no economic value for the client.

2.1.f.2. Quorum Blocking Proxy

Sterling may choose not to vote a proxy if it believes\nit would be the client’s interest to make it difficult for the issuer to obtain a quorum. Sterling feels that the cost of voting\nthese proxies outweighs any possible benefit to the client.

2.1.f.3. Share Blocking Proxy

Voting in certain countries requires “share\nblocking”. Shareholders wishing to vote their proxies must deposit their shares shortly before the date of the meeting with a designated\ndepositary. During this blocking period, shares that will be voted at the meeting cannot be sold until the meeting has taken place and\nthe shares are returned to the client’s custodian banks. Sterling may determine that the value of exercising the vote is outweighed\nby the detriment of not being able to sell the shares during this period. In cases where Sterling wants to retain the ability to trade\nshares, Sterling may abstain from voting those shares.

2.1.f.4. Securities Lending

If a client lends securities, Sterling will vote\nthe securities’ shares as reported by client’s custodian. There may be instances, depending on the portfolio, for which Sterling\ndoes not vote proxies. In addition, clients may direct a vote for a particular solicitation.

2.1.f.5. Other Considerations

In limited circumstances, other market specific impediments\nto voting shares may limit Sterling’s ability to cast votes, including, but not limited to, cost of voting, late delivery of proxy\nmaterials, untimely vote cut-off dates, power of attorney and share re-registration requirements, or any other unusual voting requirements.\nIn these limited instances, Sterling votes securities on a best-efforts basis.

2.1.g. Providing Information Regarding\nSterling’s Proxy Voting Process

At the beginning of a new client relationship, the\nclient is provided with a copy of Sterling’s Form ADV 2A which includes a summary of Sterling’s proxy voting process. The\nsummary indicates that a copy of this Policy is available upon request and includes instructions for requesting a copy of this Policy\nor information regarding how a client's proxies were voted.

2.1.h. Annual Report of Proxy\nVoting Records

All mutual funds, Exchange Traded Funds (ETFs), and\nother registered companies (collectively, “Funds”) and Institutional Investment Managers are required to file a Form N-PX\nwith the SEC containing the proxy voting record for the most recent 12-month period ending June 30th. Form N- PX must be filed no later\nthan August 31st of each year.

2.3.g.i. Fund Reporting

Every Fund is required to file its proxy voting record\nand report information for each matter relating to a portfolio security considered at any shareholder meeting held during the reporting\nperiod and with respect to which the Fund was entitled to vote.

Sterling obtains the proxy voting record for all\nvotes cast on behalf of the Funds managed by Sterling during the applicable reporting period from the ISP and provides the Form N-PX to\nthe applicable Fund Administrator. The Fund Administrator is responsible for filing the Form NPX with the SEC via the Edgar system. Sterling\nposts the voting records, or a direct link to the Form N-PX on Edgar, on the Funds’ website. In addition, shareholders may request\na copy of the Funds’ Form N-PX by contacting the number listed in the Funds’ Statement of Additional Information (SAI).

2.3.g.ii. Institutional Investment\nManager Reporting

Each person who is an Institutional Investment Manager\nis required to file its proxy voting record related to executive compensation (or “say-on-pay”) matters for a portfolio security\nheld during the reporting period and with respect to which the Institutional Investment Manager exercised voting power.

Sterling obtains the proxy voting record for all\nsay-on-pay matters for portfolio securities managed by Sterling during the applicable reporting period from the ISP and files, or has\na filing agent file, the Form N-PX with the SEC via the Edgar system. In addition, Sterling will provide a client with their voting record\nupon request.

B-3

PART\nC. OTHER INFORMATION

Item\n28. Exhibits

\n (a)	\n (1)	\n Amended\n and Restated Agreement and Declaration of Trust dated August 27, 2025 is incorporated by reference to Exhibit (a)(1) to Post-Effective\n Amendment No. 159 to the Registration Statement of the Registrant on Form N-1A (filed September 24, 2025).
\n	\n	\n	\n
\n (b)	\n (1)	\n Amended\n and Restated Bylaws dated November 19, 2015 is incorporated by reference to Exhibit (b)(1) to Post-Effective Amendment No. 116 to the\n Registration Statement of the Registrant on Form N-1A (filed November 30, 2015).
\n	\n	\n	\n
\n (c)	\n (1)	\n Article\n III; Article V; Article VIII, Section 4; and Article IX, Sections 1, 4, 5, and 7 of the Amended and Restated Agreement and Declaration\n of Trust are incorporated by reference to Exhibit (a)(1) to Post-Effective Amendment No. 159 to the Registration Statement of the Registrant\n on Form N-1A (filed September 24, 2025).
\n	\n	\n	\n
\n	\n (2)	\n Article\n 9; Article 10, Section 10.6; and Article 11 of the By-laws responsive to this item are incorporated by reference to Exhibit (b)(1) to\n Post-Effective Amendment No. 116 to the Registration Statement of the Registrant on Form N-1A (filed November 30, 2015).
\n	\n	\n	\n
\n (d)	\n (1)	\n Investment\n Advisory Agreement between the Registrant and Sterling Capital Management LLC dated March 23, 2026, is incorporated by reference to Exhibit\n (d)(1) to Post-Effective Amendment No. 171 to the Registration Statement of the Registrant on Form N-1A (filed August 5, 2026).
\n	\n	\n	\n
\n	\n (2)	\n ETF\n Investment Advisory Agreement between the Registrant, on behalf of Sterling Capital National Municipal Bond ETF, Sterling Capital Multi-Strategy\n Income ETF, Sterling Capital Hedged Equity Premium Income ETF, and Sterling Capital Enhanced Core Bond ETF, and Sterling Capital Management\n LLC dated March 23, 2026, is incorporated by reference to Exhibit (d)(2) to Post-Effective Amendment No. 171 to the Registration Statement\n of the Registrant on Form N-1A (filed August 5, 2026).
\n	\n	\n	\n
\n	\n	\n (i)	\n Amendment of Schedule A to ETF Investment Advisory Agreement between the Registrant, on behalf of Sterling Capital Small Cap Value ETF, Sterling Capital Hedged BDC Income ETF, Sterling Capital Macro-Led International Equity ETF, and Sterling Capital AI Leaders ETF, and Sterling Capital Management LLC dated October 6, 2026, is filed herewith.
\n	\n	\n	\n
\n	\n (3)	\n ETF\n Investment Advisory Agreement between the Registrant, on behalf of Sterling Capital Ultra Short Bond ETF and Sterling Capital Short Duration\n Bond ETF, and Sterling Capital Management LLC, dated March 23, 2026, is incorporated by reference to Exhibit (d)(3) to Post-Effective\n Amendment No. 172 to the Registration Statement of the Registrant on Form N-1A (filed August 28, 2026).
\n	\n	\n	\n
\n	\n	\n (i)	\n Amendment of Schedule A to ETF Investment Advisory Agreement between the Registrant, on behalf of Sterling Capital Large Cap Value Focused Factor ETF, Sterling Capital Small Cap Value Focused Factor ETF, Sterling Capital North Carolina Intermediate Tax-Free ETF, and Sterling Capital Virginia Intermediate Tax-Free ETF, and Sterling Capital Management LLC dated October 6, 2026, is filed herewith.

\n	\n	\n	\n
\n (e)	\n (1)	\n Distribution\n Agreement among the Registrant, Sterling Capital Management LLC and Sterling Capital Distributors, LLC dated February 1, 2016 is incorporated\n by reference to Exhibit (e)(1) to Post-Effective Amendment No. 119 to the Registration Statement of the Registrant on Form N-1A (filed\n April 28, 2016).
\n	\n	\n	\n
\n	\n	\n (i)	\n Amendment\n to Distribution Agreement dated September 1, 2016 is incorporated by reference to Exhibit (e)(1)(i) to Post-Effective Amendment No. 123\n to the Registration Statement of the Registrant on Form N-1A (filed September 29, 2016).
\n	\n	\n	\n
\n	\n	\n (ii)	\n Amendment\n to Distribution Agreement dated March 1, 2017 is incorporated by reference to Exhibit (e)(1)(ii) to Post-Effective Amendment No. 131 to\n the Registration Statement of the Registrant on Form N-1A (filed April 4, 2017).
\n	\n	\n	\n
\n	\n (2)	\n Distribution\n Agreement among the Registrant, Sterling Capital Management LLC and Sterling Capital Distributors, LLC dated May 31, 2017 is incorporated\n by reference to Exhibit (e)(2) to Post-Effective Amendment No. 135 to the Registration Statement of the Registrant on Form N-1A (filed\n November 28, 2017).
\n	\n	\n	\n
\n	\n	\n (i)	\n Amendment\n to Distribution Agreement dated August 24, 2017 is incorporated by reference to Exhibit (e)(2)(i) to Post-Effective Amendment No. 135\n to the Registration Statement of the Registrant on Form N-1A (filed November 28, 2017).
\n	\n	\n	\n
\n	\n	\n (ii)	\n Second\n Amendment to Distribution Agreement dated May 18, 2018 is incorporated by reference to Exhibit (e)(2)(ii) to Post-Effective Amendment\n No. 140 to the Registration Statement of the Registrant on Form N-1A (filed November 29, 2018).
\n	\n	\n	\n
\n	\n	\n (iii)	\n Third\n Amendment to Distribution Agreement dated February 1, 2021 is incorporated by reference to Exhibit (e)(2)(iii) to Post-Effective Amendment\n No. 148 to the Registration Statement of the Registrant on Form N-1A (filed November 23, 2021).
\n	\n	\n	\n
\n	\n (3)	\n Distribution\n Agreement among the Registrant, Sterling Capital Management LLC and Sterling Capital Distributors, LLC dated September 30, 2021 is incorporated\n by reference to Exhibit (e)(3) to Post-Effective Amendment No. 148 to the Registration Statement of the Registrant on Form N-1A (filed\n November 23, 2021).
\n	\n	\n	\n
\n	\n	\n (i)	\n Amendment\n to Distribution Agreement dated November 21, 2025, is incorporated by reference to Exhibit 7(c)(i) to the Registration Statement of the\n Registrant on Form N-14 (filed January 15, 2026).
\n	\n	\n	\n
\n	\n (4)	\n Distribution\n Services Agreement among the Registrant, Sterling Capital Management LLC and Sterling Capital Distributors, LLC dated February 1, 2016\n is incorporated by reference to Exhibit (e)(2) to Post-Effective Amendment No. 119 to the Registration Statement of the Registrant on\n Form N-1A (filed April 28, 2016).

\n	\n (5)	\n ETF\n Distribution Agreement among the Registrant, on behalf of Sterling Capital Ultra Short Bond ETF, Sterling Capital Short Duration Bond\n ETF, Sterling Capital National Municipal Bond ETF, Sterling Capital Multi-Strategy Income ETF, Sterling Capital Hedged Equity Premium\n Income ETF, and Sterling Capital Enhanced Core Bond ETF, and Sterling Capital Management LLC and Sterling Capital Distributors LLC, dated\n November 21, 2025, is incorporated by reference to Exhibit (e)(5) to Post-Effective Amendment No. 162 to the Registration Statement of\n the Registrant on Form N-1A (filed December 8, 2025).
\n	\n	\n	\n
\n	\n	\n (i)	\n First Amendment to ETF Distribution Agreement among the Registrant, on behalf of Sterling Capital Large Cap Value Focused Factor ETF, Sterling Capital Small Cap Value Focused Factor ETF, Sterling Capital Small Cap Value ETF, Sterling Capital North Carolina Intermediate Tax-Free ETF, Sterling Capital Virginia Intermediate Tax-Free ETF, Sterling Capital Hedged BDC Income ETF, Sterling Capital Macro-Led International Equity ETF, and Sterling Capital AI Leaders ETF, and Sterling Capital Management LLC and Sterling Capital Distributors, LLC dated October 6, 2026, is filed herewith.
\n	\n	\n	\n
\n	\n (6)	\n ETF\n Distribution Services Agreement among the Registrant, on behalf of Sterling Capital Ultra Short Bond ETF, Sterling Capital Short Duration\n Bond ETF, Sterling Capital National Municipal Bond ETF, Sterling Capital Multi-Strategy Income ETF, Sterling Capital Hedged Equity Premium\n Income ETF, and Sterling Capital Enhanced Core Bond ETF, and Sterling Capital Management LLC and Sterling Capital Distributors LLC, dated\n December 8, 2025, is incorporated by reference to Exhibit (e)(6) to Post-Effective Amendment No. 162 to the Registration Statement of\n the Registrant on Form N-1A (filed December 8, 2025).
\n	\n	\n	\n
\n (f)	\n	\n Not\n applicable.
\n	\n	\n	\n
\n (g)	\n (1)	\n Custody\n Agreement between the Registrant and U.S. Bank N.A. dated August 31, 2006 is incorporated by reference to Exhibit (g)(6) to Post-Effective\n Amendment No. 50 to the Registration Statement on Form N-1A (filed December 18, 2006).
\n	\n	\n	\n
\n	\n	\n (i)	\n Revised\n Exhibit C to Custody Agreement is incorporated by reference to Exhibit (g)(2)(i) to Post-Effective Amendment No. 52 to the Registration\n Statement on Form N-1A (filed January 31, 2007).
\n	\n	\n	\n
\n	\n	\n (ii)	\n Amendment\n to the Custody Agreement dated December 2, 2008 is incorporated by reference to Exhibit (g)(2)(ii) to Post-Effective Amendment No. 61\n to the Registration Statement on Form N-1A (filed January 28, 2009).
\n	\n	\n	\n
\n	\n	\n (iii)	\n Amendment\n to the Custody Agreement dated February 1, 2010 is incorporated by reference to Exhibit (g)(2)(iii) to Post-Effective Amendment No. 66\n to the Registration Statement of the Registrant on Form N-1A (filed April 29, 2010).
\n	\n	\n	\n
\n	\n	\n (iv)	\n Amendment\n to the Custody Agreement dated May 1, 2010, including Schedule D, is incorporated by reference to Exhibit (g)(2)(iv) to Post-Effective\n Amendment No. 67 to the Registration Statement of the Registrant on Form N-1A (filed November 29, 2010).
\n	\n	\n	\n
\n	\n	\n (v)	\n Amendment\n to the Custody Agreement dated October 1, 2010 is incorporated by reference to Exhibit (g)(2)(v) to Post-Effective Amendment No. 68 to\n the Registration Statement of the Registrant on Form N-1A (filed January 28, 2011).

\n	\n	\n (vi)	\n Amendment\n to the Custody Agreement dated February 1, 2011 is incorporated by reference to Exhibit (g)(2)(vi) to Post-Effective Amendment No. 74\n to the Registration Statement of the Registrant on Form N-1A (filed June 29, 2011).
\n	\n	\n	\n
\n	\n	\n (vii)	\n Amendment\n to the Custody Agreement dated June 14, 2011 is incorporated by reference to Exhibit (g)(2)(vii) to Post-Effective Amendment No. 74 to\n the Registration Statement of the Registrant on Form N-1A (filed June 29, 2011).
\n	\n	\n	\n
\n	\n	\n (viii)	\n Amendment\n to the Custody Agreement dated November 20, 2012 is incorporated by reference to Exhibit (g)(2)(viii) to Post-Effective Amendment No.\n 88 to the Registration Statement of the Registrant on Form N-1A (filed November 19, 2012).
\n	\n	\n	\n
\n	\n	\n (ix)	\n Amendment\n to the Custody Agreement dated December 12, 2013 is incorporated by reference to Exhibit (g)(1)(ix) to Post-Effective Amendment No. 102\n to the Registration Statement of the Registrant on Form N-1A (filed January 29, 2014).
\n	\n	\n	\n
\n	\n	\n (x)	\n Amendment\n to the Custody Agreement dated November 21, 2014 is incorporated by reference to Exhibit (g)(1)(x) to Post-Effective Amendment No. 108\n to the Registration Statement of the Registrant on Form N-1A (filed January 29, 2015).
\n	\n	\n	\n
\n	\n	\n (xi)	\n Amendment\n to the Custody Agreement dated August 20, 2015 is incorporated by reference to Exhibit (g)(1)(xi) to Post-Effective Amendment No. 116\n to the Registration Statement of the Registrant on Form N-1A (filed November 30, 2015).
\n	\n	\n	\n
\n	\n	\n (xii)	\n Amendment\n to Custody Agreement dated September 7, 2016 is incorporated by reference to Exhibit (g)(1)(xii) to Post-Effective Amendment No. 123 to\n the Registration Statement of the Registrant on Form N-1A (filed September 29, 2016).
\n	\n	\n	\n
\n	\n	\n (xiii)	\n Amendment\n to Custody Agreement dated October 9, 2018 is incorporated by reference to Exhibit (g)(1)(xiii) to Post-Effective Amendment No. 140 to\n the Registration Statement of the Registrant on Form N-1A (filed November 29, 2018).
\n	\n	\n	\n
\n	\n	\n (ix)	\n Form\n of Amendment to Custody Agreement is incorporated by reference to Exhibit 9(a)(xiv) to the Registration Statement of the Registrant on\n Form N-14 (filed January 15, 2026).
\n	\n	\n	\n
\n	\n (2)	\n ETF\n Custody Agreement between Registrant, on behalf of Sterling Capital National Municipal Bond ETF, Sterling Capital Multi-Strategy Income\n ETF, and Sterling Capital Hedged Equity Premium Income ETF, and U.S. Bank N.A. dated December 8, 2025, is incorporated by reference to\n Exhibit (g)(2) to Post-Effective Amendment No. 163 to the Registration Statement of the Registrant on Form N-1A (filed December 16, 2025).
\n	\n	\n	\n
\n	\n	\n (i)	\n Form of Amendment to ETF Custody Agreement is incorporated by reference to Exhibit 9(a)(i) to the Registration Statement of the Registrant on Form N-14 (filed January 15, 2026).

\n	\n	\n (ii)	\n Amendment to ETF Custody Agreement between Registrant, on behalf of Sterling Capital Large Cap Value Focused Factor ETF, Sterling Capital Small Cap Value Focused Factor ETF, Sterling Capital Small Cap Value ETF, Sterling Capital North Carolina Intermediate Tax-Free ETF, Sterling Capital Virginia Intermediate Tax-Free ETF, Sterling Capital Hedged BDC Income ETF, Sterling Capital Macro-Led International Equity ETF, and Sterling Capital AI Leaders ETF, and U.S. Bank N.A. dated October 6, 2026, is filed herewith.
\n	\n	\n	\n
\n (h)	\n (1)	\n Administration\n Agreement between the Registrant and Sterling Capital Management LLC dated October 1, 2010 is incorporated by reference to Exhibit (h)(1)\n to Post-Effective Amendment No. 67 to the Registration Statement of the Registrant on Form N-1A (filed November 29, 2010).
\n	\n	\n	\n
\n	\n	\n (i)	\n Amendment\n to Administration Agreement dated June 29, 2011 is incorporated by reference to Exhibit (h)(1)(i) to Post-Effective Amendment No. 74 to\n the Registration Statement of the Registrant on Form N-1A (filed June 29, 2011).
\n	\n	\n	\n
\n	\n	\n (ii)	\n Amendment\n to Administration Agreement dated November 18, 2011 is incorporated by reference to Exhibit (h)(1)(ii) to Post-Effective Amendment No.\n 78 to the Registration Statement of the Registrant on Form N-1A (filed January 17, 2012).
\n	\n	\n	\n
\n	\n	\n (iii)	\n Amendment\n to Administration Agreement dated July 1, 2012 is incorporated by reference to Exhibit (h)(1)(iii) to Post-Effective Amendment No. 87\n to the Registration Statement of the Registrant on Form N-1A (filed September 7, 2012).
\n	\n	\n	\n
\n	\n	\n (iv)	\n Amendment\n to Administration Agreement dated November 20, 2012 is incorporated by reference to Exhibit (h)(1)(iv) to Post-Effective Amendment No.\n 88 to the Registration Statement of the Registrant on Form N-1A (filed November 19, 2012).
\n	\n	\n	\n
\n	\n	\n (v)	\n Amendment\n to Administration Agreement dated November 15, 2012 is incorporated by reference to Exhibit (h)(1)(v) to Post-Effective Amendment No.\n 91 to the Registration Statement of the Registrant on Form N-1A (filed January 30, 2013).
\n	\n	\n	\n
\n	\n	\n (vi)	\n Amendment\n to Administration Agreement dated December 12, 2013 is incorporated by reference to Exhibit (h)(1)(vi) to Post-Effective Amendment No.\n 102 to the Registration Statement of the Registrant on Form N-1A (filed January 29, 2014).
\n	\n	\n	\n
\n	\n	\n (vii)	\n Amendment\n to Administration Agreement dated November 28, 2014 is incorporated by reference to Exhibit (h)(1)(vii) to Post-Effective Amendment No.\n 108 to the Registration Statement of the Registrant on Form N-1A (filed January 29, 2015).
\n	\n	\n	\n
\n	\n	\n (viii)	\n Amendment\n to Administration Agreement dated August 20, 2015 is incorporated by reference to Exhibit (h)(1)(viii) to Post-Effective Amendment No.\n 116 to the Registration Statement of the Registrant on Form N-1A (filed November 30, 2015).
\n	\n	\n	\n
\n	\n	\n (ix)	\n Amendment\n to Administration Agreement dated November 19, 2015 is incorporated by reference to Exhibit (h)(1)(ix) to Post-Effective Amendment No.\n 116 to the Registration Statement of the Registrant on Form N-1A (filed November 30, 2015).

\n	\n	\n (x)	\n Amendment\n to Administration Agreement dated August 25, 2016 is incorporated by reference to Exhibit (h)(1)(x) to Post-Effective Amendment No. 123\n to the Registration Statement of the Registrant on Form N-1A (filed September 29, 2016).
\n	\n	\n	\n
\n	\n	\n (xi)	\n Amendment\n to Administration Agreement dated February 28, 2018 is incorporated by reference to Exhibit (h)(1)(xi) to Post-Effective Amendment No.\n 140 to the Registration Statement of the Registrant on Form N-1A (filed November 29, 2018).
\n	\n	\n	\n
\n	\n	\n (xii)	\n Amendment\n to Administration Agreement dated November 19, 2025, is incorporated by reference to Exhibit (h)(1)(xii) to Post-Effective Amendment No.\n 162 to the Registration Statement of the Registrant on Form N-1A (filed December 8, 2025).
\n	\n	\n	\n
\n	\n	\n (xiii)	\n Amendment\n to Administration Agreement dated October 6, 2026, is filed herewith.
\n	\n	\n	\n
\n	\n (2)	\n ETF\n Unitary Fee Administrative Services Agreement between Registrant, on behalf of Sterling Capital Ultra Short Bond ETF and Sterling Capital\n Short Duration Bond ETF, and Sterling Capital Management LLC, dated December 8, 2025, is incorporated by reference to Exhibit (h)(2) to\n Post-Effective Amendment No. 162 to the Registration Statement of the Registrant on Form N-1A (filed December 8, 2025).
\n	\n	\n	\n
\n	\n	\n (i)	\n Amendment to ETF Unitary Fee Administrative Services Agreement between Registrant, on behalf of Sterling Capital Large Cap Value Focused Factor ETF, Sterling Capital Small Cap Value Focused Factor ETF, Sterling Capital North Carolina Intermediate Tax-Free ETF, and Sterling Capital Virginia Intermediate Tax-Free ETF, and Sterling Capital Management LLC, dated October 6, 2026, is filed herewith.
\n	\n	\n	\n
\n	\n (3)	\n Sub-Administration\n Agreement between Sterling Capital Management LLC and Ultimus Fund Solutions, LLC dated August 26, 2024, is incorporated by reference\n to Exhibit (h)(3) to Post-Effective Amendment No. 163 to the Registration Statement of the Registrant on Form N-1A (filed December 16,\n 2025).
\n	\n	\n	\n
\n	\n	\n (i)	\n Amendment\n to Sub-Administration Agreement dated November 19, 2025 is incorporated by reference to Exhibit 13(b)(i) to the Registration Statement\n of the Registrant on Form N-14 (filed January 15, 2026).
\n	\n	\n	\n
\n	\n (4)	\n ETF\n Sub-Administration Agreement between Sterling Capital Management LLC and Ultimus Fund Solutions, LLC, on behalf of Sterling Capital Ultra\n Short Bond ETF, Sterling Capital Short Duration Bond ETF, Sterling Capital National Municipal Bond ETF, Sterling Capital Multi-Strategy\n Income ETF, Sterling Capital Hedged Equity Premium Income ETF, and Sterling Capital Enhanced Core Bond ETF, dated December 8, 2025, is\n incorporated by reference to Exhibit (h)(4) to Post-Effective Amendment No. 162 to the Registration Statement of the Registrant on Form\n N-1A (filed December 8, 2025).

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

\n	\n	\n (i)	\n Amendment\n to Schedule A to the ETF Sub-Administration Agreement between Sterling Capital Management LLC and Ultimus Fund Solutions, LLC, on behalf\n of Sterling Capital Large Cap Value Focused Factor ETF, Sterling Capital Small Cap Value Focused Factor ETF, Sterling Capital Small Cap\n Value ETF, Sterling Capital North Carolina Intermediate Tax-Free ETF, and Sterling Capital Virginia Intermediate Tax-Free ETF, \n dated August 18, 2026, is incorporated by reference to Exhibit 13(c)(i)\n to the Registration Statement of the Registrant on Form N-14 (filed September 22, 2026).
\n	\n	\n	\n
\n	\n (5)	\n Master\n Services Agreement between Sterling Capital Funds and Ultimus Fund Solutions dated August 26, 2024, is incorporated by reference to Exhibit\n (h)(3) to Post-Effective Amendment No. 156 to the Registration Statement of the Registrant on Form N-1A (filed January 28, 2025).
\n	\n	\n	\n
\n	\n	\n (i)	\n Amendment\n to Master Services Agreement dated November 19, 2025 is incorporated by reference to Exhibit 13(c)(i) to the Registration Statement of\n the Registrant on Form N-14 (filed January 15, 2026).
\n	\n	\n	\n
\n	\n (6)	\n ETF\n Master Services Agreement between Registrant, on behalf of Sterling Capital Ultra Short Bond ETF, Sterling Capital Short Duration Bond\n ETF, Sterling Capital National Municipal Bond ETF, Sterling Capital Multi-Strategy Income ETF, Sterling Capital Hedged Equity Premium\n Income ETF, and Sterling Capital Enhanced Core Bond ETF, and FilePoint EDGAR Services, LLC, dated December 8, 2025, is incorporated by\n reference to Exhibit (h)(6) to Post-Effective Amendment No. 162 to the Registration Statement of the Registrant on Form N-1A (filed December\n 8, 2025).
\n	\n	\n	\n
\n	\n	\n (i)	\n Amendment to ETF Master Services Agreement between Registrant, on behalf of Sterling Capital Large Cap Value Focused Factor ETF, Sterling Capital Small Cap Value Focused Factor ETF, Sterling Capital Small Cap Value ETF, Sterling Capital North Carolina Intermediate Tax-Free ETF, Sterling Capital Virginia Intermediate Tax-Free ETF, Sterling Capital Hedged BDC Income ETF, Sterling Capital Macro-Led International Equity ETF, and Sterling Capital AI Leaders ETF, and FilePoint EDGAR Services, LLC, dated October 6, 2026, is filed herewith.
\n	\n	\n	\n
\n	\n (7)	\n ETF\n Transfer Agent Agreement between the Registrant, on behalf of Sterling Capital National Municipal Bond ETF, Sterling Capital Multi-Strategy\n Income ETF, Sterling Capital Hedged Equity Premium Income ETF, and Sterling Capital Enhanced Core Bond ETF, and U.S. Bancorp Fund Services,\n LLC, dated December 8, 2025, is incorporated by reference to Exhibit (h)(7) to Post-Effective Amendment No. 163 to the Registration Statement\n of the Registrant on Form N-1A (filed December 16, 2025).
\n	\n	\n	\n
\n	\n	\n (i)	\n Form\n of Amendment to ETF Transfer Agent Agreement is incorporated by reference to Exhibit 13(d)(i) to the Registration Statement of the Registrant\n on Form N-14 (filed January 15, 2026).

\n	\n	\n (ii)	\n Amendment\n to ETF Transfer Agent Agreement between the Registrant, on behalf of Sterling Capital Large Cap Value Focused Factor ETF, Sterling\n Capital Small Cap Value Focused Factor ETF, Sterling Capital Small Cap Value ETF, Sterling Capital North Carolina Intermediate\n Tax-Free ETF, Sterling Capital Virginia Intermediate Tax-Free ETF, Sterling Capital Hedged BDC Income ETF, Sterling Capital\n Macro-Led International Equity ETF, and Sterling Capital AI Leaders ETF, and U.S. Bancorp Fund Services, LLC, dated October 6, 2026,\n is filed herewith.
\n	\n	\n	\n
\n	\n (8)	\n ETF\n Master Services Agreement between the Registrant, on behalf of Sterling Capital Ultra Short Bond ETF, Sterling Capital Short Duration\n Bond ETF, Sterling Capital National Municipal Bond ETF, Sterling Capital Multi-Strategy Income ETF, Sterling Capital Hedged Equity Premium\n Income ETF, and Sterling Capital Enhanced Core Bond ETF, and Ultimus Fund Solutions, dated December 8, 2025, is incorporated by reference\n to Exhibit (h)(8) to Post-Effective Amendment No. 162 to the Registration Statement of the Registrant on Form N-1A (filed December 8,\n 2025).
\n	\n	\n	\n
\n	\n	\n (i)	\n Amendment\n to ETF Master Services Agreement between the Registrant, on behalf of Sterling Capital Large Cap Value Focused Factor ETF, Sterling\n Capital Small Cap Value Focused Factor ETF, Sterling Capital Small Cap Value ETF, Sterling Capital North Carolina Intermediate\n Tax-Free ETF, Sterling Capital Virginia Intermediate Tax-Free ETF and Ultimus Fund Solutions LLC, dated August 18, 2026, is filed\n herewith.
\n	\n	\n	\n
\n	\n (9)	\n BlackRock\n Rule 12d1-4 Fund of Funds Investment Agreement is incorporated by reference to Exhibit (h)(7) to Post-Effective Amendment No. 149 to the\n Registration Statement of the Registrant on Form N-1A (filed January 28, 2022).
\n	\n	\n	\n
\n	\n (10)	\n Form\n of Authorized Participant Agreement, is incorporated by reference to Exhibit (h)(10) to Post-Effective Amendment No. 162 to the Registration\n Statement of the Registrant on Form N-1A (filed December 8, 2025).
\n	\n	\n
\n	\n (11)	\n Master Services Agreement for Orphaned Accounts between the Registrant on behalf of on behalf of Sterling Capital Large Cap Focused Factor Value ETF, Sterling Capital Small Cap Focused Factor Value ETF, Sterling Capital Small Cap Value ETF, Sterling Capital North Carolina Intermediate Tax-Free ETF, Sterling Capital Virginia Intermediate Tax-Free ETF, and Ultimus Fund Solutions LLC , dated October 6, 2026, is filed herewith.
\n	\n	\n	\n
\n (i)	\n (1)	\n Opinion\n of Ropes & Gray LLP, for Sterling Capital Stratton Mid Cap Value Fund, Sterling Capital Stratton Real Estate Fund and Sterling Capital\n Stratton Small Cap Value Fund, is incorporated by reference to Exhibit (i) to Post-Effective Amendment No. 114 to the Registration Statement\n of the Registrant on Form N-1A (filed July 23, 2015).
\n	\n	\n	\n
\n	\n (2)	\n Opinion\n of Ropes & Gray LLP is incorporated by reference to Exhibit (i) to Post-Effective Amendment No. 108 to the Registration Statement\n of the Registrant on Form N-1A (filed January 29, 2015).
\n	\n	\n	\n
\n	\n (3)	\n Opinion\n of Ropes & Gray LLP is incorporated by reference to Exhibit (i)(3) to Post-Effective Amendment No. 123 to the Registration Statement\n of the Registrant on Form N-1A (filed September 29, 2016).

	(4)	Opinion of Ropes & Gray LLP is incorporated by reference to Exhibit (i)(4) to Post-Effective Amendment No. 132 to the Registration Statement of the Registrant on Form N-1A (filed April 4, 2017).

	(5)	Opinion of Ropes & Gray LLP is incorporated by reference to Exhibit (i)(4) to Post-Effective Amendment No. 137 to the Registration Statement of the Registrant on Form N-1A (filed January 25, 2018).

	(6)	Opinion of Ropes & Gray LLP is incorporated by reference to Exhibit (i)(6) to Post-Effective Amendment No. 147 to the Registration Statement of the Registrant on Form N-1A (filed January 27, 2021).

	(7)	Opinion of Ropes & Gray LLP is incorporated by reference to Exhibit (i)(7) to Post-Effective Amendment No. 158 to the Registration Statement of the Registrant on Form N-1A (filed May 2, 2025).

	(8)	Opinion of Ropes & Gray LLP is incorporated by reference to Exhibit (i)(7) to Post-Effective Amendment No. 162 to the Registration Statement of the Registrant on Form N-1A (filed December 8, 2025).

	(9)	Opinion of Ropes & Gray LLP is incorporated by reference to Exhibit (i)(9) to Post-Effective Amendment No. 167 to the Registration Statement of the Registrant on Form N-1A (filed February 10, 2026).

	(10)	Opinion of Ropes & Gray LLP is incorporated by reference to Exhibit (i)(10) to Post-Effective Amendment No. 168 to the Registration Statement of the Registrant on Form N-1A (filed February 10, 2026).

	(11)	Opinion of Ropes & Gray LLP is filed herewith.

(j)	(1)	Consent of Independent Auditor is incorporated by reference to Exhibit (j)(1) to Post-Effective Amendment No. 171 to the Registration Statement of the Registrant on Form N-1A (filed August 5, 2026).

	(2)	Consent of ACA Performance Services, LLC is incorporated by reference to Exhibit (j)(2) to Post-Effective Amendment No. 123 to the Registration Statement of the Registrant on Form N-1A (filed September 29, 2016).

(k)		Not applicable.

(l)		Not applicable.

(m)	(1)	Amended and Restated Distribution and Shareholder Services Plan dated October 14, 2009 is incorporated by reference to Exhibit No. (m)(1) to Post-Effective Amendment No. 64 to the Registration Statement of the Registrant on Form N-1A (filed January 28, 2010).

		(i)	Revised Schedule A to Amended and Restated Distribution and Shareholder Services Plan as amended and restated February 1, 2010 is incorporated by reference to Exhibit (m)(1)(i) to Post-Effective Amendment No. 64 to the Registration Statement of the Registrant on Form N-1A (filed January 28, 2010).

	(ii)	Amended and Restated Distribution and Shareholder Services Plan dated November 18, 2011 is incorporated by reference to Exhibit (m)(1)(ii) to Post-Effective Amendment No. 78 to the Registration Statement of the Registrant on Form N-1A (filed January 17, 2012).

	(iii)	Amended and Restated Distribution and Shareholder Services Plan is incorporated by reference to Exhibit (m)(1)(iii) to Post-Effective Amendment No. 88 to the Registration Statement of the Registrant on Form N-1A (filed November 19, 2012).

	(iv)	Amended and Restated Distribution and Shareholder Services Plan dated November 15, 2012 is incorporated by reference to Exhibit (m)(1)(iv) to Post-Effective Amendment No. 91 to the Registration Statement of the Registrant on Form N-1A (filed January 30, 2013).

	(v)	Amended and Restated Distribution and Shareholder Services Plan dated December 12, 2013 is incorporated by reference to Exhibit (m)(1)(v) to Post-Effective Amendment No. 102 to the Registration Statement of the Registrant on Form N-1A (filed January 29, 2014).

	(vi)	Amended and Restated Distribution and Shareholder Services Plan dated November 25, 2014 is incorporated by reference to Exhibit (m)(1)(vi) to Post-Effective Amendment No. 108 to the Registration Statement of the Registrant on Form N-1A (filed January 29, 2015).

	(vii)	Amended and Restated Distribution and Shareholder Services Plan dated August 20, 2015 is incorporated by reference to Exhibit (m)(1)(vii) to Post-Effective Amendment No. 116 to the Registration Statement of the Registrant on Form N-1A (filed November 30, 2015).

	(viii)	Amended and Restated Distribution and Shareholder Services Plan dated August 25, 2016 is incorporated by reference to Exhibit (m)(1)(viii) to Post-Effective Amendment No. 123 to the Registration Statement of the Registrant on Form N-1A (filed September 29, 2016).

	(ix)	Amended and Restated Distribution and Shareholder Services Plan dated March 1, 2017 is incorporated by reference to Exhibit (m)(1)(ix) to Post-Effective Amendment No. 131 to the Registration Statement of the Registrant on Form N-1A (filed April 4, 2017).

	(x)	Amended and Restated Distribution and Shareholder Services Plan dated November 19, 2025 is incorporated by reference to Exhibit 10(a)(x) to the Registration Statement of the Registrant on Form N-14 (filed January 15, 2026).

(2)	ETF Distribution and Shareholder Services Plan dated November 19, 2025 between the Registrant, on behalf of Sterling Capital Ultra Short Bond ETF, Sterling Capital Short Duration Bond ETF, Sterling Capital National Municipal Bond ETF, Sterling Capital Multi-Strategy Income ETF, Sterling Capital Hedged Equity Premium Income ETF, and Sterling Capital Enhanced Core Bond ETF, and Sterling Capital Distributors, LLC, is incorporated by reference to Exhibit (e)(6) to Post-Effective Amendment No. 162 to the Registration Statement of the Registrant on Form N-1A (filed December 8, 2025).

\n	\n	\n (i)	\n Amendment of Schedule A to ETF Distribution and Shareholder Services Plan dated October 6, 2026 between the Registrant, on behalf of Sterling Capital Large Cap Value Focused Factor ETF, Sterling Capital Small Cap Value Focused Factor ETF, Sterling Capital Small Cap Value ETF, Sterling Capital North Carolina Intermediate Tax-Free ETF, Sterling Capital Virginia Intermediate Tax-Free ETF, and Sterling Capital Distributors, LLC is filed herewith.
\n	\n	\n	\n
\n (n)	\n (1)	\n Multiple\n Class Plan effective February 1, 2010 is incorporated by reference to Exhibit (n)(1) to Post-Effective Amendment No. 63 to the Registration\n Statement of the Registrant on Form N-1A (filed November 25, 2009).
\n	\n	\n	\n
\n	\n	\n (i)	\n Amendment\n to Multiple Class Plan dated June 29, 2011 is incorporated by reference to Exhibit (n)(1)(i) to Post-Effective Amendment No. 74 to the\n Registration Statement of the Registrant on Form N-1A (filed June 29, 2011).
\n	\n	\n	\n
\n	\n	\n (ii)	\n Amendment\n to Multiple Class Plan dated November 18, 2011 is incorporated by reference to Exhibit (n)(1)(ii) to Post-Effective Amendment No. 78 to\n the Registration Statement of the Registrant on Form N-1A (filed January 17, 2012).
\n	\n	\n	\n
\n	\n	\n (iii)	\n Amendment\n to Multiple Class Plan dated November 20, 2012 is incorporated by reference to Exhibit (n)(1)(iii) to Post-Effective Amendment No. 88\n to the Registration Statement of the Registrant on Form N-1A (filed November 19, 2012).
\n	\n	\n	\n
\n	\n	\n (iv)	\n Amendment\n to Multiple Class Plan dated November 15, 2012 is incorporated by reference to Exhibit (n)(1)(iv) to Post-Effective Amendment No. 89 to\n the Registration Statement of the Registrant on Form N-1A (filed November 29, 2012).
\n	\n	\n	\n
\n	\n	\n (v)	\n Amendment\n to Multiple Class Plan is incorporated by reference to Exhibit (n)(1)(v) to Post-Effective Amendment No. 100 to the Registration Statement\n of the Registrant on Form N-1A (filed December 12, 2013).
\n	\n	\n	\n
\n	\n	\n (vi)	\n Amendment\n to Multiple Class Plan dated November 19, 2014 is incorporated by reference to Exhibit (n)(1)(vi) to Post-Effective Amendment No. 108\n to the Registration Statement of the Registrant on Form N-1A (filed January 29, 2015).
\n	\n	\n	\n
\n	\n	\n (vii)	\n Amendment\n to Multiple Class Plan dated August 20, 2015 is incorporated by reference to Exhibit (n)(1)(vi) to Post-Effective Amendment No. 116 to\n the Registration Statement of the Registrant on Form N-1A (filed November 30, 2015).
\n	\n	\n	\n
\n	\n	\n (viii)	\n Amendment\n to Multiple Class Plan dated August 25, 2016 is incorporated by reference to Exhibit (n)(1)(vii) to Post-Effective Amendment No. 123 to\n the Registration Statement of the Registrant on Form N-1A (filed September 29, 2016).
\n	\n	\n	\n

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

\n	\n	\n (ix)	\n Amendment\n to Multiple Class Plan dated March 1, 2017 is incorporated by reference to Exhibit (n)(1)(ix) to Post-Effective Amendment No. 131 to the\n Registration Statement of the Registrant on Form N-1A (filed April 4, 2017).
\n	\n	\n	\n
\n	\n	\n (x)	\n Amendment\n to Multiple Class Plan dated August 24, 2017 is incorporated by reference to Exhibit (n)(1)(x) to Post-Effective Amendment No. 135 to\n the Registration Statement of the Registrant on Form N-1A (filed November 28, 2017).

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

		(xi)	Amendment to Multiple Class Plan dated November 15, 2018 is incorporated by reference to Exhibit (n)(1)(xi) to Post-Effective Amendment No. 140 to the Registration Statement of the Registrant on Form N-1A (filed November 29, 2018).

		(xii)	Amendment to Multiple Class Plan dated February 26, 2020 is incorporated by reference to Exhibit (n)(1)(xii) to Post-Effective Amendment No. 147 to the Registration Statement of the Registrant on Form N-1A (filed January 27, 2021).

		(xiii)	Amendment to Multiple Class Plan dated February 24, 2021 is incorporated by reference to Exhibit (n)(1)(xiii) to Post-Effective Amendment No. 150 to the Registration Statement of the Registrant on Form N-1A (filed November 29, 2022).

		(xiv)	Amendment to Multiple Class Plan dated February 23, 2022 is incorporated by reference to Exhibit (n)(1)(xiv) to Post-Effective Amendment No. 150 to the Registration Statement of the Registrant on Form N-1A (filed November 29, 2022).

		(xv)	Amendment to Multiple Class Plan dated November 19, 2025 is incorporated by reference to Exhibit 10(b)(xv) to the Registration Statement of the Registrant on Form N-14 (filed January 15, 2026).

(o)	(1)	Code of Ethics for Sterling Capital Funds dated November 8, 1994 and amended August 24, 2016 is incorporated by reference to Exhibit (p)(1) to Post-Effective Amendment No. 125 to the Registration Statement of the Registrant on Form N-1A (filed November 29, 2016).

	(2)	Amended Code of Ethics for Sterling Capital Management LLC dated August 30, 2019 is incorporated by reference to Exhibit (p)(2) to Post-Effective Amendment No. 143 to the Registration Statement of the Registrant on Form N-1A (filed November 26, 2019).

(p)	(3)	Code of Ethics for Guardian Capital LP is incorporated by reference to Exhibit (q) to Post-Effective Amendment No. 162 to the Registration Statement of the Registrant on Form N-1A (filed December 8, 2025).

Item\n29. Persons Controlled By or Under Common Control with Registrant

None.

Item\n30. Indemnification

Article VIII, Sections 1 and\n2 of the Registrant’s Amended and Restated Agreement and Declaration of Trust provides as follows:

Trustees,\nOfficers, etc.

Section\n1. The Trust shall indemnify each of its Trustees and officers (including persons who serve at the Trust’s request as directors,\nofficers or trustees of another organization in which the Trust has any interest as a shareholder, creditor or otherwise) (hereinafter\nreferred to as a “Covered Person”) against all liabilities and expenses, including but not limited to amounts paid in satisfaction\nof judgments, in compromise or as fines and penalties, and counsel fees reasonably incurred by any Covered Person in connection with the\ndefense or disposition of any action, suit or other proceeding, whether civil or criminal, before any court or administrative or legislative\nbody, in which such Covered Person may be or may have been involved as a party or otherwise or with which such Covered Person may be or\nmay have been threatened, while in office or thereafter, by reason of being or having been such a Covered Person except with respect to\nany matter as to which such Covered Person shall have been finally adjudicated in any such action, suit or other proceeding to be liable\nto the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved\nin the conduct of such Covered Person’s office. Expenses, including counsel fees so incurred by any such Covered Person (but excluding\namounts paid in satisfaction of judgments, in compromise or as fines or penalties), shall be paid from time to time by the Trust in advance\nof the final disposition of any such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Covered Person\nto repay amounts so paid to the Trust if it is ultimately determined that indemnification of such expenses is not authorized under this\nArticle, provided, however, that either (a) such Covered Person shall have provided appropriate security for such undertaking, (b) the\nTrust shall be insured against losses arising from any such advance payments or (c) either a majority of the disinterested Trustees acting\non the matter (provided that a majority of the disinterested Trustees then in office act on the matter), or independent legal counsel\nin a written opinion, shall have determined, based upon a review of readily available facts (as opposed to a full trial type inquiry)\nthat there is reason to believe that such Covered Person will be found entitled to indemnification under this Article.

Compromise\nPayment

Section\n2. As to any matter disposed of (whether by a compromise payment, pursuant to a consent decree or otherwise) without an adjudication\nby a court, or by any other body before which the proceeding was brought, that such Covered Person either (a) did not act in good faith\nin the reasonable belief that his action was in the best interests of the Trust or (b) is liable to the Trust or its Shareholders by reason\nof willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office,\nindemnification shall be provided if (a) approved as in the best interests of the Trust, after notice that it involved such indemnification,\nby at least a majority of the disinterested Trustees acting on the matter (provided that a majority of the disinterested Trustees then\nin office act on the matter) upon a determination, based upon a review of readily available facts (as opposed to a full trial type inquiry)\nthat such Covered Person acted in good faith in the reasonable belief that his action was in the best interests of the Trust and is not\nliable to the Trust or its Shareholders by reasons of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties\ninvolved in the conduct of his or her office, or (b) there has been obtained an opinion in writing of independent legal counsel, based\nupon a review of readily available facts (as opposed to a full trial type inquiry) to the effect that such Covered Person appears to have\nacted in good faith in the reasonable belief that his action was in the best interests of the Trust and that such indemnification would\nnot protect such Person against any liability to the Trust to which he would otherwise be subject by reason of willful misfeasance, bad\nfaith, gross negligence or reckless disregard of the duties involved in the conduct of his office. Any approval pursuant to this Section\nshall not prevent the recovery

from any Covered Person of\nany amount paid to such Covered Person in accordance with this Section as indemnification if such Covered Person is subsequently adjudicated\nby a court of competent jurisdiction not to have acted in good faith in the reasonable belief that such Covered Person’s action\nwas in the best interests of the Trust or to have been liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith,\ngross negligence or reckless disregard of the duties involved in the conduct of such Covered Person’s office.

The Trust has also entered\ninto agreements with each of its trustees pursuant to which each of the Funds has agreed to indemnify each Trustee to the maximum extent\npermitted by applicable law against any liability and expense incurred by the Trustee by reason of the Trustee being or having been a\nTrustee.

Insofar as indemnification\nfor liability arising under the Securities Act of 1933 may be permitted to trustees, officers, and controlling persons of Registrant pursuant\nto the foregoing provisions, or otherwise, Registrant has been advised that in the opinion of the Securities and Exchange Commission such\nindemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification\nagainst such liabilities (other than the payment by Registrant of expenses incurred or paid by a trustee, officer, or controlling person\nof Registrant in the successful defense of any action, suit, or proceeding) is asserted by such trustee, officer, or controlling person\nin connection with the securities being registered, Registrant will, unless in the opinion of its counsel the matter has been settled\nby controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against\npublic policy as expressed in the Act and will be governed by the final adjudication of such issue.

Indemnification for the Registrant’s\nprincipal underwriter is provided for in the Underwriting Agreement incorporated herein by reference as Exhibit (e)(1). The Registrant\nmaintains a directors and officers liability insurance policy. In addition, certain officers and the interested trustee are covered by\nTruist Financial Corporation’s directors and officers liability insurance policy.

Item\n31. Business and Other Connections of Investment Advisers

Sterling Capital Management\nLLC (“Sterling Capital” or the “Adviser”) is the investment adviser for the Funds. Sterling Capital, located at\n4350 Congress Street, Suite 1000, Charlotte, NC 28209, is a North Carolina limited liability company and an indirect, wholly-owned subsidiary\nof Fédération des caisses Desjardins du Québec (“Desjardins”). Desjardins is the largest financial cooperative\nin Canada and the eighth largest in the world, with assets of C$510.2 billion as of December 31, 2025. Sterling Capital manages and supervises\nthe investment of the Funds’ assets on a discretionary basis, subject to oversight by the Board of Trustees. Sterling Capital has\nprovided investment management services to corporations, pension and profit sharing plans, trusts, estates and other institutions and\nindividuals since 1970. As of September 30, 2026, Sterling Capital has more than $67 billion in assets under management.

Sterling Capital manages and\nsupervises the investment of the Funds’ assets on a discretionary basis, subject to oversight by the Board of Trustees. Sterling\nCapital has provided investment management services to corporations, pension and profit sharing plans, trusts, estates and other institutions\nand individuals since 1970. As of September 30, 2026, Sterling Capital has more than $67 billion in assets under management.

Guardian Capital LP (the “Sub-Adviser”)\nis located at 199 Bay Street, Commerce Court West, Suite 2700, Toronto, Ontario, Canada M5L 1E8, and serves as the sub-adviser for certain\ndesignated funds of the Trust. The Sub-Adviser is a subsidiary of Guardian Capital Group Limited and an indirect, wholly-owned subsidiary\nof Desjardins. The Sub-Adviser is an affiliated person of Sterling Capital. The Sub-Adviser manages and supervises the investment of the\ndesignated funds’ assets, subject to oversight by the Adviser and the Board. As of September 30, 2025, the Sub-Adviser had approximately\n$19.0 million CAD ($13.7 million in USD) in assets under management. As compensation for its services, the Adviser pays to the

Sub-Adviser an annual fee,\npaid monthly, for its services, subject to any applicable reduction as described further in the Sub-Advisory Agreement and the SAI.

Set forth below is information\nas to any other business, profession, vocation or employment of a substantial nature (other than service in subsidiaries of the Registrant)\nin which each director or senior officer of Sterling Capital is, or at any time during the last two fiscal years has been, engaged for\nhis or her own account or in the capacity of director, officer, employee, partner, or trustee.

\n \n \n \n \n \n \n \n \n \n \n \n \n

\n Name\n and Position with Sterling Capital	\n Other\n business, profession, vocation, or employment
\n Robert Bridges, Senior\n Managing Director and Portfolio Manager	\n Board\n of Directors of Bridges Investment Counsel, Inc.; Director and Shareholder of Bridges Investment Fund, Inc.; Director of Bridges Trust\n Company; Director of Bridges Holding Company; Member, Board of Managers of SCM Investors LLC
\n Mark M. Montgomery,\n Senior Managing Director and Portfolio Manager	\n Member,\n Board of Managers of SCM Investors LLC
\n Scott A. Haenni, Chief\n Executive Officer	\n Member,\n Board of Managers of SCM Investors LLC

The principal business address\nof Bridges Investment Counsel, Inc. is 13333 California Street, Suite 500, Omaha, NE 68154.

The principal business address\nof SCM Investors LLC is 4350 Congress Street, Suite 1000, Charlotte, NC 28209.

Item\n32. Principal Underwriter

\n \n \n \n

Item\n 32(a)

Sterling\n Capital Distributors, LLC (the “Distributor”) serves as principal underwriter for the following investment company registered\n under the Investment Company Act of 1940, as amended:

1. Sterling Capital Funds

\n \n \n \n

Item\n 32(b)

The\n following are the Officers and Manager of the Distributor, the Registrant’s underwriter. The Distributor’s main business address\n is Three Canal Plaza, Suite 100, Portland, ME 04101.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

\n Name	\n Address	\n Position\n with Underwriter	\n Position\n with Registrant
\n Teresa Cowan	\n 111 E. Kilbourn Ave,\n Suite 2200, Milwaukee, WI 53202	\n President/Manager	\n None
\n Chris Lanza	\n Three Canal Plaza, Suite\n 100, Portland, ME 04101	\n Vice President	\n None
\n Kate Macchia	\n Three Canal Plaza, Suite\n 100, Portland, ME 04101	\n Vice President	\n None

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

\n Kelly B. Whetstone	\n Three Canal Plaza, Suite\n 100, Portland, ME 04101	\n Secretary	\n None
\n Susan L. LaFond	\n 111 E. Kilbourn Ave,\n Suite 2200, Milwaukee, WI 53202	\n Treasurer, Vice President,\n and Chief Compliance Officer	\n None
\n Weston Sommers	\n Three Canal Plaza, Suite\n 100, Portland, ME 04101	\n Financial and Operations\n Principal and Chief Financial Officer	\n None

\n \n \n \n \n \n \n \n \n \n

\n Item 32(c)	\n Not applicable.

\n Item\n 33.	\n Location\n of Accounts and Records

Persons maintaining physical\npossession of accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and\nthe rules promulgated thereunder are as follows:

\n \n \n \n \n

(1)

Sterling\n Capital Funds

434 Fayetteville\nSt., Suite 500

Raleigh,\nNC 27601

Attention:\nSecretary

(Registrant)

\n \n \n \n \n

(2)

Sterling\n Capital Management LLC

4350 Congress\nStreet, Suite 1000

Charlotte,\nNC 28209

Sterling\nCapital Management LLC

434 Fayetteville\nSt., Suite 500

Raleigh\nNC 27601

(Investment\nAdviser and Administrator for all Funds)

\n \n \n \n \n

(3)

U.S.\n Bank National Association

425 Walnut\nStreet, M.L. CN-OH-W6TC

Cincinnati,\nOH 45202

(Custodian)

\n \n \n \n \n

(4)

Ropes\n & Gray LLP

Prudential\nTower, 800 Boylston Street

Boston,\nMA 02199-3600

(Declaration\nof Trust, Bylaws, Minutes Book, Fund Agreements)

\n \n \n \n \n

(5)

Ultimus\n Fund Solutions, LLC.

225 Pictoria\nDrive

Cincinnati,\nOH 45246

(Transfer\nAgent)

\n \n \n \n \n

(6)

Ultimus\n Fund Solutions, LLC.

225 Pictoria\nDrive

Cincinnati,\nOH 45246

(Fund Accountant\nand Sub-Administrator)

\n \n \n \n \n

(7)

Sterling\n Capital Distributors, LLC (formerly, Sterling Capital Distributors, Inc.)

Three Canal\nPlaza, Suite 100

Portland,\nME 04101

(Distributor)

Item\n34. Management Services

Not applicable.

Item\n35. Undertakings

Not applicable.

NOTICE

A copy of the Amended and\nRestated Agreement and Declaration of Trust dated August 27, 2025, as amended, of the Sterling Capital Funds is on file with the Secretary\nof State of the Commonwealth of Massachusetts and notice is hereby given that this instrument is executed on behalf of the Registrant\nby officers of the registrant as officers and not individually and that the obligations of or arising out of this instrument are not binding\nupon any of the trustees, officers or shareholders individually but are binding only upon the assets and property of the Registrant.

SIGNATURES

Pursuant to the requirements\nof the Securities Act of 1933, as amended (the “Securities Act”), and the Investment Company Act of 1940, as amended, the\nRegistrant certifies that it meets all the requirements for effectiveness of the registration statement under Rule 485(b) under the Securities\nAct and has duly caused this Post-Effective Amendment No. 173 to its Registration Statement to be signed on its behalf by the undersigned,\nthereunto duly authorized, in the City of Boston, Massachusetts on the 19^th day\nof October 2026.

\n \n \n \n \n \n \n \n \n \n \n \n \n

\n STERLING CAPITAL FUNDS	\n
\n	\n
\n /s/\n James T. Gillespie	\n
\n *James T. Gillespie President	\n

Pursuant to the requirements\nof the Securities Act of 1933, this Post-Effective Amendment No. 173 has been signed below by the following persons in the capacities\nand on the dates indicated.

\n Signature	\n Title	\n Date
\n	\n	\n
\n /s/ James T. Gillespie	\n President\n and Principal Executive Officer	\n October 19, 2026
\n * James T. Gillespie	\n	\n
\n	\n	\n
\n /s/ Todd M. Miller	\n Treasurer\n and Principal Financial Officer	\n October 19, 2026
\n * Todd M. Miller	\n (Principal\n Accounting Officer)	\n
\n	\n	\n
\n /s/ Drew T. Kagan	\n Trustee	\n October 19, 2026
\n *Drew T. Kagan	\n	\n
\n	\n	\n
\n /s/ Laura C. Bingham	\n Trustee	\n October 19, 2026
\n *Laura C. Bingham	\n	\n
\n	\n	\n
\n /s/ Scott A. Haenni	\n Senior\n Managing Director and Chief Executive Officer	\n October 19, 2026
\n *Scott A. Haenni	\n	\n
\n	\n	\n
\n /s/ Alan G. Priest	\n Trustee	\n October 19, 2026
\n *Alan G. Priest	\n	\n
\n	\n	\n
\n /s/ Kimberly R. Storms	\n Trustee	\n October 19, 2026
\n *Kimberly R. Storms	\n	\n
\n	\n	\n
\n /s/ David L. Wedding	\n Trustee	\n October 19, 2026
\n *David L. Wedding	\n	\n

\n \n \n \n \n \n \n \n \n

\n By:\n	\n /s/\n Thomas R. Hiller	\n
\n	\n Thomas\n R. Hiller	\n

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\n *	\n By\n Thomas R. Hiller, solely in his capacity as Attorney-in-Fact, pursuant to powers of attorney filed herewith.

POWER OF ATTORNEY

James T. Gillespie, whose signature appears below,\ndoes hereby constitute and appoint Thomas R. Hiller, Margaret S. Moore, and Alexandra Oprescu, each individually, his true and lawful\nattorneys and agents, with power of substitution or resubstitution, to do any and all acts and things and to execute any and all instruments\nwhich said attorneys and agents, each individually, may deem necessary or advisable or which may be required to enable Sterling Capital\nFunds and Sterling Capital Variable Insurance Funds (the “Trust”), to comply with the Investment Company Act of 1940, as amended,\nand the Securities Act of 1933, as amended (“Acts”), and any rules, regulations or requirements of the Securities and Exchange\nCommission in respect thereof, in connection with the filing and effectiveness of any and all amendments to the Trust’s Registration\nStatement on Form N-1A pursuant to said Acts, including specifically, but without limiting the generality of the foregoing, the power\nand authority to sign in the name and on behalf of the undersigned as a trustee and/or officer of the Trust any and all such amendments\nfiled with the Securities and Exchange Commission under said Acts, and any other instruments or documents related thereto, and the undersigned\ndoes hereby ratify and confirm all that said attorneys and agents, or either of them, shall do or cause to be done by virtue thereof.

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Dated: May 1, 2012	/s/ James T. Gillespie
	James T. Gillespie

POWER OF ATTORNEY

Drew T. Kagan, whose signature appears below, does\nhereby constitute and appoint Thomas R. Hiller, Margaret S. Moore, and Alexandra Oprescu, each individually, his true and lawful attorneys\nand agents, with power of substitution or resubstitution, to do any and all acts and things and to execute any and all instruments which\nsaid attorneys and agents, each individually, may deem necessary or advisable or which may be required to enable Sterling Capital Funds\nand Sterling Capital Variable Insurance Funds (the “Trust”), to comply with the Investment Company Act of 1940, as amended,\nand the Securities Act of 1933, as amended (“Acts”), and any rules, regulations or requirements of the Securities and Exchange\nCommission in respect thereof, in connection with the filing and effectiveness of any and all amendments to the Trust’s Registration\nStatement on Form N-1A pursuant to said Acts, including specifically, but without limiting the generality of the foregoing, the power\nand authority to sign in the name and on behalf of the undersigned as a trustee and/or officer of the Trust any and all such amendments\nfiled with the Securities and Exchange Commission under said Acts, and any other instruments or documents related thereto, and the undersigned\ndoes hereby ratify and confirm all that said attorneys and agents, or either of them, shall do or cause to be done by virtue thereof.

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Dated: May 1, 2012	/s/ Drew T. Kagan
	Drew T. Kagan

POWER OF ATTORNEY

Laura C. Bingham, whose signature appears below, does\nhereby constitute and appoint Thomas R. Hiller, Margaret S. Moore, and Alexandra Oprescu, each individually, her true and lawful attorneys\nand agents, with power of substitution or resubstitution, to do any and all acts and things and to execute any and all instruments which\nsaid attorneys and agents, each individually, may deem necessary or advisable or which may be required to enable Sterling Capital Funds\nand Sterling Capital Variable Insurance Funds (the “Trust”), to comply with the Investment Company Act of 1940, as amended,\nand the Securities Act of 1933, as amended (“Acts”), and any rules, regulations or requirements of the Securities and Exchange\nCommission in respect thereof, in connection with the filing and effectiveness of any and all amendments to the Trust’s Registration\nStatement on Form N-1A pursuant to said Acts, including specifically, but without limiting the generality of the foregoing, the power\nand authority to sign in the name and on behalf of the undersigned as a trustee and/or officer of the Trust any and all such amendments\nfiled with the Securities and Exchange Commission under said Acts, and any other instruments or documents related thereto, and the undersigned\ndoes hereby ratify and confirm all that said attorneys and agents, or either of them, shall do or cause to be done by virtue thereof.

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Dated: May 1, 2012	/s/ Laura C. Bingham
	Laura C. Bingham

POWER OF ATTORNEY

Scott Haenni, whose signature appears below, does\nhereby constitute and appoint Thomas R. Hiller, Margaret S. Moore, and Gary Brooks, each individually, his true and lawful attorneys and\nagents, with power of substitution or resubstitution, to do any and all acts and things and to execute any and all instruments which said\nattorneys and agents, each individually, may deem necessary or advisable or which may be required to enable Sterling Capital Funds (the\n“Trust”), to comply with the Investment Company Act of 1940, as amended, and the Securities Act of 1933, as amended (“Acts”),\nand any rules, regulations or requirements of the Securities and Exchange Commission in respect thereof, in connection with the filing\nand effectiveness of any and all amendments to the Trust’s Registration Statement on Form N-1A pursuant to said Acts, including\nspecifically, but without limiting the generality of the foregoing, the power and authority to sign in the name and on behalf of the undersigned\nas a trustee and/or officer of the Trust any and all such amendments filed with the Securities and Exchange Commission under said Acts,\nand any other instruments or documents related thereto, and the undersigned does hereby ratify and confirm all that said attorneys and\nagents, or either of them, shall do or cause to be done by virtue thereof.

\n \n \n \n \n \n \n \n \n

Dated: October 30, 2023	/s/ Scott Haenni
	Scott Haenni

POWER OF ATTORNEY

Alan G. Priest, whose signature appears below, does\nhereby constitute and appoint Thomas R. Hiller, Margaret S. Moore, and Alexandra Oprescu, each individually, his true and lawful attorneys\nand agents, with power of substitution or resubstitution, to do any and all acts and things and to execute any and all instruments which\nsaid attorneys and agents, each individually, may deem necessary or advisable or which may be required to enable Sterling Capital Funds\nand Sterling Capital Variable Insurance Funds (the “Trust”), to comply with the Investment Company Act of 1940, as amended,\nand the Securities Act of 1933, as amended (“Acts”), and any rules, regulations or requirements of the Securities and Exchange\nCommission in respect thereof, in connection with the filing and effectiveness of any and all amendments to the Trust’s Registration\nStatement on Form N-1A pursuant to said Acts, including specifically, but without limiting the generality of the foregoing, the power\nand authority to sign in the name and on behalf of the undersigned as a trustee and/or officer of the Trust any and all such amendments\nfiled with the Securities and Exchange Commission under said Acts, and any other instruments or documents related thereto, and the undersigned\ndoes hereby ratify and confirm all that said attorneys and agents, or either of them, shall do or cause to be done by virtue thereof.

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Dated: July 1, 2012	/s/ Alan G. Priest
	Alan G. Priest

POWER OF ATTORNEY

Todd M. Miller, whose signature appears below, does\nhereby constitute and appoint Thomas R. Hiller and Margaret S. Moore, each individually, his true and lawful attorneys and agents, with\npower of substitution or resubstitution, to do any and all acts and things and to execute any and all instruments which said attorneys\nand agents, each individually, may deem necessary or advisable or which may be required to enable Sterling Capital Funds and Sterling\nCapital Variable Insurance Funds (the “Trust”), to comply with the Investment Company Act of 1940, as amended, and the Securities\nAct of 1933, as amended (“Acts”), and any rules, regulations or requirements of the Securities and Exchange Commission in\nrespect thereof, in connection with the filing and effectiveness of any and all amendments to the Trust’s Registration Statement\non Form N-1A pursuant to said Acts, including specifically, but without limiting the generality of the foregoing, the power and authority\nto sign in the name and on behalf of the undersigned as a trustee and/or officer of the Trust any and all such amendments filed with the\nSecurities and Exchange Commission under said Acts, and any other instruments or documents related thereto, and the undersigned does hereby\nratify and confirm all that said attorneys and agents, or either of them, shall do or cause to be done by virtue thereof.

\n \n \n \n \n \n \n \n \n

Dated: January 26, 2015	/s/ Todd M. Miller
	Todd M. Miller

POWER OF ATTORNEY

Kimberly R. Storms, whose signature appears below,\ndoes hereby constitute and appoint Thomas R. Hiller, Margaret S. Moore, and Gary E. Brooks, each individually, his true and lawful attorneys\nand agents, with power of substitution or resubstitution, to do any and all acts and things and to execute any and all instruments which\nsaid attorneys and agents, each individually, may deem necessary or advisable or which may be required to enable Sterling Capital Funds\n(the “Trust”), to comply with the Investment Company Act of 1940, as amended, and the Securities Act of 1933, as amended (“Acts”),\nand any rules, regulations or requirements of the Securities and Exchange Commission in respect thereof, in connection with the filing\nand effectiveness of any and all amendments to the Trust’s Registration Statement on Form N-1A pursuant to said Acts, including\nspecifically, but without limiting the generality of the foregoing, the power and authority to sign in the name and on behalf of the undersigned\nas a trustee and/or officer of the Trust any and all such amendments filed with the Securities and Exchange Commission under said Acts,\nand any other instruments or documents related thereto, and the undersigned does hereby ratify and confirm all that said attorneys and\nagents, or either of them, shall do or cause to be done by virtue thereof.

\n \n \n \n \n \n \n \n \n

Dated: December 15, 2022	/s/ Kimberly R. Storms
	Kimberly R. Storms

POWER OF ATTORNEY

David L. Wedding, whose signature appears below, does\nhereby constitute and appoint Thomas R. Hiller, Margaret S. Moore, and Gary E. Brooks, each individually, his true and lawful attorneys\nand agents, with power of substitution or resubstitution, to do any and all acts and things and to execute any and all instruments which\nsaid attorneys and agents, each individually, may deem necessary or advisable or which may be required to enable Sterling Capital Funds\n(the “Trust”), to comply with the Investment Company Act of 1940, as amended, and the Securities Act of 1933, as amended (“Acts”),\nand any rules, regulations or requirements of the Securities and Exchange Commission in respect thereof, in connection with the filing\nand effectiveness of any and all amendments to the Trust’s Registration Statement on Form N-1A pursuant to said Acts, including\nspecifically, but without limiting the generality of the foregoing, the power and authority to sign in the name and on behalf of the undersigned\nas a trustee and/or officer of the Trust any and all such amendments filed with the Securities and Exchange Commission under said Acts,\nand any other instruments or documents related thereto, and the undersigned does hereby ratify and confirm all that said attorneys and\nagents, or either of them, shall do or cause to be done by virtue thereof.

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Dated: December 16, 2022	/s/ David L. Wedding
	David L. Wedding

EXHIBIT INDEX

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(d)(2)(i)	Amendment of Schedule A to ETF Investment Advisory Agreement between the Registrant, on behalf of Sterling Capital Small Cap Value ETF, Sterling Capital Hedged BDC Income ETF, Sterling Capital Macro-Led International Equity ETF, and Sterling Capital AI Leaders ETF, and Sterling Capital Management LLC.
(d)(3)(i)	Amendment of Schedule A to ETF Investment Advisory Agreement between the Registrant, on behalf of Sterling Capital Large Cap Value Focused Factor ETF, Sterling Capital Small Cap Value Focused Factor ETF, Sterling Capital North Carolina Intermediate Tax-Free ETF, and Sterling Capital Virginia Intermediate Tax-Free ETF, and Sterling Capital Management LLC.
(e)(5)(i)	First Amendment to ETF\n Distribution Agreement among the Registrant, on behalf of Sterling Capital Large Cap Value Focused Factor ETF, Sterling Capital\n Small Cap Value Focused Factor ETF, Sterling Capital Small Cap Value ETF, Sterling Capital North Carolina Intermediate Tax-Free ETF,\n Sterling Capital Virginia Intermediate Tax-Free ETF, Sterling Capital Hedged BDC Income ETF, Sterling Capital Macro-Led\n International Equity ETF, and Sterling Capital AI Leaders ETF, and Sterling Capital Management LLC and Sterling Capital Distributors\n LLC.
(g)(2)(ii)	Amendment to ETF Custody Agreement between Registrant, on behalf of Sterling Capital Large Cap Value Focused Factor ETF, Sterling Capital Small Cap Value Focused Factor ETF, Sterling Capital Small Cap Value ETF, Sterling Capital North Carolina Intermediate Tax-Free ETF, Sterling Capital Virginia Intermediate Tax-Free ETF, Sterling Capital Hedged BDC Income ETF, Sterling Capital Macro-Led International Equity ETF, and Sterling Capital AI Leaders ETF, and U.S. Bank N.A.
(h)(1)(xiii)	Amendment to Administration Agreement.
(h)(2)(i)	Amendment to ETF Unitary Fee Administrative Services Agreement between Registrant, on behalf of Sterling Capital Large Cap Value Focused Factor ETF, Sterling Capital Small Cap Value Focused Factor ETF, Sterling Capital North Carolina Intermediate Tax-Free ETF, and Sterling Capital Virginia Intermediate Tax-Free ETF, and Sterling Capital Management LLC.
(h)(6)(i)	Amendment to ETF Master Services Agreement between Registrant, on behalf of Sterling Capital Large Cap Value Focused Factor ETF, Sterling Capital Small Cap Value Focused Factor ETF, Sterling Capital Small Cap Value ETF, Sterling Capital North Carolina Intermediate Tax-Free ETF, Sterling Capital Virginia Intermediate Tax-Free ETF, Sterling Capital Hedged BDC Income ETF, Sterling Capital Macro-Led International Equity ETF, and Sterling Capital AI Leaders ETF, and FilePoint EDGAR Services, LLC.
(h)(7)(ii)	Amendment to ETF Transfer Agent Agreement between the Registrant, on behalf of Sterling Capital Large Cap Value Focused Factor ETF, Sterling Capital Small Cap Value Focused Factor ETF, Sterling Capital Small Cap Value ETF, Sterling Capital North Carolina Intermediate Tax-Free ETF, Sterling Capital Virginia Intermediate Tax-Free ETF, Sterling Capital Hedged BDC Income ETF, Sterling Capital Macro-Led International Equity ETF, and Sterling Capital AI Leaders ETF, and U.S. Bancorp Fund Services, LLC.
(h)(8)(i)	Amendment to ETF\n Master Services Agreement between the Registrant, on behalf of Sterling Capital Large Cap Value Focused Factor ETF, Sterling Capital\n Small Cap Value Focused Factor ETF, Sterling Capital Small Cap Value ETF, Sterling Capital North Carolina Intermediate Tax-Free ETF,\n Sterling Capital Virginia Intermediate Tax-Free ETF and Ultimus Fund Solutions LLC.
(h)(11)	Master Services Agreement for Orphaned Accounts between the Registrant on behalf of Sterling Capital Large Cap Focused Factor Value ETF, Sterling Capital Small Cap Focused Factor Value ETF, Sterling Capital Small Cap Value ETF, Sterling Capital North Carolina Intermediate Tax-Free ETF, Sterling Capital Virginia Intermediate Tax-Free ETF, and Ultimus Fund Solutions LLC.
(i)(11)	Opinion of Ropes & Gray LLP.
(m)(2)(i)	Amendment of the Schedule A to ETF Distribution and Shareholder Services Plan dated October 6, 2026 between the Registrant, on behalf of Sterling Capital Large Cap Value Focused Factor ETF, Sterling Capital Small Cap Value Focused Factor ETF, Sterling Capital Small Cap Value ETF, Sterling Capital North Carolina Intermediate Tax-Free ETF, Sterling Capital Virginia Intermediate Tax-Free ETF, and Sterling Capital Distributors, LLC.

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