The Fund is actively managed using a model-based approach and seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its net assets, plus borrowings for investment purposes, in fixed income securities, including individual bonds as well as exchange-traded funds (“ETFs”) that invest primarily in bonds. Fixed income securities include, but are not limited to, the following fixed income categories: U.S. government securities (securities issued or guaranteed by the U.S. government or its agencies or instrumentalities) such as Treasury bonds, Treasury notes, T-bills and Treasury Inflation-Protected Securities (TIPS); intermediate term (i.e., two- to ten-year maturity), investment grade bonds traded in the United States that comprise the U.S. aggregate bond market; corporate bonds; high yield (or “junk”) bonds; municipal bonds; residential and commercial mortgage-backed securities (“MBS”); convertible securities; preferred securities; private credit; foreign developed government bonds (i.e., developed market sovereign debt); and emerging market government bonds (i.e., emerging market sovereign debt). The Fund may invest in fixed income securities of any duration or maturity.

Utilizing its own quantitative model, the Fund’s investment adviser, Cambria Investment Management, L.P. (“Cambria” or the “Adviser”), generally selects fixed income securities for inclusion in the Fund’s portfolio tactically based on a comparison of current price trends across fixed income categories. Trend can be defined as the direction that prices of a security are moving in, based on where they have been historically. Trends are made up of peaks and troughs. It is the direction of those peaks and troughs that constitute a market’s trend. Whether those peaks and troughs are moving up, down, or sideways indicates the direction of the trend. The Fund will seek to invest in fixed income segments with prices in an uptrend, i.e., demonstrating price trend strength. Cambria uses its quantitative model to track trends across indices representing each fixed income category and selects the Fund’s investments based on the model’s analysis of both short-term and long-term price trend indicators.

No less frequently than on a quarterly basis, the quantitative algorithm evaluates the price trends of various categories of fixed income securities. Although Cambria seeks to weight equally the applicable fixed income categories demonstrating price trend strength (other than T-Bills) in the Fund’s portfolio, security weights may fluctuate in response to market conditions and investment opportunities that develop between the model’s quarterly calculations.

Cambria expects to obtain exposure to these fixed income securities through investments in other ETFs; however, the Fund may also invest directly in fixed income securities. With respect to private credit, the Fund may obtain exposure to private credit through registered ETFs, but the Fund does not intend to invest directly in private credit as part of its principal investment strategy.

To the extent that the various fixed income categories do not demonstrate price trend strength relative to T-Bills, the Fund may invest up to 100% of its assets in T-Bills, as market conditions warrant. However, if certain categories of the fixed income universe demonstrate significant price trend strength, the Fund may invest a significant portion of its assets in each of those applicable fixed income security categories with potentially no allocation to T-Bills.

Although the Fund employs a model-based investment approach based on Cambria’s proprietary, quantitative algorithm, the Fund may sell a security when Cambria believes that the security is overvalued or better investment opportunities are available, to invest in cash and cash equivalents, or to meet redemptions. Cambria expects to adjust the Fund’s holdings at least quarterly to meet the investment criteria and target allocations (e.g., security weights) established by the Fund’s quantitative algorithm.