The Fund is an actively managed exchange-traded fund (“ETF”) that seeks income, and secondarily, long term capital appreciation. The Fund’s strategy involves two components: (1) purchasing a portfolio of U.S. equity securities with strong quality characteristics (the “Equity Strategy”); and (2) generating income through an options portfolio (the “Options Strategies”), each as described below. Primarily through the Fund’s Options Strategies, the Fund seeks to achieve an annual income target of 15% as described more below.

The Fund’s strategies are overseen by the Adviser and the Fund’s investment sub-adviser, VistaShares, LLC (“VistaShares”). VistaShares selects the equity securities for the Fund’s Equity Strategy, and the Adviser is responsible for implementing the Fund’s Options Strategies. 

Additionally, the Fund will maintain a minor allocation to cash or U.S. Treasuries, not exceeding ten percent of its total assets.

Equity Strategy - VistaShares

The Fund invests in U.S. equity securities (“Underlying Securities”) selected by VistaShares. The Fund’s equity strategy seeks to identify companies with high-quality characteristics through a quantitative methodology that prioritizes financial strength and stability. The selection process focuses on companies demonstrating:

VistaShares applies a disciplined and dynamic approach to managing the Fund’s equity portfolio. The Fund’s portfolio allocations are adjusted quarterly to reflect updated data and evolving market conditions. Additionally, VistaShares may reallocate the Fund’s equity holdings more frequently if necessary to comply with regulatory constraints. For additional information about VistaShares’ security selection processes, please the section in the Fund’s Prospectus titled “Additional Information About the Funds.”

The Fund’s equity strategy generally allocates to between 20 and 50 securities. This strategy aims to capture long-term growth potential by investing in high-quality companies while mitigating portfolio volatility. The Fund invests in both large-capitalization securities, defined as those with a market capitalization exceeding $10 billion, and mid-capitalization securities, defined as those with a market capitalization between $2 billion and $10 billion.

Options Strategies – the Adviser

The Fund seeks to generate income primarily through the use of options strategies involving options contracts on certain or all of its Underlying Securities. These strategies are expected to derive the majority of the Fund’s yield, with the Fund aiming to achieve an annual income target of 15% (the “Annual 15% Target”).

The Fund earns income by collecting premiums from selling (writing) options. When an option is sold, the buyer pays the Fund for the right to either purchase or sell the underlying asset at a predetermined price. The Adviser employs different options strategies based on its market outlook, selecting one or a combination of strategies it believes will achieve the Fund’s income target, while also allowing for potential capital appreciation (growth in asset value). The Adviser also evaluates the performance of the Underlying Securities when choosing which options strategies to deploy.

The specific options strategies the Fund employs may alter its overall risk and return profile, affecting volatility, income, potential for capital appreciation, and the preservation of capital. For instance, by writing covered calls (selling call options on securities already held by the Fund), the Fund may limit its potential gains in exchange for premium income.

Premiums received from selling options are influenced by market volatility, with higher levels of volatility generally leading to higher premiums. As such, the Adviser carefully monitors market conditions to determine when and which options strategies to implement, with a focus on enhancing the Fund’s income generation. Through the active management of its options positions, the Adviser seeks to optimize the Fund’s ability to generate consistent income. For additional information about options and options strategies, please the section in the Fund’s Prospectus titled “Additional Information About the Funds.”

Treasuries

In addition, the Fund will hold cash or short-term U.S. Treasury securities. These securities serve a dual purpose: providing collateral for the Options Strategies and contributing to the Fund’s income generation.

Why invest in the Fund?

The Fund is classified as “non-diversified” under the 1940 Act. The Fund’s investment strategy is expected to result in high portfolio turnover on an annual basis.

Under normal circumstances, the Fund will invest at least 80% of the value of its net assets, plus borrowings for investment purposes, in equity securities exhibiting high quality characteristics as selected via the Fund’s Equity Strategy or options contracts that provide exposure to those securities. The Fund considers a security to be a “U.S. equity security” if it is listed on a U.S. exchange and (i) the issuer is incorporated or organized under the laws of the United States or (ii) the issuer derives at least 50% of its revenues or profits from goods produced or sold, investments made, or services performed, or has at least 50% of its assets located within the United States. For purposes of compliance with this investment policy, derivative contracts will be valued at their notional value.