CORE ONE Fund

SGFIX  |   SGFAX

Seeking capital appreciation in both rising and falling markets, with the goal of minimizing downside volatility

The investor should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the investment company that can be found in the Fund’s prospectus. To obtain a prospectus, a free copy is available by contacting (844) 347-2140 or from this website. Please read the prospectus carefully before investing.

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CORE ONE Overview

The Standard & Poor’s 500 Index (S&P 500) is widely regarded as one of the best gauges of prominent American equities’ performance, and by extension, that of the stock market overall. Since it is not possible to invest directly into an index, the CORE ONE fund invests in S&P 500 index futures contracts and long dated put options, seeking to correlate to the index during growth periods, while offering a protection strategy in downturns, which seeks to provide downside protection in declining markets.

The fund employs a proprietary model that allocates the fund’s assets between three investment strategies. These strategies, when combined with disciplined management of the fund’s cash and cash equivalents, allows the fund to attempt to deliver returns higher than those of the S&P 500 Index with less volatility.

Three Strategies, One Fund

The SafeGuard CORE ONE Fund uses a proprietary mix of three separate and distinct investing techniques seeking broad market participation in growth periods and aiming to minimize downside risk during market drawdowns. These strategies, applied along with our management of cash and cash equivalents, are the foundation of CORE ONE. Together, the strategies seek to provide equity-like returns with less volatility than the overall market.

S&P 500 Index Strategy

The S&P 500 Strategy seeks to correspond generally with the returns of the S&P 500 Index through use of S&P 500 Index futures contracts. The index futures contracts are expected to represent, in aggregate, up to 120% of the value of the Fund’s net assets.

Protection Strategy*

Under the Protection strategy, which seeks to provide downside protection in declining markets, the fund purchases long dated put options on the S&P Index. If the S&P Index Strategy is larger than the Protection Strategy, protection may be incomplete.

*The fund is subject to principal loss and there is no guarantee the strategy will be successful.

Futures Overlay Strategy

To produce capital appreciation and diversification, the fund invests up to 25% of its total assets in a specific number of commodity-based strategies. These strategies are expected to have low correlation to each other and the equity markets.

The Purpose of Liquidity

For liquidity, hedging purposes, and to enhance performance, the fund is designed to keep a significant portion of its assets in cash or cash equivalent investments. In a rising interest rate environment, this allows for the fund to capture equity like returns.

Definitions

How Investopedia* and SafeGuard define key terms.
Understanding these terms can help you be a more successful investor.

The S&P 500 index tracks the largest companies in the United States. Its stocks are curated by the S&P Index Committee, which selects companies based on a number of factors, including market capitalization, sector allocation, and liquidity. It is not possible to invest directly in the S&P 500, nor any other index.

The term index futures refers to futures contracts that allow a firm or individual to buy or sell a contract derived from a financial index today to be settled at a future date.  Traders use these contracts to speculate on the price direction indexes, such as the S&P 500. They also use index futures to hedge their equity positions against losses.

An index option is a financial derivative that gives the holder the right (but not the obligation) to buy or sell the value of an underlying index, such as the S&P 500 index, at the stated exercise price. No actual stocks are bought or sold. Often, an index option will utilize an index futures contract as its underlying asset.

Put options increase in value as the underlying index falls in price, as volatility of the underlying index increases in price, and as interest rates decline in price. Put options lose value as the underlying index increases in price, as volatility of the index price decreases, as interest rates rise, and as the time to expiration nears.

Commodities are an important aspect of most American’s daily life. A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. Traditional examples of commodities include grains, gold, beef, oil, and natural gas.

For investors, commodities can be an important way to diversify their portfolios beyond traditional securities. Because the prices of commodities tend to move in opposition to stocks, some investors also rely on commodities during periods of market volatility.

Put options increase in value as the underlying index falls in price, as volatility of the underlying index increases in price, and as interest rates decline in price. Put options lose value as the underlying index increases in price, as volatility of the index price decreases, as interest rates rise, and as the time to expiration nears.

“Overlay” is a term used by SafeGuard to describe the use of 3-5 alternative investment managers in attempt to enhance the performance of CORE ONE. 

We choose these managers based on several objectives including consistent performance over time, diversification independent from the S&P, exposure to multiple market types and the establishment of risk controls. A third-party specialty firm helps SafeGuard evaluate and choose from a universe of over 400 alternative investment managers. SafeGuard can change these managers at the discretion of its own investment managers.

Put options increase in value as the underlying index falls in price, as volatility of the underlying index increases in price, and as interest rates decline in price. Put options lose value as the underlying index increases in price, as volatility of the index price decreases, as interest rates rise, and as the time to expiration nears.

Cash and cash equivalents refers to the line item on the balance sheet that reports the value of a company’s assets that are cash or can be converted into cash immediately. Cash equivalents include bank accounts and marketable securities such as commercial paper and short-term government bonds.

Cash equivalents should have maturities of three months or less and must also be able to be liquidated to cash; for this reason, cash equivalents often have active markets.

A company carries cash and cash equivalents to pay its short-term bills but to also preserve capital for long-term capital deployment.

*Investopedia was founded in 1999 with the mission of simplifying financial decisions and information to give readers the confidence to manage every aspect of their financial life.

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Model and Data: Given the complexity of the investments and strategies of the Fund, the Advisor relies heavily on quantitative models supplied by third parties and information and data supplied by third parties (“Models and Data”). Models and Data are used to construct sets of transactions and investments, to provide risk management insights, and to assist in hedging the Fund’s investments. Some of the models for the Fund are predictive in nature. The use of predictive models has inherent risks.

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The investor should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the investment company that can be found in the Fund’s prospectus. To obtain a prospectus, a free copy is available by contacting (844) 347-2140 or from this website. Please read the prospectus carefully before investing.

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