Kaizen Hedged Premium Spreads Fund
Manages option trading based on volatility environments
CAPTURES RETURN FROM SOPHISTICATED OPTIONS STRATEGIES
The Fund writes put options and call options with weekly and monthly expirations and collects a premium.
SPREAD POSITIONS RESPOND TO VOLATILITY ENVIRONMENT
The Fund manager establishes spread positions in light of the current volatility environment.
ASSESSES VOLATILITY WITH PROPRIETARY RESEARCH
The Fund employs a hedging strategy that responds to changing risk in the fund"s spread positions.
|PERFORMANCE (as of 6/30/2017)|
Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Returns for one year or less are cumulative. Investment return and principal value will fluctuate so that an investorâ€™s shares, when redeemed, may be worth more or less than original cost. For the most recent month end performance, please call 1-844-524-9366. Other share class performance may vary.
Minimum Investments Initial investment
For Class A and C shares: $2,500 For Class I shares: $10,000
Automatic Investment Plan: $100 Subsequent Investment: $500 ($1,000 for Class I shares)
Automatic Investment Plans: $100
Maximum Sales Charge
For Class A Shares: 5.50%
For Class C and I Shares: None
Maximum Deferred Sales Charge
For Class C Shares: 1.0% on shares sold within 12 months of purchase For Class A and I Shares: None
Expense Ratio (Gross)
Class I Shares: 1.60%
Expense Ratio (Net)
Class I Shares: 1.50%
*The Fund’s advisor has contractually agreed to waive its fees and/or operating expenses until April 30, 2018
The Fund will make distributions of net investment income annually and net capital gains (if any) typically in December. Distributable dividends and taxable capital gains are automatically reinvested in the Fund unless you request cash distributions on your application or through a written request to the Transfer Agent.
For Class A, C and I shares: 2.00% on shares sold within 30 days of purchase.
Fund Assets Under Management
$40.3 Million (as of 6/30/2017)
IMST Distributors, LLC.
August 3, 2015
A Dynamic Credit Spreads Strategy
Long-term risk-adjusted returns using options
A Systematic Based Approach That Manages Option
Trading Based on Volatility Environments
RESPONDING TO MARKET VOLATILITY
The proprietary Dynamic Credit Spreads Strategy attempts to adjust to market conditions,
and deliver competitive long-term returns from credit spreads across market cycles.
- Invests in options primarily on the major equity indexes.
- Returns are driven by the option writing premiums received.
Investment StrategyThe Dynamic Credit Spreads strategy responds to changes in market volatility to select and manage strike prices and credit spread positions. Credit spread positions will be the instruments that drive returns for the portfolio. The selection and management of the strike prices of the credit spreads are determined by the investment teamâ€™s assessment of the volatility environment.
Credit Spread and Hedging Scenarios
Avoiding steep losses helps to enhance long-term returns
A Hedging Strategy Designed to
Mitigate Risk and Enhance Returns
- Market ranges will vary with different volatility environments.
- The Fund’s positions will change based on Kaizen’s assessment of the volatility environment.
Hedging to Optimize Risk and ReturnThe Fund strategy writes (sells) put or call options on major equity indexes to enhance the risk/return profile of the Fund. Kaizen intends to use its hedging strategy primarily to mitigate losses relating to market declines.
Kaizen Advisory, LLC, an Illinois limited liability company formed in May 2014, acts as the investment advisor to the Fund. Kaizen is registered with the SEC and has approximately $187.4 million in assets under management as of June 30, 2017. Kaizenâ€™s services to the Fund include providing overall supervision of the investment management of the Fund.
Portfolio Managers for the Kaizen Hedged Premium Spreads Fund are Michael Thompson and D. Matthew Thompson, who are responsible for the day-to-day management of the Fundâ€™s portfolio.
INVESTING WITH OPTIONS
Call is an option contract giving the owner the right (but not the obligation) to buy a specified amount of an underlying security at a specified price within a specified time. Put is an option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time. Credit Spread entails the simultaneous purchase and sale of options of the same type (puts or calls) with respect to the same index and with the same expiration date, but at different exercise (â€œstrikeâ€) prices. Strike Price is the price at which a specific options contract can be exercised.
Index Option is an option providing exposure to the movement of the stock market. The CBOE Volatility IndexÂ® (VIXÂ®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. Since its introduction in 1993, VIX has been considered by many to be the world’s premier barometer of investor sentiment and market volatility. VIX Hedge: A declining market generally negatively affects the Fundâ€™s credit put spreads. To hedge against this, the Fund intends to purchase and sell call and put options or futures on the CBOE Volatility IndexÂ® (the â€œVIXÂ®â€) a benchmark for stock market volatility. The value of a VIXÂ® Hedge typically increases during sudden and extreme market declines. One cannot invest directly in an index.
IMPORTANT DISCLOSURE and RISKS
Before investing you should carefully consider the Fundâ€™s investment objectives, risks, charge s and expenses. This and other information is in the prospectus, a copy of which may be obtained by calling 1-844-524-9366. Please read the prospectus carefully before you invest.
An investment in the Fund is subject to risk, including the possible loss of principal. Fund risks include, but are not limited to, the following: The Fund may not fully benefit from or may lose money on an option if changes in its value do not correspond as anticipated to changes in the value of the underlying securities. If the Fund is not able to sell an option held in its portfolio, it would have to exercise the option to realize any profit and would incur transaction costs upon the purchase or sale of the underlying securities. Ownership of options involves the payment of premiums, which may adversely affect the Fundâ€™s performance. Derivatives transactions can be highly illiquid and difficult to unwind or value, and changes in the value of a derivative held by the Fund may not correlate with the value of the underlying instrument or the Fundâ€™s other investments. Using derivatives can have a leveraging effect and increase Fund volatility. In addition, the use of leverage may cause the Fund to liquidate portfolio positions when it would not be advantageous to do so in order to satisfy obligations.
Risks of futures contracts may arise from an imperfect correlation between movements in the price of the instruments and the price of the underlying securities. The Fundâ€™s use of futures contracts exposes the Fund to leverage risk because of the small margin requirements relative to the value of the futures contract. Hedging transactions involve risks different than those of underlying investments. In particular, the variable degree of correlation between price movements of hedging transactions and price movements in the position being hedged means that losses on the hedge may be greater than gains in the value of the Fundâ€™s positions, opportunities for gain may be limited or that there may be losses on both parts of a transaction.
The Fund is classified as â€œnon-diversified,â€ which means the Fund may invest a larger percentage of its assets in the securities of a smaller number of issuers than a diversified fund. Investment in securities of a limited number of issuers exposes the Fund to greater market risk and potential losses than if its assets were diversified among the securities of a greater number of issuers. Changes in the laws or regulations of the United States or other countries, including any changes to applicable tax laws and regulations, could impair the ability of the Fund to achieve its investment objective and could increase the operating expenses of the Fund. The Fund is newly organized and has no operating history. As a result, prospective investors have no track record or history on which to aabase their investment decisions.
Distributed by IMST Distributors, LLC.