Investment Objective
The fund’s objective is to seek long-term capital appreciation.
Morningstar RatingsTM
All of the aforementioned MorningstarTM data pertains to the Acclivity Small Cap Value Fund Class-I, AXVIX. Overall Morningstar Return, Overall Morningstar Risk, 1-Year Category Percentile Rank, 3-Year Category Percentile Rank, out of 446, 446, 475, 446, and 420 Small Value funds, respectively, as of 09-30-24. The percentile ranking is calculated based on total returns. The star rating is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance.
Past performance is no guarantee of future results. Current performance may be lower or higher than the data cited above. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. For performance information current to the most recent month-end, please call 855.873.3837. Investments cannot be made in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges.
The Morningstar Rating™ for funds, or “star rating,” is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. The rating is based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads.
The top 10% of products in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
Morningstar Return rates a fund’s performance relative to other managed products in its Morningstar Category. It assesses a product’s excess return over a risk-free rate (the return of the 90-day Treasury Bill) in comparison with the products in its Morningstar category. In each Morningstar category, the top 10% of products earn a High Morningstar Return (High), the next 22.5% Above Average (+Avg), the middle 35% Average (Avg), the next 22.5% Below Average (-Avg), and the bottom 10% Low (Low). Morningstar Return is measured for up to three time periods (three, five, and 10 years), and these separate measures are then weighted and averaged to produce an overall measure for the product. Products with less than three years of performance history are not rated.
Morningstar Risk evaluates a fund’s downside volatility relative to that of other products in its Morningstar Category. It assesses the variations in monthly returns, with an emphasis on downside variations, in comparison with other products in its category. In each Morningstar category, the 10% of products with the lowest measured risk are described as Low Risk (Low), the next 22.5% Below Average (-Avg), the middle 35% Average (Avg), the next 22.5% Above Average (+Avg), and the top 10% High (High). Morningstar Risk is also measured for up to three time periods (three, five, and 10 years), and these measures are weighted and averaged to produce an overall measure for the product. Products with less than three years of performance history are not rated.
Investment Strategy
The Small Cap Value Fund employs a quantitatively driven, factor-based investment strategy. Particularly, the Advisor selects, from the U.S. publicly traded stock universe, securities that Acclivity Investment Research considers to be small capitalization value stocks. The two requirements for companies to be considered as small capitalization value stocks are: (i) be in the lowest 8% of U.S. aggregate market capitalization; and (ii) exhibit a low market value relative to its book value. Within the defined universe, the strategy aims to systematically exploit select academically proven and empirically tested sources of higher expected returns in the market. The factor premia targeted by the strategy include: market, size, value, profitability, investment, and momentum.
For Illustrative Purposes Only
Fund Facts
| Class N | Class I | |
| Ticker | AXVNX | AXVIX |
| CUSIP | 66538F355 | 66538F363 |
| Inception | 12/31/2018 | 12/31/2018 |
| Minimum* | $20,000 | $5,000 |
| Gross Expense Ratio | 1.88% | 1.60% |
| Net Expense Ratio | 0.76% | 0.51% |
Pursuant to an operating expense limitation agreement between Innealta Capital, LLC (the “Adviser”) and the Small Cap Value Fund, the Adviser has agreed to waive its fees and/or absorb expenses of the Small Cap Value Fund to ensure that Total Annual Fund Operating Expenses (excluding any brokerage fees and commissions, acquired fund fees and expenses, borrowing costs (such as interest and dividend expense on securities sold short), taxes and extraordinary expenses such as litigation) for the Small Cap Value Fund do not exceed 0.73% or 0.48% of the Small Cap Value Fund’s average net assets, for Class N or Class I shares, respectively, through April 30, 2025. The net expense ratio is contractual. This operating expense limitation agreement can be terminated only by, or with the consent of, the Board of Trustees. The Adviser is permitted to receive reimbursement from the Funds for fees it waived and Fund expenses it paid, subject to the limitation that: (1) the reimbursement for fees and expenses will be made only if payable within three years from the date the fees and expenses were initially waived or reimbursed; and (2) the reimbursement may not be made if it would cause the expense limitation in effect at the time of the waiver or currently in effect, whichever is lower, to be exceeded.
*Innealta Capital maintains distribution agreements with selected platforms where minimums may be waived for some clients in certain share classes. Please contact us for more details.
Fund Documents
Sector Weights
Holdings and allocation data as of September 30, 2024. Fund holdings are subject to change and should not be considered investment advice.
Portfolio Characteristics
| AXVIX | Russell 2000 Value Index | |
| Price-to-Book | 1.15x | 1.36x |
| Weighted Average Market Cap (Billions) | $3.75 | $2.87 |
| Percentage in Top 10 Holdings | 8.59% | 5.09% |
| Number of Holdings | 498 | 1,438 |
As of 09/30/2024
DISCLOSURES & IMPORTANT INFORMATION
Innealta Capital, LLC is an Investment Adviser, registered with the Securities & Exchange Commission. For more information, please visit our website: www.acclivityresearch.com.
Investors should carefully consider the investment objectives, risks, charges and expenses of the Innealta Funds. This and other important information about the Funds is contained in the prospectus, which can be obtained by calling 855.873.3837. The prospectus should be read carefully before investing.
The Innealta Funds are distributed by Northern Lights Distributors, LLC a FINRA/SIPC member. Innealta Capital, LLC is not affiliated with Northern Lights Distributors, LLC.
Acclivity Investment Research collaborates with Syntax Advisors to diversify the business risk within its investment strategies. Syntax’s proprietary business classification system aims to capture the full range of economic activities in order to minimize business concentration risks.
GLOSSARY & RISK CONSIDERATIONS
The Russell 2000 Value TR Index measures the performance of Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. Total return indexes reinvest dividends. Frank Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Indices do not reflect any fees, expenses or sales charges and are not available for direct investment.
Price-to-Book compares a company’s market value to its book value. The market value of a company is its share price multiplied by the number of outstanding shares. The book value is the net assets of a company, In other words, if a company liquidated all of its assets and paid off all its debt, the value remaining would be the company’s book value. Weighted Average Market Cap refers to a stock market index in which larger companies (i.e. with higher market capitalization) have more influence on the index’s performance.
Percentage in Top 10 Holdings is meant to be a measure of portfolio risk. Specifically, the higher the percentage, the more concentrated the fund is in a few companies or issues, and the more the fund is susceptible to the market fluctuations in these few holdings. The Percent Assets in Top 10 Holdings figure provides insight into the degree to which a portfolio is diversified. Used in combination with the total number of holdings, it can indicate how concentrated a fund is. Number of Holdings is the total number of holdings within the portfolio.
Important Risk Information
Mutual Funds involve risk including the possible loss of principal.
The Small Cap Value Fund invests in the stocks of small-capitalization companies. The earnings and prospects of these companies are more volatile than larger companies. Small-sized companies may experience higher failure rates than do larger companies. Other possible risks to the Fund include those related to general risk, Equity Securities Risk, Equity Securities Risk, Small-Sized Company Risk, Value Investing Risk, Limited Operating History Risk, Management Risk, Derivatives Risk, Futures Risk, and Securities Lending Risk. Please review the prospectus carefully for additional details.
Shares of the Innealta Capital Funds are currently offered only in the United States to U.S. investors and are not available for sale in any jurisdiction other than the United States. The information on this Web site should not be considered a solicitation to buy or an offer to sell shares of the Innealta Capital Funds in any jurisdiction where it would be unlawful under the securities law of that jurisdiction.
© 2024 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
As of 09/30/2024, Morningstar rated the Acclivity Small Cap Value Fund as 4 stars overall, 4 stars over a three-year period, and 4 starts over a five-year period. The overall and three-year rankings reflect a comparison against 446, 446, and 420 funds, respectively, within the Small Value category.
Additional Information
Advisory Services are offered through Innealta Capital, LLC, an Investment Adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. No federal or state agency or regulatory or self-regulatory authority has approved the information contained in this website, and any representation to the contrary is unlawful. A copy of our Form ADV Part 2 is available below.
Innealta Capital, LLC’s website and its associated links offer news, commentary, and generalized research, not personalized investment advice. All investments involve risk and unless otherwise stated, are not guaranteed. Be sure to consult with a tax professional before implementing any investment strategy.
This website and articles contained herein may contain testimonials from current or former clients, or endorsements from other persons that are supporting or recommending the activities of the Firm. Such individuals may be compensated directly or indirectly by the Firm for the use of their statements. The statements represent the testimony or endorsement by that individual only and may not represent the experience of all counterparties.