The Fund seeks to meet its objective by actively managing a 130/30 long-short equity strategy, investing up to approximately 130% of its net assets in long positions and up to approximately 30% of its net assets in short positions, resulting in net market exposure to U.S. equity markets that averages approximately 100%. The Fund will invest primarily in U.S.-listed equity securities, including common stocks of large, mid, and small capitalization companies. From time to time, in order to protect or enhance the Fund’s returns, the Adviser may utilize exchange traded funds (“ETFs”) as well as derivatives, like options, to gain exposure and for the purposes of deploying hedging strategies, as needed.

130/30 Strategy Implementation: The Fund constructs its portfolio by taking long positions equal up to approximately 130% of net assets in securities the Adviser believes are undervalued or have strong growth potential, while simultaneously establishing short positions equal of up to approximately 30% of net assets in securities the Adviser believes are overvalued or likely to decline. The proceeds from short sales are used to fund additional long positions, creating enhanced exposure to the Adviser's highest conviction ideas while maintaining net market exposure to U.S. equity markets that averages approximately 100%.

The Fund's strategy is systematically guided by Hedgeye Risk Management, LLC's (“Hedgeye” or “HRM”) proprietary Risk Range™ Signals, which utilize a quantitative algorithm incorporating price, volume, and volatility data to determine likely daily trading ranges for publicly-traded securities. These signals provide dynamic buy-low, sell-high parameters that help optimize entry and exit points for both long and short positions. The Adviser leverages these risk ranges to time portfolio adjustments.

The Fund also employs Hedgeye's multi-duration signaling framework across Trade (3 weeks or less), Trend (3 months or more), and Tail (3 years or less) time horizons. This approach enables the portfolio management team to align position sizing and holding periods with the appropriate signal strength and duration, enhancing the Fund's ability to capture alpha while managing downside risk.

Security Selection Process: The Adviser utilizes a sophisticated proprietary intrinsic value model that combines a customized discounted cash flow analysis with risk-adjusted future earnings projections. This framework evaluates companies based on their fundamental ability to generate sustainable cash flows, incorporating both qualitative and quantitative factors to determine the essential worth of each security independent of market sentiment. The model employs multiple valuation methodologies including net present value calculations of expected future cash flows discounted at appropriate rates that reflect the company's risk profile.

The Fund focuses on quality companies, defined as entities possessing perceived sustainable competitive advantages, strong financial health and the ability to generate attractive returns. The Adviser's quality assessment evaluates companies across multiple dimensions including but not limited to return on FCF margins to identify profitable enterprises, debt-to-equity ratios to ensure financial stability, and earnings consistency to verify sustainable growth patterns. Additional quality criteria include strong free cash flow generation, competitive moats, pricing power, and management effectiveness in capital allocation.

The security selection process specifically targets quality companies exhibiting significant positive change elements that indicate potential for accelerated value creation:

Short Sales Strategy: The Fund’s short sales focus on companies exhibiting characteristics that are the inverse of their long selection process. Specifically, the Fund seeks to establish short positions in securities with poor Trade, Trend and/or Tail characteristics. The Fund focuses on companies with deteriorating or negative change elements, such as decelerating sales growth, declining or contracting operational margins, and weakening capital structures. These targets often include firms facing cyclical downturns, eroding competitive advantages, or significant operational challenges that impair profitability. Additionally, the Fund’s proprietary intrinsic value model is used to identify companies trading at premiums to their fundamental worth, with poor cash flow generation, excessive leverage, or unsustainable earnings quality. By systematically shorting securities with these negative attributes, the Fund aims to capitalize on anticipated declines in value while enhancing overall portfolio risk management

The Adviser's internal research team leverages Hedgeye's quantitative signals in combination with fundamental analysis to identify securities exhibiting both quality characteristics and significant change elements. This process involves continuous monitoring of companies within the investment universe, assessment of change catalysts, and evaluation of how these factors interact with broader macroeconomic conditions as measured by Hedgeye's Growth, Inflation, and Policy (GIP) model. The research process incorporates insights from diverse sources including management interviews, industry analysis, and third-party research to validate investment theses and monitor ongoing developments.

Portfolio Construction: The Fund typically maintains between 30-50 long positions and 15-30 short positions, with position sizes determined by the Adviser's conviction level and risk management constraints. The Fund employs risk management techniques, including sector, industry, and individual security position limits to control portfolio risk and maintain appropriate diversification.

Risk Management: The Fund employs various risk management techniques including portfolio optimization, dynamic position sizing, and continuous monitoring of factor exposures to maintain target risk levels while maximizing expected returns from the Adviser's investment insights.

The Fund may also invest in American depositary receipts (ADRs) of foreign companies and may utilize derivatives such as options for hedging purposes or to enhance returns. The Fund may engage in securities lending to generate additional income.

The Fund is classified as “non-diversified” under the Investment Company Act of 1940 (the “1940 Act”), which means that it may invest more of its assets in a smaller number of issuers than “diversified” funds.