Since the day they opened the doors to the stock exchange, investors have searched high and low for a strategy that could both capture upside potential and limit long-term drawdowns in their portfolios. Over decades of market history, we can see various sectors and industries move in and out of favor, some generating trends that can last months, or even years. While we do not know when trends will end and new trends will begin, we do know that being married to a single type of stock rarely works out. We want to move with what is in favor. And not only do we want to own uptrends, we want to own the best uptrends. We want to own stocks that are not only doing better than their peers in the market, but show signs of this continued outperformance.

Many asset managers, advisors, ETFs, and mutual funds find it hard to consistently beat their benchmark. We believe this difficulty arises from not seeking to own the very best stocks that are outperforming their benchmark on a consistent basis. Stocks that are in uptrends on a relative basis versus their benchmark are considered strong on a relative basis.


The Concept of Momentum

Momentum simply refers to the fact that an asset which has outperformed the market in the recent past typically continues to outperform in the near and intermediate future. This is a market phenomena that can be observed across all time periods and asset classes. Momentum investing carries risk, but so do all other investing factors. There is no such thing as risk-free investing. But we do know Momentum is a consistent market characteristic since markets have existed. The Adaptiv Select ETFTM (NYSE: ADPV) seeks to capture Momentum, which has the potential to obtain excess returns over extended periods of time.

What is Relative Strength?

Relative Strength refers to the measurement of the stock’s performance as compared to its benchmark or another stock. This concept compares the performance of stock “X” vs “Y”, measured over a period. For example, “X” may increase more or less than “Y” in a rising market or “X” may fall more or less as compared to “Y” in a falling market. For example, a relative strength investor might pick technology companies that have outperformed the Nasdaq Composite. We want to be involved in a concentrated portfolio of what we feel are the “best of the best”, in regards to this measurement.


Cash is a position, too!

From time to time, broad markets go into periods of extended downtrends. While many advisors and professionals would have you take the stance of “weathering the storm”, we do not feel this is an appropriate way of growing - or protecting - your principal capital. The Adaptiv Select ETFTM (ADPV) moves to a “high cash” position (short-term Treasury Bills, cash, and cash equivalents) when our Adaptiv Select model calculates the broad U.S. equity is in a downtrend. This allows investors in the fund to embrace avoiding downtrends, while potentially reducing the tax implications of selling their holdings.


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Carefully consider the Funds' investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Fund’s Prospectus and Summary Prospectus, which may be obtained by visiting https://adpvetf.com/investor-materials. Read the Prospectus and Summary Prospectus carefully before investing.

Distributed by: Quasar Distributors, LLC.

Investing involves risk, including possible loss of principal. To the extent the Fund’s investments are concentrated in or have significant exposure to a particular issuer, industry or group of industries, or asset class, the Fund may be more vulnerable to adverse events affecting such issuer, industry or group of industries, or asset class than if the Fund’s investments were more broadly diversified.

Active management by the Adviser in selecting and maintaining a portfolio of securities that will achieve the Fund’s investment objective could cause the Fund to underperform compared to other funds having similar investment objectives. For longer periods of time, the Fund may hold a substantial cash position. If the market advances during periods when the fund is holding a large cash position, the Fund may not participate to the extent it would have if the Fund had been more fully invested.

The Adviser relies heavily on a quantitative model developed by the Adviser, which is used to value and rank investments or potential investments, to provide risk management insights and to assist in reducing extending declines in the Fund’s net asset value. When models and data prove to be incorrect, misleading, or incomplete, any decisions made in reliance thereon will expose the Fund to risks.

Shares are bought and sold at market price (closing price) not net asset value (NAV) and are not individually redeemed from the Fund. Market price returns are based on the midpoint of the bid/ask spread at 4:00pm Eastern Time (when NAV is normally determined) and do not represent the return you would receive if you traded at other times.

Investment advisory services are provided by Client First Investment Management LLC, an SEC-registered investment adviser. The firm only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability.