Click here to view the fund's statutory
prospectus
or
statement of additional information
March 1, 2014, as supplemented through April 3, 2014
American Independence Boyd Watterson
Short-Term Enhanced Bond Fund
(Formerly the American Independence Strategic Income Fund)
Institutional
| ISBSX | 026762302
Class A
| ISTSX | 026762401
The Fund’s statutory Prospectus and Statement of Additional Information dated March 1, 2014, as supplemented through April 3, 2014, are incorporated into and made part of this Summary Prospectus by reference. Before you invest, you may want to review the Fund’s Prospectus, which contains more information about the Fund and its risks. You can find the Fund’s Prospectus and other information about the Fund online at
www.aifunds.com
. You can also get this information at no cost by calling 866-410-2006 or by sending an e-mail request to info@americanindependence.com.
The Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal o
ff
ense.
Not FDIC Insured
•
May Lose Value
•
No Bank Guarantee
American Independence
Boyd Watterson Short-Term Enhanced Bond Fund (formerly known as the American Independence Strategic Income Fund)
FUND SUMMARY – AMERICAN INDEPENDENCE BOYD WATTERSON SHORT-TERM ENHANCED BOND FUND
Investment Objective.
The Boyd Watterson Short-Term Enhanced Bond Fund’s (the “Fund”) investment objective is to provide investors with as high a level of current income as is consistent with liquidity and safety of principal by investing primarily in investment-grade bonds with maturities of 1-3 years.
Fees and Expenses of the Fund.
This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.
You may qualify for sales charge discounts on purchases of Class A shares if you and your family invest, or agree to invest in the future, at least $100,000 in the Fund. More information about these and other discounts is available from your financial professional and in “Investing With The Funds” starting on page 64 of the Fund’s Prospectus.
|
Institutional Class Shares
|
Class A Shares
|
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)
|
None
|
2.25%
|
Maximum Deferred Sales Charge (Load) (as a percentage of the Net Asset Value purchase)
|
None
|
None
|
|
|
|
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
Management Fee
|
0.40%
|
0.40%
|
Distribution and Service (12b-1) Fees
|
None
|
0.25%
(1)
|
Other Expenses
|
0.35%
|
0.35%
|
Total Annual Fund Operating Expenses
|
0.75%
|
1.00%
|
Fee Waivers and Expense Reimbursements
(2)
|
-0.30%
|
-0.30%
|
Net Annual Fund Operating Expenses After Fee Waivers and Expense Reimbursements
(2)
|
0.45%
|
0.70%
|
(1)
The Board of Trustees (the “Board”) has approved a Rule 12b-1 plan with a 0.25% distribution fee for Class A shares. In addition, the Board has approved a Shareholder Services Plan for Class A shares which would provide for a fee paid monthly at an annual rate of up to 0.25%. At the present time, the Fund is assessing the full 0.25% distribution fee and is not assessing the shareholder servicing fee.
(2)
American Independence Financial Services, LLC (“American Independence” or the “Adviser”) has contractually agreed to reduce the management fee and reimburse expenses until March 1, 2015 in order to keep the Total Annual Fund Operating Expenses at 0.45% and 0.70% of the Fund’s average net assets for the Institutional Class shares and Class A shares, respectively. The Adviser is permitted to seek reimbursement from the Fund, subject to limitations, for fees it waived and Fund expenses it paid in any fiscal year of the Fund over the following three fiscal years, as long as the reimbursement does not cause the Fund’s operating expenses to exceed the expense limitation. The expense limitation may be terminated only by approval of the Board.
Example
This
Example is intended to help you compare the cost of investing in the Fund with
the cost of investing in other mutual funds.
The
Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that
the Fund’s operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
|
1 Year
|
3 Year
|
5 Year
|
10 Year
|
Institutional
Class Shares
|
$46
|
$210
|
$387
|
$902
|
Class
A Shares
|
$295
|
$507
|
$736
|
$1,395
|
Portfolio Turnover
The Fund pays
transaction costs, such as commissions, when it buys and sells securities (or
"turns over" its portfolio). A higher portfolio turnover
rate may indicate higher transaction costs and may result in higher taxes when
Fund shares are held in a taxable account. These costs, which are
not reflected in the annual fund operating expenses or in the Example, affect
the Fund's performance. During the most recent fiscal year ended, October
31, 2013, the Fund’s portfolio turnover rate was 57% of the average value of
its portfolio.
Principal Investment
Strategies, Risks and Performance.
Principal
Strategies.
Under
normal market conditions, the Fund intends to invest at least 80% of its net
assets, plus borrowings for investment purposes, in fixed income securities and
maintain an average dollar weighted duration between 1 and 3 years. The Fund
may invest more than 25% of its total assets in the banking and finance
industry. For purposes of this limitation, the banking and finance industry is
deemed to include securities of issuers engaged in banking or finance
businesses, including issuers of asset- and mortgage-backed securities. Under
normal market conditions, the Fund intends to limit its net assets in certain
investments as follows:
Ø
No more than 25% in
high-yield securities (commonly referred to as “junk bonds”);
Ø
No more than 20% in
non-U.S. dollar denominated securities of foreign entities;
Ø
No more than 10% in each
of the following:
o
Exchange Traded Funds
(“ETFs”);
o
Collateralized Debt
Obligations (“CDOs”), including Collateralized Loan Obligations (“CLOs”) and
Collateralized Bond Obligations (“CBOs”); and
Ø
No more than 5% in
each of the following:
o
Convertible
securities;
o
Preferred securities.
Main
types of securities in which the Fund may invest:
Ø
Asset-backed securities
Ø
Corporate debt instruments
Ø
Derivative instruments
(consisting of exchange-traded U.S. government bond futures, options and
interest rate swaps)
Ø
Foreign debt instruments
Ø
Mortgage-backed
securities
Ø
High yield securities
(commonly known as “junk bonds”)
Ø
Other investment companies,
including ETFs; to the extent the Fund invests in ETFs and other investment
companies the Fund will bear the proportionate share of the underlying expenses
of the ETF and other investment company
Ø
U.S. government and agency
securities
Ø
CDOs,
including CLOs and CBOs
Ø
Convertible securities
Ø
Preferred securities
Principal Risks.
Before investing in the Fund, you should carefully consider your own
investment goals, the amount of time you are willing to leave your money
invested and the level of risk you are willing to take. Investments in the Fund
are not deposits or obligations of, or guaranteed or endorsed by, any bank and
are not insured or guaranteed by the Federal Deposit Insurance Corporation, the
Federal Reserve Board or any other government agency. You could lose money by
investing in the Fund. The Fund is
subject to management risk and may not achieve its objective if the Adviser’s
expectations regarding particular securities or markets are not met. A summary
of the principal risks of investing in the Fund can be found below:
Fixed-Income Securities Risk
. Fixed-income securities are subject
to the risk of the issuer’s inability to meet principal and interest payments
on its obligations (i.e., credit risk) and are subject to price volatility
resulting from, among other things, interest rate sensitivity, market
perception of the creditworthiness of the issuer and general market liquidity
(i.e., market risk). Generally fixed-income securities will decrease in value
if interest rates rise and will increase in value if interest rates decline.
Securities with longer durations are likely to be more sensitive to changes in
interest rates, generally making them more volatile than securities with
shorter durations. Lower rated fixed-income securities have greater volatility
because there is less certainty that principal and interest payments will be
made as scheduled.
Interest Rate and
Duration Risk
. The
Fund's share price and total return will vary in response to changes in
interest rates. If rates increase, the value of the Fund's
investments generally will decline, as will the value of your investment in the
Fund. Longer-term securities are subject to greater interest rate risk.
Duration is a measure of the sensitivity of a security's price to changes in
interest rates. The longer a security's duration, the more sensitive it will be
to changes in interest rates. Similarly, a fund with longer average fund
duration will be more sensitive to changes in interest rates and will
experience more price volatility than a fund with shorter average fund
duration.
Credit Risk
.
The
issuer of a fixed income security may not be able to make interest and
principal payments when due. Generally, the lower the credit rating
of a security, the greater the risk that the issuer will default on its
obligation, which could result in a loss to the Fund.
Asset- and Mortgage-Backed Securities Risk
. Mortgage-backed
securities (“MBS”) (residential and commercial) and asset-backed securities
represent interests in “pools” of mortgages or other assets, including consumer
loans or receivables held in trust. The characteristics of these MBS and
asset-backed securities differ from traditional fixed income securities. Like
traditional fixed income securities, the value of MBS or asset-backed
securities typically increases when interest rates fall and decreases when
interest rates rise. However, a main difference is that the principal on MBS or
asset-backed securities may normally be prepaid at any time, which will reduce
the yield and market value of these securities. Therefore, MBS and asset-backed
backed securities are subject to prepayment risk and extension risk. Because of
prepayment risk and extension risk, MBS react differently to changes in
interest rates than other fixed income securities. Asset-backed securities
entail certain risks not presented by MBS, including the risk that in certain
states it may be difficult to perfect the liens securing the collateral backing
certain asset-backed securities. In addition, certain asset-backed securities
are based on loans that are unsecured, which means that there is no collateral
to seize if the underlying borrower defaults.
Prepayment
Risk
.
Prepayment occurs
when the issuer of a security can repay principal prior to the security’s
maturity. Securities subject to prepayment can offer less potential for gains
during a declining interest rate environment and similar or greater potential
for loss in a rising interest rate environment. In addition, the potential
impact of prepayment features on the price of a debt security can be difficult
to predict and result in greater volatility. This risk could affect the total
return of the Fund.
U.S. Government
Obligations Risk
.
U.S. government securities are subject to
market and interest rate risk, as well as varying degrees of credit risk. Some
U.S. government securities are issued or guaranteed by the U.S. Treasury and
are supported by the full faith and credit of the United States. Other types of
U.S. government securities are supported by the full faith and credit of the
United States (but not issued by the U.S. Treasury). These securities may have
less credit risk than U.S. government securities not supported by the full
faith and credit of the United States. With respect to U.S. government
securities that are not backed by the full faith and credit of the U.S.
Government, there is the risk that the U.S. Government will not provide
financial support to such U.S. government agencies, instrumentalities or
sponsored enterprises if it is not obligated to do so by law.
High Yield Securities Risk
.
Lower rated securities
are subject to greater risk of loss of income and principal than higher rated
securities and may have a higher incidence of default than higher-rated
securities. The prices of lower rated securities are likely to be more
sensitive to adverse economic changes or individual corporate developments than
higher rated securities. High yield securities are commonly referred to as
“junk bonds” and are considered to be speculative.
Emerging Markets Risk
.
The Fund may invest
in foreign securities that may include securities of companies located in
developing or emerging markets, which entail additional risks, including: less
social, political and economic stability; smaller securities markets and lower
trading volume, which may result in less liquidity and greater price
volatility; national policies that may restrict securities investment
opportunities, including restrictions on investments in issuers or industries,
or expropriation or confiscation of assets or property; and less developed
legal structures governing private or foreign investment.
Foreign Securities
Risk
.
To the
extent the Fund invests in foreign securities, such investments are subject to
additional risks including political and economic risks, greater volatility,
civil conflicts and war, currency fluctuations, expropriation and
nationalization risk, higher transaction costs, delayed settlement, possible
foreign controls on investment, and less stringent investor protection and
disclosure standards of foreign markets.
Political Risk
.
A greater potential
for revolts, and the expropriation of assets by governments exists when
investing in securities of foreign countries.
Foreign Currency Risk
.
Investments in
foreign currencies are subject to the risk that those currencies will decline
in value relative to the U.S. dollar, or, in the case of hedged positions, that
the U.S. dollar will decline relative to the currency being hedged. When the
U.S. dollar strengthens relative to a foreign currency, the U.S. dollar value
of an investment denominated in that currency will typically fall. Currency
rates in foreign countries may fluctuate significantly over short periods of
time.
Convertible Securities Risk
. The value of
convertible securities tends to decline as interest rates rise and, because of
the conversion feature, tends to vary with fluctuations in the market value of
the underlying securities.
Preferred Securities Risk
. Preferred securities may pay fixed or
adjustable rates of return. Preferred securities are subject to issuer-specific
and market risks applicable generally to equity securities. In addition, a
company’s preferred securities generally pay dividends only after the company
makes required payments to holders of its bonds and other debt. For this
reason, the value of preferred securities will usually react more strongly than
bonds and other debt to actual or perceived changes in the company’s financial
condition or prospects. Preferred securities of smaller companies may be more
vulnerable to adverse developments than preferred stock of larger companies.
CDOs Risk
. CDOs are types of
asset-backed securities. The risks of an investment in a CDO depend largely on the
type of the collateral securities and the class of the CDO in which the Fund
invests. Normally, CLOs, CBOs and other CDOs are privately offered and sold,
and thus, are not registered under
the securities laws.
As a result, investments in CDOs may be characterized by the Fund as illiquid
securities; however, an active dealer market may exist for CDOs allowing a CDO
to qualify for Rule 144A transactions. In addition to the normal risks
associated with fixed income securities discussed elsewhere in this Prospectus
(e.g., interest rate risk and default risk), CDOs carry additional risks
including, but are not limited to: (i) the possibility that distributions
from collateral securities will not be adequate to make interest or other
payments; (ii) the quality of the collateral may decline in value or
default; (iii) the Fund may invest in CDOs that are subordinate to other
classes; and (iv) the complex structure of the security may not be fully
understood at the time of investment and may produce disputes with the issuer
or unexpected investment results. Holders of CLOs bear risks of the underlying
investments, index or reference obligation and are subject to counterparty
risk.
Counterparty Risk
. The risk that counterparty
to a financial instrument entered into by the Fund or held by special purpose
or structured vehicle becomes bankrupt or otherwise fails to perform its
obligations due to financial difficulties. The Fund may experience significant
delays in obtaining any recovery in a bankruptcy or other reorganization
proceeding. The Fund may obtain only limited recovery or may obtain no recovery
in such circumstances. The Fund will typically enter into financial instrument
transactions with counterparties whose credit rating is investment grade, or,
if unrated, determined to be of comparable quality by the investment manager.
ETF and other Investment Company ETF Risk
. The following are
various types of risks to which the Fund is subject to based on certain types
of ETFs, closed-end funds and other investment companies it may invest in.
General ETF Risk
. The cost to a
shareholder of investing in the Fund may be higher than the cost of investing
directly in ETF shares and may be higher than other mutual funds that invest
directly in the related securities.
Shareholders
will
indirectly bear
the proportionate
fees and expenses charged
by the mutual fund or ETFs in addition to the Fund’s direct fees and expenses.
Tracking Error Risk
.
ETFs
typically trade on securities exchanges and their shares may, at times, trade
at a premium or discount to their net asset values. In addition, an ETF may not
replicate exactly the performance of the benchmark index it seeks to track for
a number of reasons, including transaction costs incurred by the ETF, the
temporary unavailability of certain index securities in the secondary market or
discrepancies between the ETF and the index with respect to the weighting of
securities or the number of securities held.
Derivatives Risk
.
Derivatives
may be riskier than other types of investments and may increase the volatility
of the Fund. Derivatives may be more sensitive to changes in economic or market
conditions than other types of investments and could result in losses that
significantly exceed the Fund’s original investment. Many derivatives create
leverage thereby causing the Fund to be more volatile than it would be if it
had not used derivatives. Derivatives expose the Fund to counterparty risk,
which is the risk that the derivative counterparty will not fulfill its
contractual obligations (and includes credit risk associated with the
counterparty). When used for hedging, the change in value of a derivative may
not correlate as expected with the security or other risk being hedged. In
addition, derivatives expose the Fund to risks of mispricing or improper
valuation.
Concentration Risk.
The Fund invests more
than 25% of its total assets in the securities of issuers in the banking and finance
industry and is therefore exposed to the risk that factors affecting that
industry will have a greater effect on the Fund than they would if the Fund
invested in a diversified number of unrelated industries. These risks generally
include interest rate risk, credit risk and risk associated with regulatory
changes in the banking industry. The profitability of banks depends largely on
the availability and cost of funds, which can change depending on economic
conditions.
Non-Diversified Fund
Risk
.
The Fund is “non-diversified” under the 1940 Act
and therefore is not required to meet certain diversification requirements
under federal laws. The Fund may invest a greater percentage of its assets in
the securities of an issuer. However, a decline in the value of a single
investment could cause the Fund’s overall value to decline to a greater degree
than if the Fund held a more diversified portfolio.
Past
Performance.
The
bar chart and the table listed below give some indication of the risks of an
investment in the Fund (and its predecessor) by showing changes in the Fund’s
performance from year to year and by showing how the Fund’s average annual
returns for the 1-, 5- and 10-year periods compare with those of the Fund’s
benchmark, the Barclays Government/Credit 1-3 Year Index. Prior to November 15,
2013, the Fund’s benchmark was the Barclays Capital 1-3 Year Aggregate Bond
Index. The benchmark changed to match the investment objective and investment
strategy of the new Sub-Adviser. The Fund has been in existence since January
21, 1997, but until March 2, 2006, the Fund was organized as the Ultra Short
Bond Fund of the former American Independence Funds Trust. From March 2, 2006
through December 26, 2011, the Fund was known as the American Independence Short-Term
Bond Fund. From December 27, 2011 through November 14, 2013, the Fund was known
as the American Independence Strategic Income Fund.
Past performance
(before and after taxes) does not indicate how a Fund will perform in the
future.
The returns in the
bar chart below are for the Institutional Class and do not include s
ales loads or account fees; if such amounts were reflected,
returns would be less than those shown. Returns for Class A shares
will
differ because of differences in the expenses of each class.
Updated performance
figures are available on the Fund’s website at
www.aifunds.com
or by calling the Fund at
1-888-266-8787. The Fund’s 30-day yield may be obtained by calling
1-888-266-8787.
Best
quarter:
|
2.24%
|
Q4 2007
|
Worst
quarter:
|
(1.58)%
|
Q2 2008
|
AVERAGE ANNUAL
TOTAL RETURNS
For the Period
Ended December 31, 2013
|
|
1 Year
|
5 Years
|
10 Years
|
Institutional
Class Shares
|
|
|
|
|
Return Before
Taxes
|
0.25%
|
2.15%
|
2.45%
|
|
Return After Taxes
on Distributions
|
-0.37%
|
1.57%
|
1.56%
|
|
Return After Taxes
on Distributions and sale of shares
|
0.14%
|
1.44%
|
1.57%
|
|
Class A Shares
(Return Before Taxes)
|
-2.21%
|
1.45%
|
2.00%
|
|
Barclays
Government/Credit 1-3 Year Index (reflects no deduction for fees, expenses or
taxes)
|
0.64%
|
2.02%
|
2.91%
|
|
Barclays Capital
1-3 Year U.S. Aggregate Bond Index (reflects no deduction for fees, expenses
or taxes)
|
0.53%
|
2.25%
|
3.01%
|
|
|
|
|
|
|
After-tax
returns are calculated using the historical highest individual federal marginal
income tax rates and do not reflect the impact of state and local taxes. Actual
after-tax returns depend on the investor’s tax situation and may differ from
those shown. After-tax returns shown are not relevant to investors who hold
Fund shares through tax-deferred arrangements such as 401(k) plans or
individual retirement accounts.
Returns for Class A shares
reflect the deduction of the sales load. After-tax returns for Class A shares,
which are not shown, will vary from those shown for Institutional Class shares.
Management.
Investment Advisers.
The Adviser for the
Fund is American Independence Financial Services, LLC.
The Sub-Adviser for
the Fund is
Boyd
Watterson Asset Management, LLC.
Portfolio Management.
Manager Name
|
Primary Title
|
Managed the Fund Since
|
David M. Dirk
|
Director of Portfolio Management and
Trading
|
2013
|
Gregory H. Cobb
|
Lead Strategist - Fixed Income
|
2013
|
Justin C.
Waggoner
|
Portfolio Manager
|
2013
|
Brian A.
Convery
|
Portfolio
Manager/Credit Research
|
2013
|
G. David
Hollins
|
Director of Credit
Research
|
2013
|
Purchase and Sale Information.
Purchase minimums
|
Institutional Class
Shares
|
Class A Shares
|
Class C Shares
|
Initial
Purchase
|
$3,000,000
|
$5,000
|
$5,000
|
Subsequent
Purchases
|
$5,000
|
$250
|
$250
|
How to purchase and redeem shares
·
Through
Matrix Capital Group, Inc. (the “Distributor”)
·
Through
banks, brokers and other investment representatives
·
Through
retirement plan administrators and record keepers
·
Purchases
: by completing an
application and sending a check to the Fund at the address below (an
application can be obtained through the Fund’s website at www.aifunds.com or by
calling 1-888-266-8787).
·
Redemptions
: by calling
1-888-266-8787 or by writing to the Fund at the address below:
American
Independence Funds
|
P.O.
Box 8045
|
Boston,
MA 02266-8045
|
Tax Information.
The Fund intends to make distributions that may be taxed as ordinary income or capital gains, except when your investment is in an IRA, 401(k) plan or other tax-advantaged investment plan.
Financial Intermediary Compensation.
If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s Web site for more information.