Global Innovators Fund - gafunds.com · § Verifone, the electronic payment technology company, modestly beat earnings but margin expansion and revenue growth pressures still not

Forregisteredinvestmentprofessionaluseonly

GlobalInnovatorsFundReviewofthe4thQuarter2017

2Contents

§ Introductiontofund§ Marketperformance§ Summaryfundperformance§ Performancedriversandattribution§ Changestoportfolio§ Sectorallocation§ Geographicallocation§ Portfoliotodayandoutlook§ Portfoliocharacteristics§ Marketcommentary

3Portfoliomanagers

Source: GuinnessAtkinsonAssetManagement

MatthewPage,CFAPortfolioManager

• JoinedGuinnessAtkinsonAssetManagementin2005• PreviouslyworkedforGoldmanSachsasananalystinFixed

IncomeCurrenciesandCommodities(FICC)• GraduatedfromUniversityofOxford,withaMastersdegree

inPhysicsin2004• ManagerofDividendBuildersincelaunchin2012

DrIanMortimer,CFAPortfolioManager• JoinedGuinnessAtkinsonAssetManagementin2006• GraduatedfromUniversityofOxford,withaD.Phil.inPhysics

in2006• GraduatedfromUniversityCollegeLondon,Universityof

London,withaMastersdegreeinPhysicsin2003• ManagerDividendBuildersincelaunchin2012

Global Innovators

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

TimGuinness Manager

MatthewPage - - Analyst Manager

IanMortimer - - - - - - Analyst Manager

JoshuaCole - - - - - - - - - - - - - - Analyst

SagarThanki - - - - - - - - - - - - - - Analyst

4Analystteam

JoshuaColeAnalyst• JoinedGuinnessAtkinsonAssetManagementin2017• PreviouslyworkedatCastleTrust,aspecialistfinance

firmintheCityofLondonasaquantitativeanalyst• GraduatedfromUniversityofBristolin2013witha

Master’sdegreeinMechanicalEngineering.In2016,JoshuapassedLevelIIoftheCFAProgram.

SagarThankiAnalyst• JoinedGuinnessAtkinsonAssetManagementin2017• PreviouslyworkedforBloombergasanequityspecialist,

withinFinancialAnalyticsandSales• GraduatedfromUniversityofCambridge,withaMaster’s

degreeinEconomics,andhassincecompletedLevelIoftheCFAProgram.


5Whydowelookforinnovativecompanies?

§ Webelieveitisasuperiorwaytoidentifygoodgrowthcompanies

§ Basedonourexperience,traditionalmethodologiesdonotwork

§ Historicgrowthisapoorpredictoroffuturegrowth

§ Analystforecastsofgrowthratesareunreliableatbest

§ Insteadtrytofindcompaniesdoingsomethinginnovative…whichwebelieve,ifsuccessful,shouldleadtohigherreturnoncapitalandhigherprobabilityoffuturegrowth


6GlobalInnovatorsphilosophy

Conviction

TheFundtypicallyhas30equallyweightedpositions

Wetargetalowturnoverwithaverageof3– 5yearinvestmenthorizon

Innovation

Weuseinnovationasalenstoidentifygoodgrowthcompanies

Webelieveinnovativecompaniesshouldbeabletogenerateahighreturnoncapitalinthefuture

Growth

Welookforcompaniesthatcangrowprofitably-notjustgrowthforgrowth’ssake

Welookforcompanieswithgoodmarginsthatdonotrequiresignificantexternalcapitaltogrow

Quality

Wefocusoncompaniesthatearnareturnoncapitalabovetheircostofcapitalandhavehistoricallygrowntheireconomicprofit

Weavoidhighlyleveragedcompanies

Thefundseeksaconcentratedportfolioofhighquality,innovative,growthcompanies


7Howdoweassessinnovation:Innovationmatrix

Disruptive Accelerating Continuous

Science/Technology

Scientificbreakthroughleadingtonewtechnologywithsignificantpotential

impact

Rapidimprovements inyoungtechnology

Smallcontinuousadvancesinanestablished

technologythatwillprovideincrementalbenefitstoenduser

Product/Service

Anew product/servicethathasthepotentialtoquicklytakemarketshareand

changethedynamicsofanindustry

Rapidadvancesinadoptionof

product/service

Smalladvancesinproduct/serviceorenduserexperience that

maintainsorgrowsmarketshareorcompetitive

positioning

BusinessModel

Anewrevenue/costmodelortheconfluenceoftechnologiesthathassignificantimpacton

incumbents

Rapidadoptionofbusinessmodelleadstorapid

growthinmarketshare

Continuous evolutionofbusinessmodeltomaintain

competitivestrength

LevelofinnovationKe

ydriverso

finno

vatio

n


8Howdoweidentifyinnovativecompanies?

topdownfocusonthethemes

bottomupfocusonthemetrics

GlobalInnovatorsUniversecandidatesforinclusioninthe


9

§ Anotherstrongquarter– MSCIWorldup5.62%(totalreturninUSD)– followingpositivereturnsinQ1,Q2,andQ3§ RegionalquarterlyperformancebroadlyfollowedYTDtrendswithstrongmarketsinAsiaex-JapanandEM.However,Japan

hadstrongestreturns(whichwerealsostronginlocalcurrencyterms),therewasbetterrelativeUSperformancethanseeninrestoftheyearandEuropeex-UKwasnoticeablyweaker.

§ WeakerUSdollarboostedreturnsofnon-USmarketsinUSDterms

Marketperformance- regions

Source: GuinnessAtkinsonAssetManagement,Bloomberg(dataasof12.31.2017)

10

§ IT,Materials,andConsumerDiscretionarysectorsleadingthepackagain,withEnergycontinuingitsrecoveryalongsideoilpricerises.

§ Telcos,HealthCare,andUtilitiesnoticeableunderperformers§ Startingtoseeamorepronounceddivergenceinsectorperformances§ Yeartodate:InformationTechnologystillsignificantoutperformer

Marketperformance- sectors


11

§ Growthcontinuedtooutperformvalue,butenergyrecoveryhelpedboostvalueperformanceinthequarter

§ ValuesignificantlyunderperforminggrowthYTD(delta=10.51%)

Marketperformance- styles

§ Marketcapnotasignificantdriverofperformanceoverthequarter,orYTD


12Performancevs.benchmark

Performancedataquotedrepresentspastperformanceanddoesnotguaranteefutureresults.Theinvestmentreturnandprincipalvalueofaninvestmentwillfluctuatesothataninvestor'sshares,whenredeemed,maybeworthmoreorlessthantheiroriginalcost.CurrentperformanceoftheFundsmaybelowerorhigherthantheperformancequoted.Totalreturnsreflectafeewaiverineffectandintheabsenceofthiswaiver,thetotal returnswouldbelower.Performancedatadoesnotreflectthe2%redemptionfeeforsharesheldlessthan30daysandifdeductedthefeewouldreducetheperformancequoted.Forperformancecurrenttothemostrecentmonthendpleasevisitwww.gafunds.com/our-funds orcall800-915-6565.

TheAdviserhascontractuallyagreedtoreimburseexpenses(excludingAcquiredFundFeesandExpenses,interest,taxes,dividendsonshortpositionandextraordinaryexpenses)inordertolimittheTotalAnnualOperatingExpensesforInstitutionalSharesandfortheInvestorClassto0.99%and1.24%respectivelythroughJune30,2018

PerformancedatashownforGlobalInnovators,InstitutionalClass(GINNX),priortoitslaunchdateon12.31.2015,usesperformancedatafromtheGlobalInnovators,InvestorClass(IWIRX).

Source: GuinnessAtkinsonAssetManagement,Bloomberg(12.31.2017)

1InvestorclassTicker:IWIRXInception12.15.1998Expenseratioasof5/3/17*1.24%(net);1.35%(gross)

2Institutionalclass Ticker:GINNXInception12.31.2015Expenseratioasof5/3/17*0.99%(net);1.38%(gross)

asof12.31.2017(inUSD)

YTD 1year 3yearsannualized

5yearsannualized

10yearsannualized

Sinceinceptionannualized

GlobalInnovators,InvestorClass1 34.75 34.75 12.68 18.53 9.29 8.24

GlobalInnovators,InstitutionalClass2 35.07 35.07 12.87 18.65 9.35 8.27

MSCIWorldIndex 23.10 23.10 9.91 12.30 5.68 6.00

13Fundperformance


Performancedataquotedrepresentspastperformanceanddoesnotguaranteefutureresults.Theinvestmentreturnandprincipalvalueofaninvestmentwillfluctuatesothataninvestor'sshares,whenredeemed,maybeworthmoreorlessthantheiroriginalcost.CurrentperformanceoftheFundsmaybe lowerorhigherthantheperformancequoted.Totalreturnsreflectafeewaiverineffectandintheabsenceofthiswaiver,thetotalreturnswouldbelower.Performancedatadoesnotreflectthe2%redemptionfeeforsharesheldlessthan30daysandifdeductedthefeewouldreducetheperformancequoted.Forperformancecurrenttothemostrecentmonthendpleasevisitwww.gafunds.com/our-funds orcall800-915-6565.

10.8

9%

11.8

2% 18.7

6%

21.1

7%

-45.

42%

45.2

0%

17.0

0%

-6.5

1%

19.9

1%

45.2

9%

12.5

5%

-3.0

4%

9.51

%

34.7

5%

15.2

8%

10.0

8% 20.7

0%

9.66

%

-40.

30%

30.8

7%

12.4

1%

-4.9

9%

16.5

6% 27.4

3%

5.58

%

-0.2

8%

8.19

%

23.1

0%

-50%-40%-30%-20%-10%

0%10%20%30%40%50%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Guinness Atkinson Global Innovators MSCI World Index

-50%0%

50%100%150%200%250%300%350%400%

Total return (USD)

14Performanceattributioncommentary

§ OverweightInformationTechnologyandunderweightHealthCarewerethelargestcontributorstopositiveperformanceintermsofassetallocationrelativetothebenchmarkinthequarter

§ UnderweightMaterialsandEnergysectorswereasmalldragonperformanceoverthequarter

§ Stockselectionwasgenerallypositive,butunderperformedrelativetobenchmarkinInformationTechnologysectorduetolackofexposuretosomemega-capstocks(e.g.Apple,Microsoft)thatarealargeweightinbenchmarkandperformedwellinthequarter


15Notableperformancedriversinquarter


§ WisdomTree,thespecialistETFprovider,isnowup~45%(TRinUSD)fromAugustlows.GoodperformanceinlargestETFproductsdrivingassetsundermanagementhigher.AcquisitionofGuggenheimETFbusinessbyInvescoannouncedinSeptemberathighvaluationmultiples alsoseenasshowingWisdomTree undervalued.

§ Intel reportedstrongthird-quarterresults.Broad-basedrevenuegrowthandoperatingmarginimprovementsalongsidebetterthanexpecteddatacenter revenue growth(7%year-on-year).

§ NikeaddressedmanyinvestorconcernsatanalystdayinOctober(productpipeline,inventorymanagement,competitiontobrand,distributionstrategy)highlightingabullishlong-termstrategyleadingtore-ratinginmultiple.

§ Fanuc,therobotmanufacturer,outperformedthestrongJapaneseequitymarketinthequarterasthecompanyhighlightedstrongdemand foritsproductsfromavarietyofsectors.

§ BoeingcontinuedstrongrecentperformanceasQ3reportedearningsexceededestimatesagain.Hasbeatearningsestimatesin7outof last8quarters.

§ Verifone,theelectronicpaymenttechnologycompany,modestlybeatearningsbutmarginexpansionandrevenuegrowthpressuresstillnotcomingthroughasfastasmarketwouldlike.Thisisreflectedinlowmultipleof~11.5Xforwardearnings.

§ CheckPoint stockfell12.5%ondayofQ3earningsrelease.EarningsbetterthanexpectedbutUSrevenuegrowthweaker.Beforeearningsreleasestockupover39%YTD,outperformingMSCIWorldby>20%.

Top5performingstocks Bottom5performingstocksTotalreturn

(inUSD)Totalreturn

(inUSD)

WisdomTreeInvestmentsInc 24.09% VeriFoneSystemsInc -12.67%IntelCorp 21.93% CheckPointSoftwareTechnologiesLtd -9.12%NIKEInc 21.04% SchlumbergerLtd* -8.10%FANUCCorp 18.78% SchneiderElectricSE -1.98%BoeingCo/The 16.64% CognizantTechnologySolutionsCorp -1.89%

*Soldorpurchasedintra-quarter

Holdingsaresubjecttochange.

16Changesmadeinthequarter


§ BuyAntaSports§ China-basedfootwearandapparelmanufacturerandtrader§ Verystrongcashflowreturnoninvestmentoverthelast15years§ Growththroughownbrandandadoptionofwesternbrandportfolios(e.g.Fila)§ Solidmargingrowth,andwellpositionedtobenefitfromthegrowingwealthinChina,andrecoveringeconomy,

andhasmaintainedlowdebtlevels

§ SellSchlumberger§ HeldinthefundsinceAugust2014§ Significantunderperformerrelativetofundfollowingoilpricedrop§ Lackofconvictiononearningsrecoveryanddropinreturnsoncapital

Buys SellsAntaSports Schlumberger

17Portfolioallocation:sector


4%

-9%

-5%

-3%

-3%

-3%

-6%

-12%

-5%

5%

8%

30%

-40% -30% -20% -10% 0% 10% 20% 30% 40%

Cash

ConsumerStaples

Materials

TelecommunicationServices

Utilities

RealEstate

Energy

Financials

HealthCare

ConsumerDiscretionary

Industrials

InformationTechnology

Over/underweights

9%

5%

3%

3%

3%

6%

18%

12%

12%

12%

17%

4%

0%

0%

0%

0%

0%

0%

6%

7%

17%

20%

47%

0% 10% 20% 30% 40% 50% 60%

Cash

ConsumerStaples

Materials

TelecommunicationServices

Utilities

RealEstate

Energy

Financials

HealthCare

ConsumerDiscretionary

Industrials

InformationTechnology

FundallocationvsMSCIWorldIndex

Fund

Index

§ SaleofSchlumbergerreducedEnergyweightingtozero§ PurchaseofAntaSportsincreasedConsumerDiscretionaryweightbyabout3.3%

§ OverallthefundmaintainsahigherweightingrelativetotheindexinInformationTechnology,Industrials,andConsumerDiscretionary

§ ThelargestunderweightsinthefundaretoFinancialsandConsumerstaples

§ ThefundmaintainsazeroweightingtoEnergy,Telcos,Utilities,RealEstate,Materials,andConsumerStaples

Sectorholdingsaresubjecttochange.

18Portfolioallocation:geography(bydomicile)


4%

0%

0%

9%

24%

0%

62%

4%

0%

0%

3%

3%

16%

17%

57%

0% 10% 20% 30% 40% 50% 60% 70%

Cash

AsiaPacific(exJapan)

Other

MiddleEast

Japan

Europe

Emergingmarkets

NorthAmerica

FundallocationvsMSCIWorldIndex

Fund

Index

4%

-4%

0%

3%

-6%

-8%

17%

-5%

-10% -5% 0% 5% 10% 15% 20%

Cash

AsiaPacific(exJapan)

Other

MiddleEast

Japan

Europe

Emergingmarkets

NorthAmerica

Over/underweights

§ FundslightlyunderweightinUSpostsaleofSchlumberger(-5%)§ FundunderweightEuropebyabout8%§ Benchmark(MSCIWorld)doesnotincludeemergingmarkets.Fundhasabout17%exposuretothisregion§ ThefundcontinuestoholdonlyonecompanyinJapanandisthusunderweightthisregionbyabout4%


19Geographicexposure

Source: GuinnessAtkinsonAssetManagement(dataasof12.31.2017)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Bydomicile Bysales

Other/undefined

LatinAmerica

Africa/ME

Asia-Pacific

UK

Europeex-UK

NorthAmerica

§ FundhasalowerexposuretoNorthAmericawhenconsideredinrevenues(about45%)versusbydomicile(about59%)

§ FundhasalargerexposuretoAsiaandemergingmarketsbyrevenues


20

PE PE

18Y 19Y

ContinentalAG Automobiles&Components 55.9 DE 3.4% 12.9 11.9AppliedMaterialsInc Semiconductors&Semiconductor 57.0 US 3.3% 12.7 11.7DanaherCorp HealthCareEquipment&Servic 65.2 US 3.3% 21.4 19.8ANTASportsProductsLtd ConsumerDurables&Apparel 12.3 CN 3.7% 21.7 18.3PayPalHoldingsInc Software&Services 92.2 US 3.3% 32.7 27.0SchneiderElectricSE CapitalGoods 51.9 FR 3.4% 16.6 15.3SiemensAG CapitalGoods 122.2 DE 3.4% 15.8 14.1NewOrientalEducation&TechnologyGroupInc ConsumerServices 16.1 CN 3.5% 41.8 30.9IntercontinentalExchangeInc DiversifiedFinancials 41.5 US 3.4% 20.6 18.5IntelCorp Semiconductors&Semiconductor 211.8 US 3.4% 14.2 13.7WisdomTreeInvestmentsInc DiversifiedFinancials 1.7 US 2.9% 34.0 25.7SamsungElectronicsCoLtd TechnologyHardware&Equipmen 312.7 KR 3.5% 7.1 6.9ComcastCorp Media 188.9 US 3.5% 17.8 16.1CognizantTechnologySolutionsCorp Software&Services 42.2 US 3.4% 16.3 14.2ShirePLC Pharmaceuticals,Biotechnology 47.7 US 3.4% 9.8 9.0AlphabetInc Software&Services 755.0 US 3.3% 21.4 17.6InfineonTechnologiesAG Semiconductors&Semiconductor 33.1 DE 3.4% 24.1 21.2FacebookInc Software&Services 538.9 US 3.3% 21.4 17.8NIKEInc ConsumerDurables&Apparel 103.6 US 3.5% 27.3 23.6CatcherTechnologyCoLtd TechnologyHardware&Equipmen 8.7 TW 3.4% 9.1 7.9BoeingCo/The CapitalGoods 177.4 US 3.4% 26.4 22.9CiscoSystemsInc TechnologyHardware&Equipmen 193.6 US 3.4% 15.6 14.8EatonCorpPLC CapitalGoods 36.0 US 3.5% 15.4 14.1NVIDIACorp Semiconductors&Semiconductor 128.8 US 3.3% 43.1 36.0SAPSE Software&Services 140.8 DE 3.3% 21.2 19.0AACTechnologiesHoldingsInc TechnologyHardware&Equipmen 23.5 CN 3.4% 19.4 15.8FANUCCorp CapitalGoods 52.1 JP 3.4% 32.2 29.4CheckPointSoftwareTechnologiesLtd Software&Services 17.2 IL 3.3% 18.1 16.7RoperTechnologiesInc CapitalGoods 26.8 US 3.4% 25.6 23.6VeriFoneSystemsInc TechnologyHardware&Equipmen 2.0 US 2.1% 12.0 10.3

Averagemkt.cap 118.6 Totalportfolio 17.5 15.7Medianmkt.cap 54.0 Y-o-Ygrowth 12%

MSCIWorldIndex 17.2 15.7Fundpremium/(discount) 2.0% -0.5%

NameCountryofdomicile

%NAVMkt.capIndustry

Portfolioprofile

Source: GuinnessAtkinsonAssetManagement,Bloomberg(dataasof12.31.2017)Fundholdingsaresubjecttochange.Forecastsareinherentlylimitedandcannotbereliedupon.

Fundonlytradingatasmallpremiumtobroadmarketatquarterend

21Portfolioallocationbyestimatedfuturelongtermgrowthrate

Portfoliotoday

Rangelast

10years

10–20%growth

20%+growth

33% 20-50%

60% 30-65%

7% 0-20%

0–10%growth

Source: GuinnessAtkinsonAssetManagementestimates(asof12.31.2017)EstimatesareusedareusedbyGuinnessAtkinsontohelpallocatetheportfolio,andmaynotbeindicativeoftheFund'sperformance.

Allocation

Thementionofanyindividualsecuritiesshouldneitherconstitutenorbeconstruedasarecommendationtopurchaseorsellsuch securities,andtheinformationprovidedregardingsuchindividualsecuritiesisnotasufficientbasisuponwhichtomakeaninvestmentdecision.

22Portfoliostatistics– arewedoingwhatwesaywewilldo?

Source:GuinnessAtkinsonAssetManagement,Bloomberg,CSHOLT(dataasat12.31.2017)

Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance of the Funds may be lower or higher than the performance quoted. Total returns reflect a fee waiver in effect and in the absence of this waiver, the total returns would be lower. Performance data does not reflect the 2% redemption fee for shares held less than 30 days and if deducted the fee would reduce the performance quoted. For performance current to the most recent month end please visit www.gafunds.com/our-funds or call 800-915-6565.

ConvictionInnovation Quality Growth

Fund MSCIWorld

R&D/Sa les 7.8% 6.0%

CAPEX/Sa les

7.5% 9.0%

Fund MSCIWorld

CFROI(2017)

16% 12%

Netdebt/equity

-9% 67%

Fund MSCIWorld

Annualised3yrsa lesgrowth

13% 4%

Earningsgrowth

12% 10%

FCFyield 4.6% 4.5%

PE(2018) 17.5 17.2

Pos i tions 30

Top10%NAV 33%

Bottom10%NAV 30%

Activeshare 93%

23

§ TheglobalITsector

24TheITsectorhassignificantlyoutperformedtheMSCIWorldindex…


• ITsectorhasoutperformedMSCIWorldindexby76%sinceDec2010

25…withmostofthisoutperformancecomingfromfasterearningsgrowth

• Mostofthisoutperformancehascomefromfasterearningsgrowth

• MultipleexpansionofITstockshasbeenthesameasMSCIWorld

35%

35%

82%

22%


26

§ DoesthatmeanglobalITstocksarenowexpensive?

27GlobalITSector– atasmallpremiumtoMSCIWorldindex


28…butstillcheaprelativetohistoricaverage…


29…andexpectedearningsgrowthisabovehistoricaverage


30ITsector- significantdivergenceinperformanceamongsttechindustries

• SemiconductorsandSoftwarehaveledthewaywhileHardwarehaslagged


31EarningsgrowthhasbeenthemaincontributortoITperformance…

• Earningsgrowthhasdominatedreturnsacrossindustries

• Softwarehasseenthebiggestmultipleexpansion,whilesemisandhardwarehasbeenmodest


32…howevertherehasbeenwidedivergenceinindustryvaluationssinceDec2010

• Softwarecompaniesnowtradeatabouta50%premiumtoSemisandHardware

• Semisandhardwaremultipleexpansionhasbeenmodest

50% premium


33Analystsareforecastingstrongestearningsgrowthinsemiconductors

• Allthreeindustriesforecasttogrowearningsmorethan20%inthenext12months

• Notesemiconductorsareverycyclical


34Semiconductorsoffercompellingvaluewithstrongearningsgrowth

• Despitesemiconductorcyclicality,earningsgrowthsince2010hasoutpacedotherITindustries• Semiconductorsarecoretomanyinnovationthemes:bigdata,AI,EV’s/AV’s,VR/AR,IoT,ML,etc.• SemisarecheaperthanbroadITsectorandcheaperthanMSCIWorldIndex,yetwithfastergrowth


35

*TheAdvisorhascontractuallyagreedtoreimburseexpenses(excludingAcquiredFundFeesandExpenses,interest,taxes,dividendsonshortpositionandextraordinaryexpenses)inordertolimittheTotalAnnualOperatingExpensesforInstitutionalSharesand forInvestorClassto0.99%and1.24%respectivelythroughJune30,2018.TotheextentthattheAdvisorabsorbsexpensestosatisfythiscap,itmayrecoupaportionorallofsuchamountsabsorbedatanytimewithinthreefiscalyearsafterthefiscalyearinwhichsuchamountswereabsorbed,subjecttotheexpensecapinplaceatthetimerecoupmentissought,whichcannotexceedtheexpensecapatthetimeofwaiver.TheexpenselimitationagreementmaybeterminatedbytheBoardoftheFundatanytimewithoutpenaltyupon60days’ notice.

TheFund’sinvestmentobjectives,risks,chargesandexpensesmustbeconsideredcarefullybeforeinvesting.Thestatutoryandsummaryprospectuscontainsthisandotherimportantinformationabouttheinvestmentcompany,anditmaybeobtainedbycalling800-915-6566orvisitinggafunds.com.Pleasereaditcarefullybeforeinvesting.

Diversificationdoesnotassureaprofitorprotectagainstlossinadecliningmarket

Mutualfundinvestinginvolvesriskandlossofprincipalispossible.Investmentsinforeignsecuritiesinvolvegreatervolatility,political,economicandcurrencyrisksanddifferencesinaccountingmethods.TheFundalsoinvestsinsmallercompanies,whichwillinvolveadditionalriskssuchaslimitedliquidityandgreatervolatility.TheFundisnon-diversifiedmeaningitsassetsmaybeconcentratedinfewerindividualholdingsthandiversifiedfunds.Therefore,theFundismoreexposedtoindividualstockvolatilitythandiversifiedfunds.

Opinionsexpressedaresubjecttochangeandshouldnotbeconsideredinvestmentadvice.

Cashflowisthetotalamountofmoneybeingtransferredintoandoutofabusiness.

Fundholdingsandsectorallocationsaresubjecttochangeandarenotrecommendationstobuyorsellanysecurity.

PricetoEarningsRatio(P/E)isAvaluationratioofacompany'scurrentsharepricecomparedtoitsper-shareearnings.

ReturnonCapitalis areturnfromaninvestmentthatisnotconsideredincome.

Disclosure

36Disclosure

Marketcapitalization(cap)iscalculatedbymultiplyingacompany'ssharesoutstandingbythecurrentmarketpriceofoneshare.Theinvestmentcommunityusesthisfiguretodetermineacompany'ssize,asopposedtosalesortotalassetfigures.

TheMSCIWorldIndexisafreefloat-adjustedmarketcapitalizationweightedindexthatisdesignedtomeasuretheequitymarketperformanceofdevelopedmarkets.

TheMSCIEuropeexUKIndexcaptureslargeandmidcaprepresentationacross14DevelopedMarkets(DM)countriesinEurope.Theindexcoversapproximately85%ofthefreefloat-adjustedmarketcapitalization acrossEuropeanDevelopedMarkets excludingtheUK.

TheMSCIACAsiaex-JapanIndexcaptureslargeandmidcaprepresentationacross2of3DevelopedMarkets(DM)countries*(excludingJapan)and9EmergingMarkets(EM)countriesinAsia.Theindexcoversapproximately85%ofthefreefloatadjustedmarketcapitalizationineachcountry.

TheMSCIEmergingMarketsIndexcaptureslargeandmidcaprepresentationacross24EmergingMarkets(EM)countries.With 845constituents,theindexcoversapproximately85%ofthefreefloat-adjustedmarketcapitalizationineachcountry.

TheMSCI JapanIndexisdesignedtomeasuretheperformanceofthelargeandmidcapsegmentsoftheJapanesemarket.With320constituents,theindexcoversapproximately85%ofthefreefloat-adjustedmarketcapitalizationinJapan.

TheMSCIUKIndexisdesignedtomeasuretheperformanceofthelargeandmidcapsegmentsoftheUKmarket.With109constituents,theindexcoversapproximately85%ofthefreefloat-adjustedmarketcapitalizationintheUK.

TheMSCIUSIndexisdesignedtomeasuretheperformanceofthelargeandmidcapsegmentsoftheUSmarket.With635constituents,theindexcoversapproximately85%ofthefreefloat-adjustedmarketcapitalizationintheUS.Markets excludingtheUK.

Onecannotinvestdirectlyinanindex.

DistributedbyForesideFundServices,LLC

Documents

Global Innovators Fund - gafunds.com · § Verifone, the electronic payment technology company, modestly beat earnings but margin expansion and revenue growth pressures still not