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Introducing

Measured Risk Strategy Fund

Measured Risk Strategy Fund (MRPAX/MRPIX) invests tactically in options linked inversely to stock market volatility while the majority of the Fund remains invested in short-term fixed income securities or cash.

The Fund seeks total return from capital appreciation and income.

The Fund invests up to 20% in options on volatility-linked ETPs to capitalize on flat or declining levels of volatility, while the balance (80% or more) is invested in short-term fixed income (i.e. Treasury Bills) seeking to limit maximum overnight drawdown risk versus volatility ETPs.

Tactical exposure to short volatility, via options, attempts to limit the risk of severe single-day price declines in rising periods of volatility. The majority of the risk is in options exposure which can suffer total loss in a short period of time.

Here’s how it works

1

Short Volatility as an Asset Class

What if there were an asset class whose returns significantly outperformed the S&P 500 in three of the five years since its inception……but significantly underperformed the S&P 500 in the other years?

Since its inception in July 2012, the Short Volatility Index significantly outperformed the S&P 500 Index in its first partial year 2012, 2013, 2016 and 2017; and underperformed in 2014, 2015 and through 6/30/18.



Returns source: Standard & Poors Indices
Returns ending 2Q 2018
Past performance is not indicative of future results.
There is no guarantee that any asset class will continue to perform similarly in the future. The referenced indices are shown for general market comparisons and are not meant to represent the Fund.
Investors cannot directly invest in an index; unmanaged index returns do not reflect any fees, expenses or sales charges.

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2

Investors use different assets classes in their portfolios for diversification purposes.

Consider, for example, that in 2008 the MSCI Emerging Markets asset class lost 53.33% of its value.

Why do investors continue to invest in such a high-risk asset class?

Now consider that in 2009, the very next year, MSCI Emerging Markets delivered a 78% return.

Similarly, the Short Volatility Index has been either the highest-performing or the lowest-performing asset class in each of the past five calendar years since its inception in July 2012, as shown in the table below.

The Short Volatility Index is inversely correlated with VIX.

Learn more about the VIX and volatility


Sources: Callan, Bloomberg as of 6/30/18
Past performance is not indicative of future results. There is no guarantee that any asset class will continue to perform similarly in the future. The referenced indices are shown for general market comparisons and are not meant to represent the Fund. Investors cannot directly invest in an index; unmanaged index returns do not reflect any fees, expenses or sales charges.

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3

Returns of the Short Volatility Index fluctuate significantly.

The chart below, for example, shows that on February 5, 2018 the Short Volatility Index suffered a loss of 96%. Since its inception in July 2012, as of year end 2017, the Short Volatility Index returned a cumulative return of 1068% and an annualized return of 57.4%, growing $10,000 to $116,000.

After an extreme spike in volatility on February 5, 2018, the Index dropped to deliver a cumulative return of -56% and an annualized return of -13.2%, a single-day loss of 96% and ending balance of just $4342.



Source: Bloomberg, as of 6/30/18
*SPVXSPIT inception
Past performance is not indicative of future results. There is no guarantee that any asset class will continue to perform similarly in the future. The referenced indices are shown for general market comparisons and are not meant to represent the Fund. Investors cannot directly invest in an index; unmanaged index returns do not reflect any fees, expenses or sales charges.

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There is a way to potentially participate in the upside movement of the index while limiting catastrophic losses.

4

The Fund seeks to outperform equity markets over the long term by purchasing options linked inversely to volatility.

During volatility spikes, these options may lose up to 100% of their value. Yet by limiting this “high-risk component” to a small percentage of the portfolio, the Fund seeks to avoid catastrophic losses, especially over short periods of time. The underlying movement of the Index offers the potential for gains that may counterbalance losses and provide an opportunity for net positive return over time.


Hypothetical allocation percentages illustrated here may not be indicative of actual allocations at any given time and are provided for illustration only. Options Risk. There are risks associated with the purchase of call and put options. As the buyer of a put or call option, the Fund risks losing the entire premium invested in the option if the Fund does not exercise the option or sell to close the position while it still has value. Although a small portion (2%-5%) of the Fund is allocated to mitigate an extreme upward spike in volatility, the Fund may experience extreme price declines in a single day.Fixed Income Risk. When the Fund invests in fixed income securities, the value of your investment in the Fund will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of fixed income securities owned by the Fund. In general, the market price of fixed income securities with longer maturities will increase or decrease more in response to changes in interest rates than shorter-term securities. Other risk factors include credit risk (the debtor may default), extension risk (an issuer may exercise its right to repay principal on a fixed rate obligation held by the Fund later than expected), and prepayment risk (the debtor may pay its obligation early, reducing the amount of interest payments). These risks could affect the value of a particular investment by the Fund, possibly causing the Fund’s share price and total return to be reduced and fluctuate more than other types of investments. The Fund attempts to mitigate these risks by investing in short-term US Government Treasury Bills and cash.

Measured Risk Strategy Fund is not an investment in the Short Volatility Index (SPVXSPIT) nor does it attempt to outperform it.

The Fund seeks to outperform equity markets over the long term by purchasing options on volatility-linked ETPs to attempt to limit the downside of single-day price declines in rising periods of volatility. The majority of the Fund is invested in short-term fixed income seeking to limit maximum overnight drawdown risk versus volatility ETPs.

During volatility spikes, these options may lose up to 100% of their value. Yet by limiting this “high-risk component” to a small percentage of the portfolio, the Fund seeks to avoid catastrophic losses, especially over short periods of time. The underlying movement of the Index offers the potential for gains that may counterbalance losses and provide an opportunity for net positive return over time.

Contact your financial advisor or us directly for more information.

About

Measured Risk Portfolios was founded in 2007 by Larry Kriesmer, CLU, ChFC and Bernard Surovsky, CFS of Kingsroad Financial & Insurance Services to launch investment strategies that did not yet exist for their clients. Each has more than 20 years of experience trading and using options, and has been trading volatility as part of its strategies since 2013. The Measured Risk Strategy Fund was launched in 2016.

Quarterly Fact Sheet

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Documents

Prospectus
XBRL Files
Account Form
Statement of Additional Information
Roth IRA Application Form
Simple IRA Application Form
IRA ApplicationForm
Roth IRA Financial Disclosure
Simple IRA Financial Disclosure

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