The Fund is an actively managed exchange-traded fund (“ETF”). Under normal market conditions, the Fund invests at least 80% of its assets (defined as net assets plus the amount of any borrowing for investment purposes) in municipal instruments the interest from which is exempt from regular federal income tax. This policy is a fundamental policy of the Fund and may not be changed without approval of a majority of the Fund’s outstanding securities, as defined in the Investment Company Act of 1940, as amended. The Fund may invest without limit in municipal instruments the interest from which is subject to the Federal alternative minimum tax (“AMT”). Municipal instruments are debt instruments issued by or on behalf of a qualifying issuer, such as states, municipalities, territories, or possessions of the United States and the District of Columbia and their political subdivisions, agencies, authorities, or instrumentalities, to raise money for a variety of public and private purposes, including general financing for state and local governments, or financing for a specific project or public facility that pay interest that is exempt from federal income tax (except that the interest may be includable in taxable income for purposes of the Federal AMT). For purposes of the Fund’s 80% investment policy, eligible municipal instruments include, but are not limited to: municipal notes and bonds, general obligation bonds, special revenue bonds, private activity bonds, industrial development bonds, lease obligations, certificates of participation, short-term obligations, variable rate demand notes, and tax-exempt commercial paper, including securities subject to AMT.

The Fund’s investments in derivatives will be counted toward the Fund’s 80% policy to the extent that they provide investment exposure to municipal instruments within that policy or to one or more market risk factors associated with such investments. The Fund may invest in pooled investment vehicles, including ETFs, in order to seek exposure to municipal instruments, which will count towards the Fund’s 80% investment policy.

The Fund may also invest up to 20% of its assets in other debt and fixed income investments, including:

While the Fund invests primarily in investment grade municipal instruments, it may also invest in instruments of any credit quality, including below-investment-grade municipal instruments. The Fund intends to limit its investments in below-investment grade municipal instruments to no more than 10% of the Fund’s total assets. Investment-grade securities are those rated at the time of purchase in one of the top four highest rating categories by at least one Nationally Recognized Statistical Rating Organization (NRSRO) or deemed of comparable quality by the Fund’s investment adviser. The Fund typically invests in municipal instruments in a variety of economic sectors.

The Fund may invest in municipal instruments of any maturity and expects to maintain an average duration between 70% and 130% of the Fund’s benchmark, the Bloomberg U.S. Municipal Index (the “Index”). The Index is sponsored by Bloomberg L.P., which is independent of the Fund and Sterling Capital. 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.

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.

The Fund’s portfolio managers 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.

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

The Fund may purchase or sell derivative instruments (such as residual interest bonds, futures contracts, including Treasury futures, options, interest rate swaps, and forward rate contracts) for hedging purposes, to seek total return or as a substitute for the purchase or sale of securities.

The Fund may engage in frequent trading of investments at the discretion of the Fund’s portfolio managers, based on their assessment of market conditions, asset valuations, and credit risk dynamics.