° The manager of the
Fund has contractually agreed through February 28, 2015 to cap the Fund’s annual operating expenses at .95% (exclusive of 12b-1 fees and certain other fees). This expense cap may not be terminated prior to
February 28, 2015 without the approval of the Fund's Board of Trustees.
° The distributor of the Fund has
contractually agreed through February 28, 2015 to limit the Fund’s Class A distribution and service (12b-1) fees to .25% of the Fund’s Class A average daily net assets. This waiver may not be terminated
prior to February 28, 2015 without the approval of the Fund’s Board of Trustees.
INVESTMENTS, RISKS AND
PERFORMANCE
Principal Investment Strategies.
We seek investments that will appreciate over time. We also try to reduce the taxes shareholders may pay on the Fund’s investment income and capital gains. We normally invest at
least 80% of the Fund’s investable assets in equity and equity-related securities of large capitalization U.S. companies. The term “investable assets” refers to the Fund’s net assets plus any
borrowings for investment purposes. The Fund’s investable assets will be less than its total assets to the extent that it has borrowed money for non-investment purposes, such as to meet anticipated
redemptions.
Quantitative Management Associates
LLC (QMA) employs a quantitatively driven, bottom-up investment process. The stock selection process utilizes an adaptive model that evaluates stocks differently based on their growth expectations. QMA constructs
portfolios that seek to maximize the Fund’s investment in the most attractive stocks identified by the model, subject to risk constraints.
We try to limit taxes by avoiding
short-term capital gains whenever possible. We also may sell securities that have fallen in value in order to generate losses that can be used to offset current and future capital gains on other securities, while, at
the same time, improve the risk/return profile of the portfolio.
The Fund’s objective is to
outperform the returns of the S&P 500 Index on an after-tax basis over the long term. While we make every effort to achieve our objective, we can’t guarantee success.
Principal Risks of Investing in the
Fund.
All investments have risks to some degree. Please remember that an investment in the Fund is not guaranteed to achieve its investment objective; is not a deposit with a bank; is not
insured, endorsed or guaranteed by the Federal Deposit Insurance Corporation or any other government agency; and is subject to investment risks, including possible loss of your original investment.
Equity and Equity-Related Securities
Risks.
The value of a particular security could go down and you could lose money. In addition to an individual security losing value, the value of the equity markets or a sector in which the Fund
invests could go down. The Fund's holdings can vary significantly from broad market indexes and the performance of the Fund can deviate from the performance of these indexes. Different parts of a market can react
differently to adverse issuer, market, regulatory, political and economic developments.
The Fund may invest in companies
that reinvest their earnings rather than distribute them to shareholders. To the extent the Fund does invest in such companies, the Fund is not likely to receive significant dividend income on its portfolio
securities.
Large Capitalization Company
Risk.
Companies with large market capitalizations go in and out of favor based on market and economic conditions. Larger companies tend to be less volatile than companies with smaller market
capitalizations. In exchange for this potentially lower risk, the Fund's value may not rise or fall as much as the value of funds that emphasize companies with smaller market capitalizations.
Model Design Risk.
The design of the underlying models may be flawed or incomplete. For example, QMA’s quantitative strategies do not utilize detailed fundamental analyses of the securities considered
for purchase. The investment models used by QMA are based on historical and theoretical underpinnings that QMA believes are sound. There can be no guarantee, however, that these underpinnings will correlate with
security price behavior in the manner assumed by the models. Additionally, the quantitative techniques that underlie QMA's portfolio construction processes may fail to fully anticipate important risks.
Model Implementation Risk.
While QMA strives to mitigate the likelihood of material implementation errors, it is impossible to completely eliminate the risk of error in the implementation of the computer models that
guide QMA's quantitative investment processes. Additionally, it may be difficult to implement model recommendations in volatile and rapidly changing market conditions.
Market Events.
The global financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities and unprecedented volatility in the markets. In response to
the crisis, the U.S. government and the Federal Reserve, as well as certain foreign governments and their central banks have taken steps to support financial markets,