Investors should note the following risks associated with the Congressional Effect Fund:  The share price of the Fund changes daily based on the performance of the securities in which it invests.  The ability of the Fund to meet its investment objectives is directly related to the Advisor’s investment of the Fund’s assets.  The Fund’s principal investment strategy and investment methodology is based on the Congressional Effect, but this investment strategy and methodology has not yet been applied in practice.  The Advisor’s use of an investment strategy based on the Congressional Effect may be ineffective because the Congressional Effect may not produce expected results, either for short or long-term periods.  Moreover, the Fund cannot give any guarantee that the Congressional Effect observed during past periods will continue to be observed in the future.  Therefore, there is no guarantee that the Fund’s management style will produce the desired results, and the Fund may lose money.

 

While the Advisor periodically (at least daily) inquires as to whether each house of Congress is in session, the Advisor may not be able to make an accurate determination as to whether or not Congress is in session or intends to be in session at all times due to difficulties in obtaining legislative schedules, and unexpected or unannounced changes in such schedules.  Because the Fund’s investment strategy depends in large part on accurately determining when Congress is in session, inaccurate information about whether or not Congress is in session could negatively impact the performance of the Fund.

 

Because the Fund generally only expects to achieve capital appreciation during periods when Congress is out of session, the Fund may be susceptible to market timers who attempt to invest in the Fund immediately before Congress is in recess, and divest from the Fund immediately before Congress convenes.  Such market timing could present risks for other shareholders with long-term interests in the Fund, which may include, among other things, interference with the efficient management of the Fund’s portfolio, increased brokerage and administrative costs, forcing the Fund to hold excess levels of cash to meet redemption requests, and an increase in costs to shareholders due to a decrease in the Fund's asset base. Although the Fund has adopted certain policies and procedures intended to identify and to discourage frequent trading, including a redemption fee, it cannot ensure that all such activity can be identified or terminated.

 

Finally, the Fund will buy and sell portfolio securities in response to whether Congress is in session or out of session, without regard to the length of time they have been held.   The Advisor anticipates that the Fund will generally move substantially all of its portfolio from “in session” investments (Cash and Cash Equivalents) to “out of session” investments (S&P 500 futures contracts) and vice versa each time Congress changes its session status.  Since Congress’s in session status can change daily, the Fund’s portfolio will be changed rapidly (e.g., within a single trading day) a number of times during the year.  Since portfolio turnover involves paying brokerage commissions and other transaction costs, portfolio changes cause additional expenses for the Fund.  

 

However, the Advisor has entered into an Expense Limitation Agreement with the Fund under which it has agreed to reduce its fees and to assume other expenses of the Fund, if necessary, in an amount that limits the Fund’s annual operating expenses (exclusive of interest, taxes, brokerage fees and commissions, extraordinary expenses, payments, if any, under the Distribution Plan and Acquired Fund Fees and Expenses) through the fiscal year ending July 31, 2010.  As a result, the Fund’s “Total Annual Fund Operating Expenses” will be limited to 1.75% of average daily net assets of the Fund.  

WE CAREFULLY LIMIT AND CONTROL THE SHARING OF YOUR INFORMATION. In order to protect customer privacy, we carefully control the way in which any information about you is shared. It is our policy to not disclose any nonpublic personal information about you or former customers to anyone, except as permitted or required by law. We are permitted by law to disclose all of the information we collect as described above to our affiliates, Advisors, sub Advisors, transfer agents, broker-dealers, administrators or any firms that assist us in maintaining and supporting the financial products and services provided to you. For example, our transfer agents need information to process your transactions, and our outside vendors need information so that your account statements can be printed and mailed. However, these parties are not permitted to release, use or transfer your information to any other party for their own purpose.

 

WE ARE COMMITTED TO THE PRIVACY OF YOUR NONPUBLIC PERSONAL INFORMATION AND WILL USE STRICT SECURITY STANDARDS TO SAFEGUARD IT. We are committed to the security of your nonpublic personal information. Our employees and others hired to work for us are held accountable for adhering to strict policies and procedures to prevent any misuse of your nonpublic personal information. Employees are bound by this privacy policy and are educated on implementing our security principles and practices.

 

We maintain physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information. Our operational and data processing systems are in a secure environment that protects nonpublic personal information from being accessed inappropriately by third parties. This privacy policy explains how we handle nonpublic personal information; however, you should also review the privacy policies adopted by any of your financial intermediaries, such as a broker-dealer, bank, or trust company to understand how they protect your nonpublic personal information in accordance with our internal security standards.

 

This privacy policy notice is for the Congressional Effect Family of Funds (the “Trust”) and Congressional Effect Management, LLC the Trust's investment Advisor.

 

IF YOU HAVE ANY QUESTIONS ABOUT THE CONFIDENTIALITY OF YOUR CUSTOMER INFORMATION, CALL 888.553.4233 TO TALK TO A SHAREHOLDER SERVICES REPRESENTATIVE.