The AlphaMark Fund invests in primarily in a portfolio of exchange traded funds (“Underlying ETFs”) and individual equity securities that are a direct or indirect investment in large cap companies represented in the S&P 500 Index. “Large cap” companies are defined as companies with a total market capitalization of $5 billion or more at the time of purchase. Underlying ETFs primarily track the individual sectors represented in the S&P 500 Index. The Advisor seeks to invest in Underlying ETFs or individual equity securities that it believes represent the best risk-adjusted investment options. ETFs offer diversification and, therefore, reduce the inherent volatility of individual stock selections. The Fund may also invest directly in common stock, securities issued by foreign companies that are listed on a U.S. exchange, including sponsored American depositary receipts (“ADRs’), options on individual stocks, ETFs on an index during times of volatility while waiting for stock prices to become more reasonable and to generate income on stock positions that the Advisor believes are becoming overvalued.
The Advisor continually monitors global market conditions and the valuation of specific styles to determine the allocations of the holdings in the Fund utilizing valuation metrics, such as price to earnings ratios, price to sales ratios, and price to book ratios of companies in various sectors relative to historic trends, as well as the relative performance of such sectors, to determine whether a sector is overvalued or undervalued. When the advisor determines that a particular sector or other segment of the equity market is exhibiting conditions of becoming overvalued, the Advisor may reduce the allocation in the sector and conversely increase the allocation in other sectors that exhibit a more compelling value proposition.
Individual stocks may be sold for the following reasons; a material change in the company’s structure of management; a material change in the industry, sector, or economic factors affecting that industry; a position has double in weight; analysts’ estimates of future earning of the company have decreased by more than 5%; the price has become overvalues by 20% of more based on the Advisor’s proprietary cash flow models; or to take advantage of price swings caused by market volatility or events due to the foregoing circumstances.
The Fund seeks long term growth of capital.
The Fund will invest primarily in a diversified portfolio of exchange traded funds (“Underlying ETFs”) and individual equity securities that are a direct or indirect investment in large cap companies represented in the S&P 500 Index. The Fund seeks high quality growth companies experiencing earnings momentum valued at a level that justifies their price.
Important Risk Considerations
The Fund invests primarily in ETFs and the stock market. ETFs are subject to investment advisory fees and other expenses, which will be indirectly paid by the Fund resulting in your cost of investing in the Fund to be higher than investing directly in the same ETFs yourself. Each ETF is subject to specific risks. The stock market risk includes the return on and value of an investment will fluctuate in response to stock market movements and stocks are subject to market risks such as rapid increase or decrease in a stock’s value or liquidity along with other factors beyond the control of the Advisor. Large capitalization companies may be unable to respond as quickly as smaller companies to new competition challenges and also may not be able to attain the high growth rate of successful smaller companies. The Fund’s investments in foreign securities involve risks that may be different from those of U.S. securities. Foreign securities may not be subject to uniform audit and financial reporting and disclosure standards. In addition, the Fund’s foreign investments may be subject to adverse changes in investment or exchange control regulations, expropriation or confiscatory taxation, political or social instability, and nationalization of companies or industries. For additional information on these and other risks, please read the current prospectus.
*The Advisor has contractually agreed, until December 31, 2022, to reduce the management fees and to absorb the Funds operating expenses to the extent necessary to limit Annual Fund Operating Expenses (excluding Acquired Fund Fees and Expenses) to an amount not exceeding Net: 1.57%, Gross: 2.30%, of the Fund’s average daily net assets. Management fee reductions and expenses absorbed by the Advisor are subject to repayment by the Fund for a period of 3 years after such fees and expenses were incurred.
S&P 500 Index is the Standard & Poor’s composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices.
Price/Book Ratio: A valuation measure that compares a stock’s market price to its book value, i.e., the company’s new worth divided by the number of outstanding shares.
Price/Earnings (P/E) Ratio: The price-to-earnings ratio shows the “multiple” of earnings at which a stock is selling. The P/E ratio is calculated by dividing a stock’s current price by its current earnings per share. A high multiple means that investors are optimistic about futire growth and have bid up the stock’s price.
Price/Sales Ratio: Price to sales is calculated by dividing a stock’s currrent price by its projected revenue per share for the currnet fiscal year. A smaller multiple (less than 1.0) means that investors are paying less for each unit of sales.
Mutual Fund investing involves risk, principal loss is possible. An investor should consider the investment objectives, risks, charges and expenses of the funds carefully before investing. To obtain a prospectus, which contains this and other information, click on the prospectus link or contact AlphaMark Funds by calling 866-422-3350. Please read the prospectus carefully before investing. The AlphaMark Funds are distributed by Ultimus Fund Distributors, LLC.