Form 485APOS Advisors’ Inner Circle


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AS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION ON OCTOBER
15, 2021

 

File No. 333-192858

File No. 811-22920

 

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM N-1A

 

REGISTRATION STATEMENT UNDER THE

SECURITIES ACT OF 1933

  POST-EFFECTIVE AMENDMENT NO. 307 /X/

AND

REGISTRATION STATEMENT UNDER THE

INVESTMENT COMPANY ACT OF 1940

 

THE ADVISORS’ INNER CIRCLE FUND III

(Exact Name of Registrant as Specified in Charter)

 

One Freedom Valley Drive

Oaks, Pennsylvania 19456

(Address of Principal Executive Offices, Zip Code)

 

(800) 932-7781

(Registrant’s Telephone Number, including Area
Code)

 

Michael Beattie

c/o SEI Investments

One Freedom Valley Drive

Oaks, Pennsylvania 19456

(Name and Address of Agent for Service)

 

Copy to:

 

Sean Graber, Esquire
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, Pennsylvania 19103

 

It is proposed that this filing become effective (check
appropriate box)

/ / Immediately upon filing pursuant to paragraph (b)
/ / On [date] pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/X/ 75 days after filing pursuant to paragraph (a)(2)
/ / On [date] pursuant to paragraph (a)(1) of Rule 485

 

SUBJECT TO COMPLETION

 

THE INFORMATION IN THIS PROSPECTUS
IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED

 

Preliminary Prospectus Dated October
15, 2021

 

THE ADVISORS’ INNER CIRCLE FUND III

 

PROSPECTUS

 

[Date]

 

BARROW HANLEY EMERGING MARKETS VALUE FUND

I Shares: [____]

Y Shares: [____]

 

BARROW HANLEY INTERNATIONAL VALUE FUND

I Shares: [____]

Y Shares: [____]

 

INVESTMENT ADVISER:

PERPETUAL US SERVICES LLC, DOING BUSINESS AS PGIA

 

SUB-ADVISER:

BARROW, HANLEY, MEWHINNEY & STRAUSS, LLC

 

The U.S. Securities and Exchange Commission has
not approved or disapproved these securities or passed upon the adequacy or accuracy of this prospectus.
Any representation to the contrary is a criminal offense.

 

 

About This Prospectus

 

This prospectus has been arranged into different
sections so that you can easily review this important information. For detailed information about each Fund, please see:

 

  Page
BARROW HANLEY EMERGING MARKETS VALUE FUND [___]
INVESTMENT OBJECTIVE [___]
FUND FEES AND EXPENSES [___]
PRINCIPAL INVESTMENT STRATEGIES [___]
PRINCIPAL RISKS [___]
PERFORMANCE INFORMATION [___]
INVESTMENT ADVISERS [___]
PORTFOLIO MANAGERS [___]
BARROW HANLEY INTERNATIONAL VALUE FUND [___]
INVESTMENT OBJECTIVE [___]
FUND FEES AND EXPENSES [___]
PRINCIPAL INVESTMENT STRATEGIES [___]
PRINCIPAL RISKS [___]
PERFORMANCE INFORMATION [___]
INVESTMENT ADVISERS [___]
PORTFOLIO MANAGERS [___]
SUMMARY INFORMATION ABOUT THE PURCHASE AND SALE OF FUND SHARES, TAXES AND FINANCIAL INTERMEDIARY COMPENSATION [___]

MORE INFORMATION ABOUT THE FUNDS’ INVESTMENT

OBJECTIVES AND STRATEGIES

[___]
MORE INFORMATION ABOUT RISK [___]
INFORMATION ABOUT PORTFOLIO HOLDINGS [___]
INVESTMENT ADVISER [___]
INVESTMENT SUB-ADVISER [___]
PORTFOLIO MANAGERS [___]
RELATED PERFORMANCE DATA OF THE SUB-ADVISER [___]
PURCHASING, SELLING AND EXCHANGING FUND SHARES [___]
PAYMENTS TO FINANCIAL INTERMEDIARIES [___]
OTHER POLICIES [___]
DIVIDENDS AND DISTRIBUTIONS [___]
TAXES [___]
ADDITIONAL INFORMATION [___]
FINANCIAL HIGHLIGHTS [___]
HOW TO OBTAIN MORE INFORMATION ABOUT THE FUNDS Back Cover

 

BARROW HANLEY EMERGING MARKETS VALUE FUND

 

Investment Objective

 

The Barrow Hanley Emerging Markets Value Fund (the
“Emerging Markets Value Fund” or the “Fund”) seeks long term capital appreciation and consistent income from dividends.

 

Fund Fees and Expenses

 

This table describes the fees and expenses that you
may pay if you buy and hold shares of the Fund. You may be required to pay commissions and/or other forms of compensation to a broker
for transactions in I Shares, which are not reflected in the table or the example below.

 

Shareholder Fees (fees paid directly from your investment)

Redemption Fee (as a percentage of amount redeemed, if shares redeemed have been held for less than 30 days) 1.00%

 

Annual Fund Operating Expenses (expenses that you pay each year as a
percentage of the value of your investment)

  I Shares Y Shares
Management Fees   0.87%   0.87%
Other Expenses   1.19%   1.34%
Shareholder Servicing Fees None   0.15%  
Other Operating Expenses1 1.19%   1.19%  
Total Annual Fund Operating Expenses   2.06%   2.21%
Less Fee Reductions and/or Expense Reimbursements2   (1.07)%   (1.07)%
Total Annual Fund Operating Expenses After Fee Reductions and/or Expense Reimbursements   0.99%   1.14%

 

1 Other Operating Expenses are based on estimated amounts for the current fiscal year.
2 Perpetual US Services LLC, doing business as PGIA (the “Adviser” or
“Perpetual-PGIA”) has contractually agreed to waive fees and reimburse expenses to the extent necessary to keep Total Annual
Fund Operating Expenses (excluding interest, taxes, brokerage commissions and other costs and expenses relating to the securities
that are purchased and sold by the Fund, shareholder servicing fees, acquired fund fees and expenses, other expenditures which are
capitalized in accordance with generally accepted accounting principles and other non-routine expenses, such as litigation
(collectively, “excluded expenses”)) from exceeding 0.99% of the Fund’s average daily net assets until February
28, 2023 (the “contractual expense limit”). In addition, the Adviser may receive from the Fund the difference between
the Total Annual Fund Operating Expenses (not including excluded expenses) and the contractual expense limit to recoup all or a
portion of its prior fee waivers or expense reimbursements made during the rolling three-year period preceding the date of the
recoupment if at any point Total Annual Fund Operating Expenses (not including excluded expenses) are below the contractual expense
limit (i) at the time of the fee waiver and/or expense reimbursement and (ii) at the time of the recoupment. This agreement will
terminate automatically upon the termination of the Fund’s investment advisory agreement and may be terminated: (i) by the
Board of Trustees (the “Board”) of The Advisors’ Inner Circle Fund III (the “Trust”), for any reason
at any time; or (ii) by the Adviser, upon ninety (90) days’ prior written notice to the Trust, effective as of the close of
business on February 28, 2023.

 

Example

 

This Example is intended to help you compare the cost
of investing in the Fund with the cost of investing in other mutual funds.

 

The Example assumes that you invest $10,000 in the
Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund’s operating expenses (including capped expenses for the period described
in the footnote to the fee table) remain the same. Although your actual costs may be higher or lower, based on these assumptions your
costs would be:

 

  1 Year 3 Years
I Shares $101 $506
Y Shares $116 $553

 

Portfolio Turnover

 

The Fund pays transaction costs, such as commissions,
when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in total annual
Fund operating expenses or in the example, affect the Fund’s performance. Because the Fund has not commenced operations as of the
date of this prospectus, it does not have portfolio turnover information to report.

 

Principal Investment Strategies

 

Under normal circumstances, the Fund invests at
least 80% of its net assets, plus any borrowings for investment purposes, in securities of companies based in emerging market
countries and instruments with economic characteristics similar to such securities. This policy may be changed upon 60 days’
prior written notice to shareholders. Emerging market countries are countries represented in the MSCI Emerging Markets Index, the
MSCI Frontier Markets Index and to the extent not represented in those indexes, Singapore and Hong Kong. A company is based in an
emerging market country if: (i) the company is organized or maintains its principal place of business in an emerging market country;
(ii) the company’s securities are traded principally in an emerging market country; (iii) at least 50% of the company’s
revenues or profits are generated in an emerging markets country; or (iv) at least 50% of the company’s assets are located in
an emerging markets country. The Fund invests principally in common stock and American Depositary Receipts (“ADRs”).

 

Barrow, Hanley, Mewhinney & Strauss, LLC (the “Sub-Adviser” or
“Barrow Hanley”) pursues a value-oriented strategy and strives to construct a portfolio of securities, selected on a
bottom-up basis, that trade at levels below the MSCI Emerging Markets Index across certain metrics, such as price/earnings (on
normalized earnings), price to book, enterprise value to free cash flow and enterprise value to sales ratios, while simultaneously
providing dividend yield above the MSCI Emerging Markets Index. Barrow Hanley’s Emerging Markets Value team employs a
two-stage process – incorporating both quantitative and qualitative elements – to manage their investment research effort.
Initially, the team uses a valuation based, quantitative screen to narrow down a broad universe of approximately 5,500 emerging
markets stocks to a universe of approximately 100-150 stocks (the “guidance list”) that appear to Barrow Hanley to have
attractive valuations and also exhibit stable to improving operating fundamentals, strong operating cash flow, and a responsible
balance sheet. This guidance list serves as the beginning of Barrow Hanley’s research team’s qualitative assessment. The
research team further refines the guidance list using sector-specific criteria (including, capital ratios for financials,
price-to-net asset value metrics for energy, and other metrics), ultimately focusing on ideas that Barrow Hanley believes are
compelling opportunities. In the fundamental stage of the investment process, the responsible analyst(s) conducts stock-specific
research on each company of interest., including interviews with company management.

 

Principal Risks

 

As with all mutual funds, there is no guarantee that
the Fund will achieve its investment objective. You could lose money by investing in the Fund. A Fund share is not a bank deposit and
it is not insured or guaranteed by the FDIC or any other government agency.
The principal risk factors affecting shareholders’
investments in the Fund are set forth below.

 

Equity Risk – Since it purchases equity
securities, the Fund is subject to the risk that stock prices may fall over short or extended periods of time. Historically, the equity
market has moved in cycles, and the value of the Fund’s securities may fluctuate from day to day. Individual companies may report
poor results or be negatively affected by industry and/or economic trends and developments. The prices of securities issued by such companies
may suffer a decline in response. These factors contribute to price volatility. Common stock is generally subordinate to preferred stock
and debt securities with respect to the payment of dividends and upon the liquidation or bankruptcy of the issuing company.

 

Emerging Markets Securities Risk – The
Fund’s investments in emerging markets securities are considered speculative and subject to heightened risks in addition to the
general risks of investing in foreign securities. Unlike more established markets, emerging markets may have governments that are less
stable, markets that are less liquid and economies that are less developed. In addition, the securities markets of emerging market countries
may consist of companies with smaller market capitalizations and may suffer periods of relative illiquidity; significant price volatility;
restrictions on foreign investment; and possible restrictions on repatriation of investment income and capital. Furthermore, foreign investors
may be required to register the proceeds of sales, and future economic or political crises could lead to price controls, forced mergers,
expropriation or confiscatory taxation, seizure, nationalization or creation of government monopolies. Due to the differences in the nature and quality of financial information
of issuers of emerging market securities, including auditing and financial reporting standards, financial information and disclosures
about such issuers may be unavailable or, if made available, may be considerably less reliable than publicly available information about
other foreign securities.

 

Custody Risk – Custody risk refers to
the risks inherent in the process of clearing and settling trades and to the holding of securities, cash and other assets by local banks,
agents and depositories. Low trading volumes and volatile prices in less developed markets make trades harder to complete and settle,
and governments or trade groups may compel local agents to hold securities in designated depositories that may not be subject to independent
evaluation. Communications between the U.S. and emerging market countries may be unreliable, increasing the risk of delayed settlements
or losses of security certificates. Practices in relation to the settlement of securities transactions in emerging markets involve higher
risks than those in developed markets. In addition, the laws of certain countries may put limits on the Fund’s ability to recover
its assets if a foreign bank or depository or issuer of a security or an agent of any of the foregoing goes bankrupt. The Fund would absorb
any loss resulting from such custody problems and may have no successful claim for compensation.

 

Foreign Company Risk – Investing in foreign
companies, including direct investments and investments through ADRs, poses additional risks since political and economic events unique
to a country or region will affect those markets and their issuers. These risks will not necessarily affect the U.S. economy or similar
issuers located in the United States. Securities of foreign companies may not be registered with the U.S. Securities and Exchange Commission
(the “SEC”) and foreign companies are generally not subject to the same level of regulatory controls imposed on U.S. issuers
and, as a consequence, there is generally less publicly available information about foreign securities than is available about domestic
securities. Income from foreign securities owned by the Fund may be reduced by a withholding tax at the source, which tax would reduce
income received from the securities comprising the Fund’s portfolio. Foreign securities may also be more difficult to value than
securities of U.S. issuers and foreign markets and securities may be less liquid. In addition, periodic U.S. Government restrictions on
investments in issuers from certain foreign countries may require the Fund to sell such investments at inopportune times, which could
result in losses to the Fund. In addition, periodic U.S. Government restrictions on investments in issuers from certain foreign countries
may require the Fund to sell such investments at inopportune times, which could result in losses to the Fund.

 

Foreign Currency Risk – Currency risk
is the risk that foreign currencies will decline in value relative to the U.S. dollar, in which case the dollar value of the Fund’s
investments in securities denominated in, and/or receiving revenues in, foreign currencies, would be adversely affected.

 

Geographic Focus Risk – To the extent
that it focuses its investments in a particular country or geographic region, the Fund may be more susceptible to economic, political,
regulatory or other events or conditions affecting issuers and countries within that country or geographic region. As a result, the Fund
may be subject to greater price volatility and risk of loss than a fund holding more geographically diverse investments.

 

Risk of Investing in China – The Chinese
economy is generally considered an emerging market and can be significantly affected by economic and political conditions and policy in
China and surrounding Asian countries. A relatively small number of Chinese companies represents a large portion of China’s total
market and thus may be more sensitive to adverse political or economic circumstances and market movements. The economy of China differs,
often unfavorably, from the U.S. economy in such respects as structure, general development, government involvement, wealth distribution,
rate of inflation, growth rate, allocation of resources and capital reinvestment, among others. Under China’s political and economic
system, the central government has historically exercised substantial control over virtually every sector of the Chinese economy through
administrative regulation and/or state ownership. In addition, expropriation, including nationalization, confiscatory taxation, political,
economic or social instability or other developments could adversely affect and significantly diminish the values of the Chinese companies
in which the Fund invests. The Fund may invest in shares of Chinese companies traded on stock markets in China or Hong Kong. These stock
markets have recently experienced high levels of volatility, which may continue in the future. The Hong Kong stock market may behave differently
from the China stock markets and there may be little to no correlation between the performance of the Hong Kong stock market and the China
stock markets.

 

Stock Connect Investing Risk – Trading
through Stock Connect is subject to a number of restrictions that may affect the Fund’s investments and returns. For example, trading
through Stock Connect is subject to daily quotas that limit the maximum daily net purchases on any particular day, which may restrict
or preclude the Fund’s ability to invest in China A Shares through Stock Connect. In addition, investments made through Stock Connect
are subject to trading, clearance and settlement procedures that are relatively untested, which could pose risks to the Fund. Moreover,
China A Shares purchased through Stock Connect generally may not be sold, purchased or otherwise transferred other than through Stock
Connect in accordance with applicable rules. A primary feature of Stock Connect is the application of the home market’s laws and
rules applicable to investors in China A Shares. Therefore, the Fund’s investments in China A Shares purchased through Stock Connect
are generally subject to Chinese securities regulations and listing rules, among other restrictions. While overseas investors currently
are exempt from paying capital gains or value added taxes on income and gains from investments in China A Shares purchased through Stock
Connect, these tax rules could be changed, which could result in unexpected tax liabilities for the Fund. Stock Connect will only operate
on days when both the China and Hong Kong markets are open for trading and when banks in both markets are open on the corresponding settlement
days. There may be occasions when the Fund may be subject to the risk of price fluctuations of China A Shares during the time when Stock
Connect is not trading. Stock Connect is a relatively new program. Further developments are likely and there can be no assurance as to
the program’s continued existence or whether future developments regarding the program may restrict or adversely affect the Fund’s
investments or returns. In addition, the application and interpretation of the laws and regulations of Hong Kong and China, and the rules,
policies or guidelines published or applied by relevant regulators and exchanges in respect of Stock Connect are uncertain, and they may
have a detrimental effect on the Fund’s investments and returns.

 

Large Capitalization Risk – The risk
that larger, more established companies may be unable to respond quickly to new competitive challenges such as changes in technology and
consumer tastes. Larger companies also may not be able to attain the high growth rates of successful smaller companies.

 

Small and Medium Capitalization Risk
The risk that small and medium capitalization companies in which the Fund may invest may be more vulnerable to adverse business or economic
events than larger, more established companies. In particular, small and medium capitalization companies may have limited product lines,
markets and financial resources and may depend upon a relatively small management group. Therefore, small capitalization and medium capitalization
stocks may be more volatile than those of larger companies. Small capitalization and medium capitalization stocks may be traded OTC. OTC
stocks may trade less frequently and in smaller volume than exchange listed stocks and may have more price volatility than that of exchange-listed
stocks.

 

Depositary Receipts Risk – While ADRs
provide an alternative to directly purchasing the underlying foreign securities in their respective national markets and currencies, investments
in ADRs continue to be subject to many of the risks associated with investing directly in foreign securities. Investments in ADRs may
be less liquid and more volatile than the underlying securities in their primary trading market. If an ADR is denominated in a different
currency than its underlying securities, the Fund will be subject to the currency risk of both the investment in the ADR and the underlying
security. Holders of ADRs may have limited or no rights to take action with respect to the underlying securities or to compel the issuer
of the receipts to take action. The prices of ADRs may differ from the prices of securities upon which they are based.

 

Active Management Risk – The Fund is
subject to the risk that the Adviser’s or the Sub-Adviser’s judgments about the attractiveness, value, or potential appreciation
of the Fund’s investments may prove to be incorrect. If the investments selected and strategies employed by the Fund fail to produce
the intended results, the Fund could underperform in comparison to its benchmark index or other funds with similar objectives and investment
strategies.

 

New Adviser Risk – The Adviser is a
newly registered investment adviser and has not previously managed a mutual fund. As a result, there is no long-term track record against
which an investor may judge the Adviser and it is possible the Adviser may not achieve the Fund’s intended investment objective.

 

New Fund Risk – Because the Fund is new,
investors in the Fund bear the risk that the Fund may not be successful in implementing its investment strategy, may not employ a successful
investment strategy, or may fail to attract sufficient assets under management to realize economies of scale, any of which could result
in the Fund being liquidated at any time without shareholder approval and at a time that may not be favorable for all shareholders. Such
liquidation could have negative tax consequences for shareholders and will cause shareholders to incur expenses of liquidation.

 

Value Style Risk – The Adviser’s
and the Sub-Adviser’s value investment style may increase the risks of investing in the Fund. If the Adviser’s or the Sub-Adviser’s
assessment of market conditions, or a company’s value or prospects for exceeding earnings expectations is inaccurate, the Fund could
suffer losses or produce poor performance relative to other funds. In addition, “value stocks” can continue to be undervalued
by the market for long periods of time.

 

Market Risk – The prices of and the income
generated by the Fund’s securities may decline in response to, among other things, investor sentiment, general economic and market
conditions, regional or global instability, and currency and interest rate fluctuations. In addition, the impact of any epidemic, pandemic
or natural disaster, or widespread fear that such events may occur, could negatively affect the global economy, as well as the economies
of individual countries, the financial performance of individual companies and sectors, and the markets in general in significant and
unforeseen ways. Any such impact could adversely affect the prices and liquidity of the securities and other instruments in which the
Fund invests, which in turn could negatively impact the Fund’s performance and cause losses on your investment in the Fund. Market
risk may affect a single issuer, an industry, a sector or the equity or bond market as a whole.

 

Performance Information

 

The Fund is new, and therefore has no performance
history. Once the Fund has completed a full calendar year of operations, a bar chart and table will be included that will provide some
indication of the risks of investing in the Fund by showing the variability of the Fund’s returns and comparing the Fund’s
performance to a broad measure of market performance. Of course, the Fund’s past performance (before and after taxes) does not necessarily
indicate how the Fund will perform in the future and does not guarantee future results.

 

Updated performance information is available on the
Fund’s websites at Perpetual.com and BarrowHanley.com or by calling toll-free to [____].

 

Investment Advisers

 

Perpetual US Services LLC, doing business as PGIA serves as
investment adviser to the Fund. Barrow Hanley serves as investment sub-adviser to the Fund and is responsible for the management of the Fund’s portfolio of securities. Each of the investment adviser and the investment sub-adviser
is a subsidiary of Perpetual Limited, an Australian Stock Exchange-listed, diversified financial services company.

 

Portfolio Managers

 

Randolph Wrighton, Jr., CFA, Senior Managing Director,
Equity Portfolio Manager and Analyst at Barrow Hanley has managed the Fund since its inception in 2021.

 

Sherry Zhang, CFA-Managing Director, Equity Portfolio
Manager and Analyst at Barrow Hanley has managed the Fund since its inception in 2021.

 

David Feygenson, Director, Equity Portfolio Manager
and Analyst at Barrow Hanley has managed the Fund since its inception in 2021.

 

For important information about the purchase and
sale of Fund shares, taxes and financial intermediary compensation, please turn to “Summary Information about the Purchase and Sale
of Fund Shares, Taxes and Financial Intermediary Compensation” on page [____] of the prospectus.

 

BARROW HANLEY INTERNATIONAL VALUE FUND

 

Investment Objective

 

The Barrow Hanley International Value Fund (the “International
Value Fund” or the “Fund”) seeks to obtain higher returns compared to the MSCI EAFE Index, while maintaining lower risk.

 

Fund Fees and Expenses

 

This table describes the fees and expenses that you
may pay if you buy and hold shares of the Fund. You may be required to pay commissions and/or other forms of compensation to a broker
for transactions in I Shares, which are not reflected in the table or the example below.

 

Shareholder Fees (fees paid directly from your investment)

Redemption Fee (as a percentage of amount redeemed, if shares redeemed have been held for less than 30 days) 1.00%

 

Annual Fund Operating Expenses (expenses that you pay each year as a
percentage of the value of your investment)

  I Shares Y Shares
Management Fees   0.66%   0.66%
Other Expenses   1.12%%   1.27%
Shareholder Servicing Fees None   0.15%  
Other Operating Expenses1 1.12%   1.12%  
Total Annual Fund Operating Expenses   1.78%   1.93%
Less Fee Reductions and/or Expense Reimbursements2   (0.92)%   (0.92)%
Total Annual Fund Operating Expenses After Fee Reductions and/or Expense Reimbursements   0.86%   1.01%

 

1 Other Operating Expenses are based on estimated amounts for the current fiscal year.
2 Perpetual US Services LLC, doing business as PGIA (the “Adviser” or
“Perpetual-PGIA”) has contractually agreed to waive fees and reimburse expenses to the extent necessary to keep Total Annual
Fund Operating Expenses (excluding interest, taxes, brokerage commissions and other costs and expenses relating to the securities
that are purchased and sold by the Fund, shareholder servicing fees, acquired fund fees and expenses, other expenditures which are
capitalized in accordance with generally accepted accounting principles and other non-routine expenses, such as litigation
(collectively, “excluded expenses”)) from exceeding 0.86% of the Fund’s average daily net assets until February
28, 2023 (the “contractual expense limit”). In addition, the Adviser may receive from the Fund the difference between
the Total Annual Fund Operating Expenses (not including excluded expenses) and the contractual expense limit to recoup all or a
portion of its prior fee waivers or expense reimbursements made during the rolling three-year period preceding the date of the
recoupment if at any point Total Annual Fund Operating Expenses (not including excluded expenses) are below the contractual expense
limit (i) at the time of the fee waiver and/or expense reimbursement and (ii) at the time of the recoupment. This agreement will
terminate automatically upon the termination of the Fund’s investment advisory agreement and may be terminated: (i) by the
Board of Trustees (the “Board”) of The Advisors’ Inner Circle Fund III (the “Trust”), for any reason
at any time; or (ii) by the Adviser, upon ninety (90) days’ prior written notice to the Trust, effective as of the close of
business on February 28, 2023.

 

Example

 

This Example is intended to help you compare the cost
of investing in the Fund with the cost of investing in other mutual funds.

 

The Example assumes that you invest $10,000 in the
Fund for the time periods indicated and then redeem all of your shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund’s operating expenses (including capped expenses for the period described
in the footnote to the fee table) remain the same. Although your actual costs may be higher or lower, based on these assumptions your
costs would be:

 

  1 Year 3 Years
I Shares $88 $435
Y Shares $103 $481

 

Portfolio Turnover

 

The Fund pays transaction costs, such as commissions,
when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in total annual
Fund operating expenses or in the example, affect the Fund’s performance. Because the Fund has not commenced operations as of the
date of this prospectus, it does not have portfolio turnover information to report.

 

Principal Investment Strategies

 

Under normal circumstances, the Fund invests in at
least three countries, and invests at least 40% of its total assets in securities of non-U.S. companies. If conditions are not favorable,
the Fund will invest at least 30% of its total assets in securities of non-U.S. companies. The Fund considers a company to be a non-U.S.
company if: (i) at least 50% of the company’s assets are located outside of the U.S.; (ii) at least 50% of the company’s revenue
is generated outside of the U.S.; (iii) the company is organized or maintains its principal place of business outside of the U.S.; or
(iv) the company’s securities are traded principally outside of the U.S.

 

The Fund invests principally in common stock and American
Depositary Receipts (“ADRs”). Barrow, Hanley, Mewhinney & Strauss, LLC’s (the “Sub-Adviser” or “Barrow
Hanley”), the Fund’s sub-adviser, seeks to invest in companies that are temporarily undervalued for reasons Barrow Hanley
can identify, understand, and believe will improve over time. In addition to valuation, Barrow Hanley typically also looks for companies
with what Barrow Hanley believes are stronger than average balance sheets, attractive but sustainable dividend yields, temporarily depressed
profitability, and stable-to-improving operating fundamentals. Barrow Hanley expects that the price-to-earnings and price-to-book ratios
of the Fund’s aggregate portfolio typically will be lower than the broad market while simultaneously delivering an opportunity for
what Barrow Hanley believes is attractive dividend yield.

 

Barrow Hanley pursues a value-oriented strategy
and strives to construct a portfolio of securities, selected on a bottom-up basis, that trade at levels below the MSCI EAFE Index
across certain metrics, such as price/earnings (on normalized earnings), price to book, enterprise value to free cash flow and
enterprise value to sales ratios, while simultaneously providing dividend yield above the MSCI EAFE Index. Barrow Hanley’s
International Value team employs a two-stage process – incorporating both quantitative and qualitative elements – to manage their
investment research effort. Initially, the team uses a valuation based, quantitative screen to narrow down a broad universe of
approximately 3,800 ex-US stocks to a universe of approximately 150-200 stocks (the “guidance list”) that appear to
Barrow Hanley to have attractive valuations and also exhibit stable to improving operating fundamentals, strong operating cash flow,
and a responsible balance sheet. This guidance list serves as the beginning of Barrow Hanley’s research team’s
qualitative assessment. The research team further refines the guidance list using sector-specific criteria (including, capital
ratios for financials, price-to-net asset value metrics for energy, and other metrics), ultimately focusing on ideas that Barrow
Hanley believes are compelling opportunities. In the fundamental stage of the investment process, the responsible analyst(s)
conducts stock-specific research on each company of interest., including interviews with company management.

 

Principal Risks

 

As with all mutual funds, there is no guarantee that
the Fund will achieve its investment objective. You could lose money by investing in the Fund. A Fund share is not a bank deposit and
it is not insured or guaranteed by the FDIC or any other government agency.
The principal risk factors affecting shareholders’
investments in the Fund are set forth below.

 

Equity Risk – Since it purchases equity
securities, the Fund is subject to the risk that stock prices may fall over short or extended periods of time. Historically, the equity
market has moved in cycles, and the value of the Fund’s securities may fluctuate from day to day. Individual companies may report
poor results or be negatively affected by industry and/or economic trends and developments. The prices of securities issued by such companies
may suffer a decline in response. These factors contribute to price volatility. Common stock is generally subordinate to preferred stock
and debt securities with respect to the payment of dividends and upon the liquidation or bankruptcy of the issuing company.

 

Emerging Markets Securities Risk – The
Fund’s investments in emerging markets securities are considered speculative and subject to heightened risks in addition to the
general risks of investing in foreign securities. Unlike more established markets, emerging markets may have governments that are less
stable, markets that are less liquid and economies that are less developed. In addition, the securities markets of emerging market countries
may consist of companies with smaller market capitalizations and may suffer periods of relative illiquidity; significant price volatility;
restrictions on foreign investment; and possible restrictions on repatriation of investment income and capital. Furthermore, foreign investors
may be required to register the proceeds of sales, and future economic or political crises could lead to price controls, forced mergers,
expropriation or confiscatory taxation, seizure, nationalization or creation of government monopolies. Due to the differences in the nature and quality of financial information of issuers of emerging market securities, including auditing
and financial reporting standards, financial information and disclosures about such issuers may be unavailable or, if made available,
may be considerably less reliable than publicly available information about other foreign securities.

 

Custody Risk – Custody risk refers to
the risks inherent in the process of clearing and settling trades and to the holding of securities, cash and other assets by local banks,
agents and depositories. Low trading volumes and volatile prices in less developed markets make trades harder to complete and settle,
and governments or trade groups may compel local agents to hold securities in designated depositories that may not be subject to independent
evaluation. Communications between the U.S. and emerging market countries may be unreliable, increasing the risk of delayed settlements
or losses of security certificates. Practices in relation to the settlement of securities transactions in emerging markets involve higher
risks than those in developed markets. In addition, the laws of certain countries may put limits on the Fund’s ability to recover
its assets if a foreign bank or depository or issuer of a security or an agent of any of the foregoing goes bankrupt. The Fund would
absorb any loss resulting from such custody problems and may have no successful claim for compensation.

 

Foreign Company Risk – Investing in foreign
companies, including direct investments and investments through ADRs, poses additional risks since political and economic events unique
to a country or region will affect those markets and their issuers. These risks will not necessarily affect the U.S. economy or similar
issuers located in the United States. Securities of foreign companies may not be registered with the U.S. Securities and Exchange Commission
(the “SEC”) and foreign companies are generally not subject to the same level of regulatory controls imposed on U.S. issuers
and, as a consequence, there is generally less publicly available information about foreign securities than is available about domestic
securities. Income from foreign securities owned by the Fund may be reduced by a withholding tax at the source, which tax would reduce
income received from the securities comprising the Fund’s portfolio. Foreign securities may also be more difficult to value than
securities of U.S. issuers and foreign markets and securities may be less liquid. In addition, periodic U.S. Government restrictions on
investments in issuers from certain foreign countries may require the Fund to sell such investments at inopportune times, which could
result in losses to the Fund. In addition, periodic U.S. Government restrictions on investments in issuers from certain foreign countries
may require the Fund to sell such investments at inopportune times, which could result in losses to the Fund.

 

Foreign Currency Risk – Currency risk
is the risk that foreign currencies will decline in value relative to the U.S. dollar, in which case the dollar value of the Fund’s
investments in securities denominated in, and/or receiving revenues in, foreign currencies, would be adversely affected.

 

Geographic Focus Risk – To the extent
that it focuses its investments in a particular country or geographic region, the Fund may be more susceptible to economic, political,
regulatory or other events or conditions affecting issuers and countries within that country or geographic region. As a result, the Fund
may be subject to greater price volatility and risk of loss than a fund holding more geographically diverse investments.

 

Risk of Investing in China – The Chinese
economy is generally considered an emerging market and can be significantly affected by economic and political conditions and policy in
China and surrounding Asian countries. A relatively small number of Chinese companies represents a large portion of China’s total
market and thus may be more sensitive to adverse political or economic circumstances and market movements. The economy of China differs,
often unfavorably, from the U.S. economy in such respects as structure, general development, government involvement, wealth distribution,
rate of inflation, growth rate, allocation of resources and capital reinvestment, among others. Under China’s political and economic
system, the central government has historically exercised substantial control over virtually every sector of the Chinese economy through
administrative regulation and/or state ownership. In addition, expropriation, including nationalization, confiscatory taxation, political,
economic or social instability or other developments could adversely affect and significantly diminish the values of the Chinese companies
in which the Fund invests. The Fund may invest in shares of Chinese companies traded on stock markets in China or Hong Kong. These stock
markets have recently experienced high levels of volatility, which may continue in the future. The Hong Kong stock market may behave differently
from the China stock markets and there may be little to no correlation between the performance of the Hong Kong stock market and the China
stock markets.

 

Stock Connect Investing Risk – Trading
through Stock Connect is subject to a number of restrictions that may affect the Fund’s investments and returns. For example, trading
through Stock Connect is subject to daily quotas that limit the maximum daily net purchases on any particular day, which may restrict
or preclude the Fund’s ability to invest in China A Shares through Stock Connect. In addition, investments made through Stock Connect
are subject to trading, clearance and settlement procedures that are relatively untested, which could pose risks to the Fund. Moreover,
China A Shares purchased through Stock Connect generally may not be sold, purchased or otherwise transferred other than through Stock
Connect in accordance with applicable rules. A primary feature of Stock Connect is the application of the home market’s laws and
rules applicable to investors in China A Shares. Therefore, the Fund’s investments in China A Shares purchased through Stock Connect
are generally subject to Chinese securities regulations and listing rules, among other restrictions. While overseas investors currently
are exempt from paying capital gains or value added taxes on income and gains from investments in China A Shares purchased through Stock
Connect, these tax rules could be changed, which could result in unexpected tax liabilities for the Fund. Stock Connect will only operate
on days when both the China and Hong Kong markets are open for trading and when banks in both markets are open on the corresponding settlement
days. There may be occasions when the Fund may be subject to the risk of price fluctuations of China A Shares during the time when Stock
Connect is not trading. Stock Connect is a relatively new program. Further developments are likely and there can be no assurance as to
the program’s continued existence or whether future developments regarding the program may restrict or adversely affect the Fund’s
investments or returns. In addition, the application and interpretation of the laws and regulations of Hong Kong and China, and the rules,
policies or guidelines published or applied by relevant regulators and exchanges in respect of Stock Connect are uncertain, and they may
have a detrimental effect on the Fund’s investments and returns.

 

Large Capitalization Risk – The risk
that larger, more established companies may be unable to respond quickly to new competitive challenges such as changes in technology and
consumer tastes. Larger companies also may not be able to attain the high growth rates of successful smaller companies.

 

Small and Medium Capitalization Risk
The risk that small and medium capitalization companies in which the Fund may invest may be more vulnerable to adverse business or economic
events than larger, more established companies. In particular, small and medium capitalization companies may have limited product lines,
markets and financial resources and may depend upon a relatively small management group. Therefore, small capitalization and medium capitalization
stocks may be more volatile than those of larger companies. Small capitalization and medium capitalization stocks may be traded OTC. OTC
stocks may trade less frequently and in smaller volume than exchange listed stocks and may have more price volatility than that of exchange-listed
stocks.

 

Depositary Receipts Risk – While ADRs
provide an alternative to directly purchasing the underlying foreign securities in their respective national markets and currencies, investments
in ADRs continue to be subject to many of the risks associated with investing directly in foreign securities. Investments in ADRs may
be less liquid and more volatile than the underlying securities in their primary trading market. If an ADR is denominated in a different
currency than its underlying securities, the Fund will be subject to the currency risk of both the investment in the ADR and the underlying
security. Holders of ADRs may have limited or no rights to take action with respect to the underlying securities or to compel the issuer
of the receipts to take action. The prices of ADRs may differ from the prices of securities upon which they are based.

 

Active Management Risk – The Fund is
subject to the risk that the Adviser’s or the Sub-Adviser’s judgments about the attractiveness, value, or potential appreciation
of the Fund’s investments may prove to be incorrect. If the investments selected and strategies employed by the Fund fail to produce
the intended results, the Fund could underperform in comparison to its benchmark index or other funds with similar objectives and investment
strategies.

 

New Adviser Risk – The Adviser is a
newly registered investment adviser and has not previously managed a mutual fund. As a result, there is no long-term track record against
which an investor may judge the Adviser and it is possible the Adviser may not achieve the Fund’s intended investment objective.

 

New Fund Risk – Because the Fund is new,
investors in the Fund bear the risk that the Fund may not be successful in implementing its investment strategy, may not employ a successful
investment strategy, or may fail to attract sufficient assets under management to realize economies of scale, any of which could result
in the Fund being liquidated at any time without shareholder approval and at a time that may not be favorable for all shareholders. Such
liquidation could have negative tax consequences for shareholders and will cause shareholders to incur expenses of liquidation.

 

Value Style Risk – The Adviser’s
and the Sub-Adviser’s value investment style may increase the risks of investing in the Fund. If the Adviser’s or the Sub-Adviser’s
assessment of market conditions, or a company’s value or prospects for exceeding earnings expectations is inaccurate, the Fund could
suffer losses or produce poor performance relative to other funds. In addition, “value stocks” can continue to be undervalued
by the market for long periods of time.

 

Market Risk – The prices of and the income
generated by the Fund’s securities may decline in response to, among other things, investor sentiment, general economic and market
conditions, regional or global instability, and currency and interest rate fluctuations. In addition, the impact of any epidemic, pandemic
or natural disaster, or widespread fear that such events may occur, could negatively affect the global economy, as well as the economies
of individual countries, the financial performance of individual companies and sectors, and the markets in general in significant and
unforeseen ways. Any such impact could adversely affect the prices and liquidity of the securities and other instruments in which the
Fund invests, which in turn could negatively impact the Fund’s performance and cause losses on your investment in the Fund. Market
risk may affect a single issuer, an industry, a sector or the equity or bond market as a whole.

 

Performance Information

 

The Fund is new, and therefore has no performance
history. Once the Fund has completed a full calendar year of operations, a bar chart and table will be included that will provide some
indication of the risks of investing in the Fund by showing the variability of the Fund’s returns and comparing the Fund’s
performance to a broad measure of market performance. Of course, the Fund’s past performance (before and after taxes) does not necessarily
indicate how the Fund will perform in the future and does not guarantee future results.

 

Updated performance information is available on the
Fund’s websites at Perpetual.com and BarrowHanley.com or by calling toll-free to [____].

 

Investment Advisers

 

Perpetual US Services LLC, doing business as PGIA serves as
investment adviser to the Fund. Barrow Hanley serves as investment sub-adviser to the Fund and is responsible for the management of the Fund’s portfolio of securities. Each of the investment adviser and the investment sub-adviser
is a subsidiary of Perpetual Limited, an Australian Stock Exchange-listed, diversified financial services company.

 

Portfolio Managers

 

Randolph Wrighton, Jr., CFA, Senior Managing Director,
Equity Portfolio Manager and Analyst at Barrow Hanley has managed the Fund since its inception in 2021.

 

TJ Carter, CFA, CPA, Managing Director, Equity Portfolio
Manager and Analyst at Barrow Hanley has managed the Fund since its inception in 2021.

 

For important information about the purchase and
sale of Fund shares, taxes and financial intermediary compensation, please turn to “Summary Information about the Purchase and Sale
of Fund Shares, Taxes and Financial Intermediary Compensation” on page [____] of the prospectus.

 

Summary Information about the Purchase and Sale
of Fund Shares, Taxes and Financial Intermediary Compensation

 

Purchase and Sale of Fund Shares

 

You may generally purchase or redeem shares on any
day that the New York Stock Exchange (“NYSE”) is open for business.

 

To purchase I Shares of a Fund for the first time,
you must invest at least $500,000.

 

To purchase Y Shares of a Fund for the first time,
you must invest at least $2,500.

 

Subsequent investments must be made in amounts of
at least $50. The Funds may accept investments of smaller amounts in their sole discretion.

 

If you own your shares directly, you may redeem your
shares by contacting the Funds directly by mail at: Perpetual Funds, PO Box 588, Portland, ME 04112 (Express Mail Address: Perpetual
Funds c/o Atlantic Shareholder Services, LLC, Three Canal Plaza, Ground Floor, Portland, ME 04101) or telephone at [Telephone].

 

If you own your shares through an account with a broker
or other financial intermediary, contact that broker or financial intermediary to redeem your shares. Your broker or financial intermediary
may charge a fee for its services in addition to the fees charged by the Funds.

 

Tax Information

 

Each Fund intends to make distributions that may be
taxed as ordinary income or capital gains, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or IRA,
in which case your distribution will be taxed when withdrawn from the tax-deferred account.

 

Payments to Broker-Dealers and Other Financial Intermediaries

 

If you purchase shares of a Fund through a broker-dealer
or other financial intermediary (such as a bank), such Fund and its related companies may pay the intermediary for the sale of Fund shares
and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your
salesperson to recommend a Fund over another investment. Ask your salesperson or visit your financial intermediary’s web site for
more information.

 

More Information about the Funds’ Investment
Objectives and Strategies

 

The investment objective of the Emerging Markets Value
Fund is to seek long term capital appreciation and consistent income from dividends, and the investment objective of the International
Value Fund is to seek higher returns compared the MSCI EAFE Index, while maintaining lower risk. The investment objective of each Fund
is not a fundamental policy and may be changed by the Board without shareholder approval.

 

The investments and strategies described in this prospectus
are those that each Fund uses under normal conditions. During current or anticipated unusual economic or market conditions, or for temporary
defensive or liquidity purposes, each Fund may, but is not obligated to, invest up to 100% of its assets in money market instruments and
other cash equivalents that would not ordinarily be consistent with its investment objective. If a Fund invests in this manner, it may
cause such Fund to forgo greater investment returns for the safety of principal and the Fund may therefore not achieve its investment
objective.

 

This prospectus describes each Fund’s principal
investment strategies. In addition to the securities and other investments and strategies described in this prospectus, each Fund also
may invest to a lesser extent in other securities, use other strategies and engage in other investment practices that are not part of
its principal investment strategies. These investments and strategies, as well as those described in this prospectus, are described in
detail in the Funds’ Statement of Additional Information (“SAI”) (for information on how to obtain a copy of the SAI
see the back cover of this prospectus). Of course, there is no guarantee that a Fund will achieve its investment goals.

 

More Information about Risk

 

Investing in each Fund involves risk and there is
no guarantee that a Fund will achieve its goals. The Adviser’s and the Sub-Adviser’s judgments about the markets, the economy,
or companies may not anticipate actual market movements, economic conditions or company performance, and these judgments may affect the
return on your investment. In fact, no matter how good of a job the Adviser or the Sub-Adviser does, you could lose money on your investment
in a Fund, just as you could with similar investments.

 

The value of your investment in a Fund is based on
the value of the securities the Fund holds. These prices change daily due to economic and other events that affect particular companies
and other issuers. These price movements, sometimes called volatility, may be greater or lesser depending on the types of securities a
Fund owns and the markets in which they trade. The effect on a Fund of a change in the value of a single security will depend on how widely
the Fund diversifies its holdings.

 

Active Management Risk (Both Funds)
Each Fund is subject to the risk that the Adviser’s or the Sub-Adviser’s judgments about the attractiveness, value, or potential
appreciation of the Fund’s investments may prove to be incorrect. If the investments selected and strategies employed by a Fund
fail to produce the intended results, the Fund could underperform in comparison to other funds with similar objectives and investment
strategies.

 

Custody Risk (Both Funds) – Custody
risk refers to the risks inherent in the process of clearing and settling trades and to the holding of securities, cash and other assets
by local banks, agents and depositories. Low trading volumes and volatile prices in less developed markets make trades harder to complete
and settle, and governments or trade groups may compel local agents to hold securities in designated depositories that may not be subject
to independent evaluation. Local agents are held only to the standards of care of their local markets, and thus may be subject to limited
or no government oversight. Communications between the U.S. and emerging market countries may be unreliable, increasing the risk of delayed
settlements or losses of security certificates. In general, the less developed a country’s securities market is, the greater the
likelihood of custody problems. Practices in relation to the settlement of securities transactions in emerging markets involve higher
risks than those in developed markets, in part because of the use of brokers and counterparties that are often less well capitalized,
and custody and registration of assets in some countries may be unreliable. The possibility of fraud, negligence or undue influence being
exerted by the issuer or refusal to recognize ownership exists in some emerging markets, and, along with other factors, could result
in ownership registration being lost. In addition, the laws of certain countries may put limits on a Fund’s ability to recover
its assets if a foreign bank or depository or issuer of a security or an agent of any of the foregoing goes bankrupt. A Fund would absorb
any loss resulting from such custody problems and may have no successful claim for compensation.

 

Depositary Receipts Risk (Both Funds)
ADRs are typically trust receipts issued by a U.S. bank or trust company that evidence an indirect interest in underlying securities issued
by a foreign entity. GDRs, EDRs, and other types of Depositary Receipts are typically issued by non-U.S. banks or financial institutions
to evidence an interest in underlying securities issued by either a U.S. or a non-U.S. entity. Investments in non-U.S. issuers through
ADRs generally involve risks applicable to other types of investments in non-U.S. issuers. Investments in ADRs may be less liquid and
more volatile than the underlying securities in their primary trading market. If an ADR is denominated in a different currency than its
underlying securities, a Fund will be subject to the currency risk of both the investment in the ADR and the underlying security. The
values of ADRs may decline for a number of reasons relating to the issuers or sponsors of the ADRs, including, but not limited to, insolvency
of the issuer or sponsor. Holders of ADRs may have limited or no rights to take action with respect to the underlying securities or to
compel the issuer of the receipts to take action. The prices of ADRs may differ from the prices of securities upon which they are based.
In addition, there is risk involved in investing in unsponsored ADRs, as there may be less information available about the underlying
issuer than there is about an issuer of sponsored ADRs and the prices of unsponsored ADRs may be more volatile than those of sponsored
ADRs.

 

Equity Risk (Both Funds) – Equity securities
include common stocks and shares of ADRs. Common stock represents an equity or ownership interest in an issuer. Investments in equity
securities in general are subject to market risks that may cause their prices to fluctuate over time. Fluctuations in the value of equity
securities in which a Fund invests will cause the Fund’s net asset value (“NAV”) to fluctuate. An investment in a portfolio
of equity securities may be more suitable for long-term investors who can bear the risk of these share price fluctuations.

 

Foreign Currency Risk (Both Funds)
Fluctuations in exchange rates between the U.S. dollar and foreign currencies, or between various foreign currencies, may negatively affect
a Fund’s performance. Adverse changes in exchange rates may erode or reverse any gains produced by foreign-currency denominated
investments and may widen any losses. Currency exchange rates can be volatile and can be affected by, among other factors, the actions
or inactions by U.S. or foreign governments, central banks or supranational entities, the imposition of currency controls, speculation,
or general economic or political developments in the U.S. or a foreign country.

 

Foreign Securities/Emerging Markets Risk (Both
Funds)
– Investments in securities of foreign companies (including direct investments as well as investments through ADRs) can
be more volatile than investments in U.S. companies. Diplomatic, political, or economic developments, including nationalization or appropriation,
could affect investments in foreign companies. Foreign securities markets generally have less trading volume and less liquidity than U.S.
markets. In addition, the value of securities denominated in foreign currencies, and of dividends from such securities, can change significantly
when foreign currencies strengthen or weaken relative to the U.S. dollar. Financial statements of foreign issuers are governed by different
accounting, auditing, and financial reporting standards than the financial statements of U.S. issuers and may be less transparent and
uniform than in the United States. Thus, there may be less information publicly available about foreign issuers than about most U.S. issuers.
Transaction costs are generally higher than those in the United States and expenses for custodial arrangements of foreign securities may
be somewhat greater than typical expenses for custodial arrangements of similar U.S. securities. Some foreign governments levy withholding
taxes against dividend and interest income. Although in some countries a portion of these taxes are recoverable, the non-recovered portion
will reduce the income received from the securities comprising a Fund’s portfolio. Additionally, periodic U.S. Government restrictions
on investments in issuers from certain foreign countries may result in a Fund having to sell such prohibited securities at inopportune
times. Such prohibited securities may have less liquidity as a result of such U.S. Government designation and the market price of such
prohibited securities may decline, which may cause the Fund to incur losses. These risks may be heightened with respect to emerging market
countries since political turmoil and rapid changes in economic conditions are more likely to occur in these countries. Additionally,
periodic U.S. Government restrictions on investments in issuers from certain foreign countries may result in a Fund having to sell such
prohibited securities at inopportune times. Such prohibited securities may have less liquidity as a result of such U.S. Government designation
and the market price of such prohibited securities may decline, which may cause the Fund to incur losses.

 

Geographic Focus Risk (Both Funds)
To the extent that it focuses its investments in a particular country or geographic region, a Fund may be more susceptible to economic,
political, regulatory or other events or conditions affecting issuers and countries within that country or geographic region. As a result,
the Fund may be subject to greater price volatility and risk of loss than a fund holding more geographically diverse investments.

 

Large Capitalization Risk (Both Funds)
If valuations of large capitalization companies appear to be greatly out of proportion to the valuations of small or medium capitalization
companies, investors may migrate to the stocks of small and medium-sized companies. Additionally, larger, more established companies may
be unable to respond quickly to new competitive challenges such as changes in technology and consumer tastes. Larger companies also may
not be able to attain the high growth rates of successful smaller companies.

 

Market Risk (Both Funds) – The risk that
the market value of an investment may move up and down, sometimes rapidly and unpredictably. A Fund’s NAV per share will fluctuate
with the market prices of its portfolio securities. Market risk may affect a single issuer, an industry, a sector or the equity or bond
market as a whole. Markets for securities in which a Fund invests may decline significantly in response to adverse issuer, political,
regulatory, market, economic or other developments that may cause broad changes in market value, public perceptions concerning these developments,
and adverse investor sentiment or publicity. Similarly, the impact of any epidemic, pandemic or natural disaster, or widespread fear that
such events may occur, could negatively affect the global economy, as well as the economies of individual countries, the financial performance
of individual companies and sectors, and the markets in general in significant and unforeseen ways. Any such impact could adversely affect
the prices and liquidity of the securities and other instruments in which a Fund invests, which in turn could negatively impact the Fund’s
performance and cause losses on your investment in the Fund. Recent examples include pandemic risks related to COVID-19 and aggressive
measures taken worldwide in response by governments, including closing borders, restricting international and domestic travel, and the
imposition of prolonged quarantines of large populations, and by businesses, including changes to operations and reducing staff. The impact
of the COVID-19 pandemic may be short term or may last for an extended period of time, and in either case could result in a substantial
economic downturn or recession.

 

Risk of Investing in China (Both Funds) –
The economy of China differs, often unfavorably, from the U.S. economy in such respects as structure, general development, government
involvement, wealth distribution, rate of inflation, growth rate, allocation of resources and capital reinvestment, among others. Under
China’s political and economic system, the central government has historically exercised substantial control over virtually every
sector of the Chinese economy through administrative regulation and/or state ownership. Since 1978, the Chinese government has been, and
is expected to continue, reforming its economic policies, which has resulted in less direct central and local government control over
the business and production activities of Chinese enterprises and companies. Notwithstanding the economic reforms instituted by the Chinese
government and the Chinese Communist Party, actions of the Chinese central and local government authorities continue to have a substantial
effect on economic conditions in China, which could affect the public and private sector companies in which a Fund invests. In the past,
the Chinese government has from time to time taken actions that influence the prices at which certain goods may be sold, encourage companies
to invest or concentrate in particular industries, induce mergers between companies in certain industries and induce private companies
to publicly offer their securities to increase or continue the rate of economic growth, control the rate of inflation or otherwise regulate
economic expansion. It may do so in the future as well. Such actions and a variety of other centrally planned or determined activities
by the Chinese government could have a significant adverse effect on economic conditions in China, the economic prospects for, and the
market prices and liquidity of, the securities of Chinese companies and the payments of dividends and interest by Chinese companies. In
addition, expropriation, including nationalization, confiscatory taxation, political, economic or social instability or other developments
could adversely affect and significantly diminish the values of the Chinese companies in which a Fund invests. A Fund may invest in shares
of Chinese companies traded on stock markets in China or Hong Kong. These stock markets have recently experienced high levels of volatility,
which may continue in the future. The Hong Kong stock market may behave differently from the China stock markets and there may be little
to no correlation between the performance of the Hong Kong stock market and the China stock markets.

 

In addition, periodically there may be restrictions
on investments in Chinese companies. For example, on November 12, 2020, the President of the United States signed an Executive Order prohibiting
U.S. persons from purchasing or investing in publicly-traded securities of companies identified by the U.S. Government as “Communist
Chinese military companies” or in instruments that are derivative of, or are designed to provide investment exposure to, those companies.
The universe of affected securities can change from time to time. As a result of an increase in the number of investors looking to sell
such securities, or because of an inability to participate in an investment that the Adviser or the Sub-Adviser otherwise believes is
attractive, a Fund may incur losses. Certain securities that are or become designated as prohibited securities may have less liquidity
as a result of such designation and the market price of such prohibited securities may decline, potentially causing losses to a Fund.
In addition, the market for securities of other Chinese-based issuers may also be negatively impacted, resulting in reduced liquidity
and price declines.

 

Small and Medium Capitalization Risk (Both Funds)
– Investing in equity securities of small and medium capitalization companies often involves greater risk than is customarily
associated with investments in larger capitalization companies. This increased risk may be due to the greater business risks of smaller
size companies, limited markets and financial resources, narrow product lines and the frequent lack of depth of management. Stock prices
of smaller companies may be based in substantial part on future expectations rather than current achievements. The securities of smaller
companies are often traded OTC and, even if listed on a national securities exchange, may not be traded in volumes typical for that exchange.
Consequently, the securities of smaller companies may be less liquid, may have limited market stability and may be subject to more severe,
abrupt or erratic market movements than securities of larger, more established companies or the market averages in general. Further, smaller
companies may have less publicly available information and, when available, it may be inaccurate or incomplete.

 

Stock Connect Investing Risk (Both Funds) –
Trading through Stock Connect is subject to a number of restrictions that may affect a Fund’s investments and returns. For example,
trading through Stock Connect is subject to daily quotas that limit the maximum daily net purchases on any particular day, which may restrict
or preclude a Fund’s ability to invest in China A Shares through Stock Connect. In addition, investments made through Stock Connect
are subject to trading, clearance and settlement procedures that are relatively untested, which could pose risks to a Fund. Moreover,
China A Shares purchased through Stock Connect generally may not be sold, purchased or otherwise transferred other than through Stock
Connect in accordance with applicable rules. A primary feature of Stock Connect is the application of the home market’s laws and
rules applicable to investors in China A Shares. Therefore, a Fund’s investments in China A Shares purchased through Stock Connect
are generally subject to Chinese securities regulations and listing rules, among other restrictions. While overseas investors currently
are exempt from paying capital gains or value added taxes on income and gains from investments in China A Shares purchased through Stock
Connect, these tax rules could be changed, which could result in unexpected tax liabilities for a Fund. Stock Connect will only operate
on days when both the China and Hong Kong markets are open for trading and when banks in both markets are open on the corresponding settlement
days. There may be occasions when a Fund may be subject to the risk of price fluctuations of China A Shares during the time when Stock
Connect is not trading. Stock Connect is a relatively new program. Further developments are likely and there can be no assurance as to
the program’s continued existence or whether future developments regarding the program may restrict or adversely affect a Fund’s
investments or returns. In addition, the application and interpretation of the laws and regulations of Hong Kong and China, and the rules,
policies or guidelines published or applied by relevant regulators and exchanges in respect of Stock Connect are uncertain, and they may
have a detrimental effect on a Fund’s investments and returns.

 

Fund purchases of China A Shares through Stock Connect
involve ownership rights that are exercised differently than those involved in U.S. securities markets. When a Fund buys a Shanghai Stock
Exchange-listed or Shenzhen Stock Exchange-listed stock through Stock Connect, the Fund is purchasing a security registered under the
name of the Hong Kong Securities Clearing Company Limited (“HKSCC”) that acts as a nominee holder for the beneficial owner
of the Shanghai Stock Exchange-listed or Shenzhen Stock Exchange-listed stock. A Fund as the beneficial owner of the Shanghai Stock Exchange-listed
or Shenzhen Stock Exchange-listed stock can exercise its rights through its nominee HKSCC. However, due to the indirect nature of holding
its ownership interest through a nominee holder, a Fund might encounter difficulty in exercising or timely exercising its rights as the
beneficial owner when trading through HKSCC under Stock Connect, and such difficulty may expose a Fund to risk of loss.

 

Value Style Risk (Both Funds) – The Adviser’s
and the Sub-Adviser’s value investment style may increase the risks of investing in the Funds. If the Adviser’s or the Sub-Adviser’s
assessment of market conditions, or a company’s value or prospects for exceeding earnings expectations is inaccurate, a Fund could
suffer losses or produce poor performance relative to other funds. In addition, “value stocks” can continue to be undervalued
by the market for long periods of time; such stocks may not perform as well as “growth stocks” or the stock market in general, and may be out of
favor with investors for varying periods of time.

 

Information about Portfolio Holdings

 

A description of the Funds’ policies and procedures
with respect to the circumstances under which the Funds disclose their portfolio holdings is available in the SAI. Each Fund will post
its holdings within 10 days of the end of each month on the internet at [BarrowHanley.com]. The portfolio holdings information placed
on the Funds’ website generally will remain there until replaced by new postings as described above.

 

Investment Adviser

 

Perpetual US Services LLC, doing business as
PGIA, a Delaware limited liability company organized in 2020, serves as the investment adviser to the Funds. The Adviser is
registered as an investment adviser under the Investment Advisers Act of 1940, as amended. The Adviser’s principal place of
business is 155 North Wacker Drive, Suite 4250, Chicago, Illinois 60606. As of [Date], the Adviser had approximately $[____] in assets
under management.

 

The Adviser makes investment decisions for each Fund
and continuously reviews, supervises and administers each Fund’s investment program. [In addition, the Adviser oversees Barrow,
Hanley, Mewhinney & Strauss, LLC (the “Sub-Adviser” or “Barrow Hanley”) to ensure the Sub-Adviser’s
compliance with the investment policies and guidelines of the Funds and monitors the Sub-Adviser’s adherence to its investment styles.]
The Board supervises the Adviser and the Sub-Adviser and establishes policies that the Adviser and the Sub-Adviser must follow in their
management activities. The Adviser pays the Sub-Adviser out of the advisory fees it receives from the Funds.

 

For its services to the Funds, the Adviser is entitled
to a fee, which is calculated daily and paid monthly, at the following annual rates based on the average daily net assets of each Fund:

 

Fund Advisory Fee Rate
Emerging Markets Value Fund 0.87%
International Value Fund 0.66%

 

For each Fund, the Adviser has contractually agreed
to waive fees and reimburse expenses to the extent necessary to keep total annual Fund operating expenses (excluding interest, taxes,
brokerage commissions and other costs and expenses relating to the securities that are purchased and sold by the Fund, shareholder servicing
fees, acquired fund fees and expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles
and other non-routine expenses, such as litigation (collectively, “excluded expenses”)) from exceeding certain levels as set
forth below until February 28, 2023 (each, a “contractual expense limit”). This agreement will terminate automatically upon
the termination of the Funds’ investment advisory agreement and may be terminated: (i) by the Board, for any reason at any time;
or (ii) by the Adviser, upon ninety (90) days’ prior written notice to the Trust, effective as of the close of business on February
28, 2023.

 

Contractual Expense Limits
Fund I Shares Y Shares
Emerging Markets Value Fund 0.99% 0.99%
International Value Fund 0.86% 0.86%

 

In addition, the Adviser may receive from a Fund the
difference between the total annual Fund operating expenses (not including excluded expenses) and the contractual expense limit to recoup
all or a portion of its prior fee waivers or expense reimbursements made during the rolling three-year period preceding the date of the
recoupment if at any point total annual Fund operating expenses (not including excluded expenses) are below the contractual expense limit
(i) at the time of the fee waiver and/or expense reimbursement and (ii) at the time of the recoupment.

 

A discussion regarding the basis for the Board’s
approval of the Funds’ investment advisory agreement will be available in the Funds’ first Annual or Semi-Annual Report to
Shareholders.

 

Investment Sub-Adviser

 

Barrow, Hanley, Mewhinney & Strauss, LLC, located
at 2200 Ross Avenue, 31st Floor, Dallas, TX 75201, serves as a sub-adviser to the Funds. Barrow Hanley, a Delaware limited liability company,
is registered as an investment adviser with the SEC and was founded in 1979. Barrow Hanley provides investment advisory services to large
institutional clients, mutual funds, employee benefit plans, endowments, foundations, limited liability companies and other institutions
and individuals. Barrow Hanley is an indirect subsidiary of Perpetual Limited, a public company listed on the Australian Stock Exchange.

 

Portfolio Managers

 

Randolph Wrighton, Jr., CFA, Senior Managing Director,
Equity Portfolio Manager and Analyst, serves as a portfolio manager of the Emerging Markets Value Fund and the International Value Fund.
Mr. Wrighton joined Barrow Hanley in 2005. Prior to Barrow Hanley, he worked as an associate at Deutsche Bank Securities and as an intern
analyst for both UTIMCO and New York based Perry Capital Management. He also served as a Captain in the U.S. Marine Corps from 1996-2000.
Mr. Wrighton began his investment career at Barrow Hanley as a research analyst covering the Industrials, Energy, and Technology sectors.
In 2006, Mr. Wrighton helped to lead the firm’s expansion into Non-U.S., Global and Emerging Market investment products. He is a
member of the CFA Society of Dallas-Fort Worth. Mr. Wrighton holds an MBA from the University of Texas and a BA in Economics from Vanderbilt
University.

 

Sherry Zhang, CFA, Managing Director, Equity Portfolio
Manager and Analyst, serves as a portfolio manager of the Emerging Markets Value Fund. Ms. Zhang joined Barrow Hanley in 2013 from Matthews
Asia, where she was responsible for the analysis and recommendation of Asian stocks across numerous economic sectors. Ms. Zhang’s investment
career includes analyst roles at Q Investments, ARC Communication, and Exxon Mobil Corporation. Her tenure at Q Investments included a
two-year residency in China, where she gained firsthand experience overseeing operating companies located in emerging market economies.
Ms. Zhang received her BBA in Finance, cum laude, as well as her MBA, from Baylor University.

 

David Feygenson, Director, Equity Portfolio Manager
and Analyst, serves as a portfolio manager of the Emerging Markets Value Fund. Mr. Feygenson joined Barrow Hanley in 2017 from VanEck
Global, where he was a senior analyst, covering emerging market equities. Prior to joining VanEck, Mr. Feygenson served as a portfolio
manager/senior analyst at Mirae Asset Global Investments, one of South Korea’s largest asset managers. His career also includes a research
position on the emerging markets team at Wellington Management Company. Mr. Feygenson earned a BS in Economics, magna cum laude, from
the Wharton School of the University of Pennsylvania and an MSc in Finance and Economics from the London School of Economics.

 

TJ Carter, CFA, CPA, Managing Director, Equity Portfolio
Manager and Analyst serves as a portfolio manager of the International Value Fund. Mr. Carter joined Barrow Hanley in 2014 from Kingstown
Capital Management, where he served as an analyst. His prior experience includes analyst positions at Outpoint Capital Management and
Highland Capital Management. Mr. Carter began his career at Deloitte & Touche, LLP. He received a BSBA from the University of Arkansas
and an MBA from Columbia Business School.

 

The SAI provides additional information about the
portfolio managers’ compensation, other accounts managed, and ownership of Fund shares.

 

Related Performance Data of the Sub-Adviser

 

The following tables give the related performance
of actual accounts (each, an “Account”), referred to as “a Composite,” managed by the Adviser that have investment
objectives, policies and strategies substantially similar to those of the Funds. The data illustrates the past performance of the Adviser
in managing substantially similar accounts. The data does not represent the performance of the Funds. Performance is historical
and does not represent the future performance of the Funds or of the Adviser.

 

The manner in which the performance was calculated
for the Composite differs from that of registered mutual funds such as the Funds. If the performance was calculated in accordance with
SEC standardized performance methodology, the performance results may have been different. The Adviser has prepared and presented the
Composite performance in compliance with the Global Investment Performance Standards (GIPS®). The Adviser’s policies on calculating
performance and preparing GIPS® compliant performance presentations are available upon request.

 

All returns presented were calculated on a total return
basis and include all dividends and interest, accrued income, and realized and unrealized gains and losses. Investment transactions are
accounted for on a trade date basis. “Net of fees” returns reflect the deduction of investment management fees, as well as
the deduction of any brokerage commissions, execution costs, withholding taxes, sales loads and account fees paid by the Accounts included
in the Composite, without taking into account federal or state income taxes, while “gross of fees” returns do not reflect
the deduction of investment management fees. All fees and expenses, except custodial fees, if any, were included in the calculations.

 

Net of fees returns are calculated using the highest
tier of the Adviser’s standard fee schedule. Because of variation in fee levels, the net of fees returns may not be reflective of
performance in any one particular Account. Therefore, the performance information shown below is not necessarily representative of the
performance information that typically would be shown for a registered mutual fund.

 

Each Fund’s fees and expenses are generally
expected to be higher than those of its corresponding Composite. If the Funds’ fees and expenses had been imposed on the Composites,
the performance shown below would have been lower. The Accounts that are included in the Composites are also not subject to the diversification
requirements, specific tax restrictions, and investment limitations imposed on the Funds by the federal securities and tax laws. Consequently,
the performance results for the Composite could have been adversely affected if the Accounts in the Composite were subject to the same
federal securities and tax laws as the Funds.

 

The investment results for the Composites presented
below are not intended to predict or suggest the future returns of the Funds. The performance data shown below should not be considered
a substitute for a Fund’s own performance information.
Investors should be aware that the use of a methodology different than
that used below to calculate performance could result in different performance data.

 

 

Performance Information for the Adviser’s
Emerging Markets Equity Composite1

 

The following data represents the performance of
the Adviser and not the performance of the Barrow Hanley Emerging Markets Value Fund

 

Calendar Year Total Pre-Tax Returns

 

 

Year

Total Pre-Tax Return (Net of Fees) Total Pre-Tax Return (Gross of Fees) MSCI Emerging Markets Value Index2 MSCI Emerging Markets Index3 Number of Accounts at End of Period

Total Assets at End of Period

($ millions)

2020 6.62% 7.66% 5.48% 18.31% 3 $244
2019 15.78% 16.88% 11.94% 18.42% 4 $226
2018 -10.19% -9.30% -10.72% -14.57% 3 $86
2017 31.79% 33.04% 28.07% 37.28% 3 $73
2016 15.49% 16.58% 14.90% 11.19% 2 $61
2015 -16.02% -15.19% -18.57% -14.92% 2 $43
2014 -6.77% -5.86% -4.08% -2.19% 1 $10
2013 0.66% 1.64% -5.11% -2.60% 1 $11

 

Average Annual Total Pre-Tax Returns (as of September 30, 2021)

 

 

Adviser’s

Composite Returns

   
Time Period

 

Net of Fees

 

Gross of Fees

MSCI Emerging Markets Value Index2 MSCI Emerging Markets Index3
1 Year 36.05% 37.35% 28.43% 18.20%
3 Years 7.83% 8.87% 4.77% 8.58%
5 Years 8.33% 9.37% 6.87% 9.23%
Since Inception4 4.57% 5.58% 2.57% 4.94%

 

1 The
Composite performance information is calculated in and expressed in United States dollars
.

 

2 The MSCI Emerging Markets Value Index captures large and mid-cap securities exhibiting overall value style characteristics across 27 Emerging
Markets (EM) countries. The value investment style characteristics for index construction are defined using three variables: book value
to price, 12-month forward earnings to price and dividend yield.

 

3 The MSCI Emerging Markets Index captures large and mid-cap representation across 27 Emerging Markets (EM) countries. With 1,418 constituents, the index covers approximately
85% of the free float-adjusted market capitalization in each country.

 

4 Inception date of the Composite is October 1, 2012.

 

 

Performance Information for the Adviser’s
Non-U.S. Value Equity Composite1

 

The following data represents the performance of
the Adviser and not the performance of the Barrow Hanley International Value Fund

 

Calendar Year Total Pre-Tax Returns

 

 

Year

Total Pre-Tax Return (Net of Fees) Total Pre-Tax Return (Gross of Fees) MSCI EAFE Value Index2 MSCI EAFE Index3 Number of Accounts at End of Period

Total Assets at End of Period

($ millions)

2020 3.44% 4.18% -2.63% 7.82% 2 $1,652
2019 25.85% 26.72% 16.09% 22.01% 3 $2,255
2018 -18.40% -17.78% -14.78% -13.79% 5 $1,949
2017 23.00% 23.88% 21.44% 25.03% 8 $2,838
2016 2.98% 3.73% 5.02% 1.00% 18 $4,050
2015 -7.28% -6.61% -5.68% -0.81% 19 $4,022
2014 -2.59% -1.89% -5.39% -4.90% 18 $3,798
2013 19.10% 19.96% 22.95% 22.78% 19 $3,945
2012 15.08% 15.91% 17.69% 17.32% 17 $2,195
2011 -11.32% -10.66% -12.17% -12.14% 10 $1,167

 

Average Annual Total Pre-Tax Returns (as of September 30, 2021)

 

 

Adviser’s

Composite Returns

   
Time Period

 

Net of Fees

 

Gross of Fees

MSCI EAFE Value Index2 MSCI EAFE Index3
1 Year 35.70% 36.66% 30.66% 25.73%
3 Years 7.45% 8.22% 3.04% 7.62%
5 Years 8.48% 9.26% 5.96% 8.81%
10 Years 6.77% 7.54% 5.97% 8.09%
Since Inception4 4.12% 4.87% 2.48% 4.25%

 

1 The
Composite performance information is calculated in and expressed in United States dollars
.

 

2 The MSCI EAFE Value Index captures large and mid-cap securities exhibiting overall value style characteristics across Developed Markets
countries around the world, excluding the US and Canada. The value investment style characteristics for index construction are defined
using three variables: book value to price, 12-month forward earnings to price and dividend yield.

 

3 The MSCI EAFE Index is an equity index which captures large and mid-cap representation across 21 Developed Markets countries around the
world, excluding the US and Canada. With 845 constituents, the index covers approximately 85% of the free float-adjusted market capitalization
in each country.

 

4 Inception date of the Composite is August 1, 2006.

 

Purchasing, Selling and Exchanging Fund
Shares

 

This section tells you how to purchase, sell (sometimes
called “redeem”) and exchange I Shares and Y Shares of the Funds.

 

For information regarding the federal income tax consequences
of transactions in shares of the Funds, including information about cost basis reporting, see “Taxes.”

 

How to Choose a Share Class

 

Each Fund offers two classes of shares to investors,
I Shares and Y Shares. Each share class has its own shareholder eligibility criteria, cost structure and other features. The following
summarizes the primary features of I Shares and Y Shares. Contact your financial intermediary or a Fund for more information about each
Fund’s share classes and how to choose between them.

 

Class Name Investment Minimums Fees and Sales Charges
I Shares

Initial: $500,000

 

Subsequent: $50

Sales Charge – None

 

12b-1 Fee – None

 

Shareholder Servicing Fee – None

Y Shares

Initial: $2,500

 

Subsequent: $50

Sales Charge – None

 

12b-1 Fee – None

 

Shareholder Servicing Fee – 0.15%

 

An investor may be eligible to purchase more than
one share class. However, if you purchase shares through a financial intermediary, you may only purchase that class of shares which your
financial intermediary sells or services. Your financial intermediary can tell you which classes of shares are available through the intermediary.

 

Each Fund reserves the right to change the criteria
for eligible investors in its sole discretion.

 

How to Purchase Fund Shares

 

To purchase shares directly from the Funds through
their transfer agent, complete and send in the application. If you need an application or have questions, please call [Telephone].

 

All investments must be made by check, wire or Automated
Clearing House (“ACH”). All checks must be made payable in U.S. dollars and drawn on U.S. financial institutions. The Funds
do not accept purchases made by third-party checks, credit cards, credit card checks, cash, traveler’s checks, money orders or cashier’s
checks.

 

The Funds reserve the right to reject any specific
purchase order, including exchange purchases, for any reason. The Funds are not intended for short-term trading by shareholders in response
to short-term market fluctuations. For more information about the Funds’ policy on short-term trading, see “Excessive Trading
Policies and Procedures.”

 

The Funds do not generally accept investments by non-U.S.
persons. Non-U.S. persons may be permitted to invest in the Funds subject to the satisfaction of enhanced due diligence. Please contact
the Funds for more information.

 

By Mail

 

You can open an account with a Fund by sending a check
and your account application to the address below. You can add to an existing account by sending a Fund a check and, if possible, the
“Invest by Mail” stub that accompanies your confirmation statement. Be sure your check identifies clearly your name, your
account number, the Fund’s name and the share class.

 

Regular Mail Address

 

Perpetual Funds

PO Box 588

Portland, ME 04112

 

Express Mail Address

 

Perpetual Funds

c/o Atlantic Shareholder Services, LLC

Three Canal Plaza, Ground Floor

Portland, ME 04101

 

Each Fund does not consider the U.S. Postal
Service or other independent delivery services to be its agents. Therefore, deposit in the mail or with such services of purchase
orders does not constitute receipt by the Fund’s transfer agent. The share price used to fill the purchase order is the next
price calculated by a Fund after the Fund’s transfer agent receives the order in proper form at its office, not at the P.O.
Box provided for regular mail delivery.

 

By Wire

 

To open an account by wire, call [Telephone] for details.
To add to an existing account by wire, wire your money using the wiring instructions set forth below (be sure to include the Fund name,
the share class, and your account number).

 

Wiring Instructions

 

[Wiring instructions to be inserted.]

 

Ref: Fund name/share class/account number/account name

 

[By Systematic Investment Plan (via ACH)

 

You may not open an account via ACH. However,
once you have established a direct account with a Fund, you can set up an automatic investment plan via ACH by mailing a completed
application to the Fund. These purchases can be made monthly, quarterly, semi-annually or annually in amounts of at least $100. To
cancel or change a plan, contact the Funds by mail at: Perpetual Funds, PO Box 588, Portland, ME 04112 (Express Mail Address:
Perpetual Funds, c/o Atlantic Shareholder Services, LLC, Three Canal Plaza, Ground Floor, Portland, ME 04101). Please allow up to 15
days to create the plan and 3 days to cancel or change it.]

 

Purchases In-Kind

 

Subject to the approval of a Fund, an investor may
purchase shares of such Fund with liquid securities and other assets that are eligible for purchase by that Fund (consistent with the
Fund’s investment policies and restrictions) and that have a value that is readily ascertainable in accordance with the Fund’s
valuation policies. These transactions will be effected only if the Adviser deems the security to be an appropriate investment for such
Fund. Assets purchased by a Fund in such transactions will be valued in accordance with procedures adopted by such Fund. Each Fund reserves
the right to amend or terminate this practice at any time.

 

Minimum Purchases

 

To purchase I Shares of a Fund for the first time,
you must invest at least $500,000.

 

To purchase Y Shares of a Fund for the first time,
you must invest at least $2,500.

 

Subsequent investments must be made in amounts of
at least $50. The Funds may accept investments of smaller amounts in their sole discretion.

 

Fund Codes

 

Each Fund’s reference information, which is
listed below, will be helpful to you when you contact a Fund to purchase or exchange shares, check daily NAV, or obtain additional information.

 

Fund Share Class Ticker Symbol CUSIP Fund Code
Emerging Markets Value Fund I Shares [____] [____] [____]
  Y Shares [____] [____] [____]
International Value Fund I Shares [____] [____] [____]
  Y Shares [____] [____] [____]

 

General Information

 

You may purchase shares on any day that the NYSE is
open for business (a “Business Day”). Shares cannot be purchased by Federal Reserve wire on days that either the NYSE or the
Federal Reserve is closed.

 

A Fund’s price per share will be the NAV per
share next determined after the Fund or an authorized institution (defined below) receives your purchase order in proper form. “Proper
form” means that the Fund was provided with a complete and signed account application, including the investor’s social security
number or tax identification number, and other identification required by law or regulation, as well as sufficient purchase proceeds.

 

Each Fund calculates its NAV once each Business Day
as of the close of normal trading on the NYSE (normally, 4:00 p.m., Eastern Time). To receive the current Business Day’s NAV, a
Fund or an authorized institution must receive your purchase order in proper form before the close of normal trading on the NYSE. If the
NYSE closes early, as in the case of scheduled half-day trading or unscheduled suspensions of trading, each Fund reserves the right to
calculate NAV as of the earlier closing time. A Fund will not accept orders that request a particular day or price for the transaction
or any other special conditions. Shares will only be priced on Business Days. Since securities may trade on days that are not Business
Days, the value of a Fund may change on days when you are unable to purchase or redeem shares.

 

Buying or Selling Shares through a Financial Intermediary

 

In addition to being able to buy and sell Fund shares directly from the Funds through their transfer agent, you may also buy or sell shares
of the Funds through accounts with financial intermediaries, such as brokers and other institutions that are authorized to place trades
in Fund shares for their customers. When you purchase or sell Fund shares through a financial
intermediary (rather than directly from the Funds), you may have to transmit your purchase and sale requests to the financial intermediary
at an earlier time for your transaction to become effective that day. This allows the financial intermediary time to process your requests
and transmit them to a Fund prior to the time such Fund calculates its NAV that day. Your financial intermediary is responsible for transmitting
all purchase and redemption requests, investment information, documentation and money to a Fund on time. If your financial intermediary
fails to do so, it may be responsible for any resulting fees or losses. Unless your financial intermediary is an authorized institution,
orders transmitted by the financial intermediary and received by a Fund after the time NAV is calculated for a particular day will receive
the following day’s NAV.

 

Certain financial intermediaries, including certain
broker-dealers and shareholder organizations, are authorized to act as agent on behalf of the Funds with respect to the receipt of purchase
and redemption orders for Fund shares (“authorized institutions”). Authorized institutions are also authorized to designate
other intermediaries to receive purchase and redemption orders on a Fund’s behalf. A Fund will be deemed to have received a purchase
or redemption order when an authorized institution or, if applicable, an authorized institution’s designee, receives the order.
Orders will be priced at a Fund’s NAV next computed after they are received by an authorized institution or an authorized institution’s
designee. To determine whether your financial intermediary is an authorized institution or an authorized institution’s designee
such that it may act as agent on behalf of a Fund with respect to purchase and redemption orders for Fund shares, you should contact your
financial intermediary directly.

 

If you deal directly with a financial intermediary,
you will have to follow its procedures for transacting with a Fund. Your financial intermediary may charge a fee for your purchase and/or
redemption transactions. For more information about how to purchase or sell Fund shares through a financial intermediary, you should contact
your financial intermediary directly.

 

How the Funds Calculate NAV

 

The NAV of a class of a Fund’s shares is determined
by dividing the total value of the Fund’s portfolio investments and other assets attributable to the class, less any liabilities
attributable to the class, by the total number of shares outstanding of the class.

 

In calculating NAV, each Fund generally values its
investment portfolio at market price. If market prices are not readily available or a Fund reasonably believes that they are unreliable,
such as in the case of a security value that has been materially affected by events occurring after the relevant market closes, the Fund
is required to price those securities at fair value as determined in good faith using methods approved by the Board. Pursuant to the policies
adopted by, and under the ultimate supervision of, the Board, these methods are implemented through the Trust’s Fair Value Pricing
Committee, members of which are appointed by the Board. A Fund’s determination of a security’s fair value price often involves
the consideration of a number of subjective factors, and is therefore subject to the unavoidable risk that the value that the Fund assigns
to a security may be higher or lower than the security’s value would be if a reliable market quotation for the security was readily
available.

 

With respect to non-U.S. securities held by a Fund,
the Fund may take factors influencing specific markets or issuers into consideration in determining the fair value of a non-U.S. security.
Foreign securities markets may be open on days when the U.S. markets are closed. In such cases, the value of any foreign securities owned
by a Fund may be significantly affected on days when investors cannot buy or sell shares. In addition, due to the difference in times
between the close of the foreign markets and the time as of which a Fund prices its shares, the value the Fund assigns to securities may
not be the same as the quoted or published prices of those securities on their primary markets or exchanges. In determining fair value
prices, a Fund may consider the performance of securities on their primary exchanges, foreign currency appreciation/depreciation, securities
market movements in the United States, or other relevant information related to the securities.

There may be limited circumstances in which a Fund
would price securities at fair value for stocks of U.S. companies that are traded on U.S. exchanges – for example, if the exchange
on which a portfolio security is principally traded closed early or if trading in a particular security was halted during the day and
did not resume prior to the time the Fund calculated its NAV.

 

How to Sell Your Fund Shares

 

If you own your shares directly, you may sell your
shares on any Business Day by contacting a Fund directly by mail or telephone at [Telephone]. If you own your shares through an account
with a broker or other institution, contact that broker or institution to sell your shares. Your broker or institution may charge a fee for its services in addition to the fees charged by the Funds.

 

If you would like to have your redemption proceeds,
including proceeds generated as a result of closing your account, sent to a third party or an address other than your own, please notify
such Fund in writing.

 

To protect you and the Funds against fraud, signatures
on certain requests must have a Medallion Signature Guarantee. A Medallion Signature Guarantee verifies the authenticity of your signature.
You may obtain a Medallion Signature Guarantee from most banking institutions or securities brokers but not from a notary public. Written
instructions signed by all registered shareholders with a Medallion Signature Guarantee for each shareholder are required for any of
the following:

 

written requests to redeem $100,000 or more;
     
changes to a shareholder’s record name or account registration;
     
paying redemption proceeds from an account for which the address has changed within the last 30 days;
     
sending redemption and distribution proceeds to any person, address or financial institution account not on record;
     
sending redemption and distribution proceeds to an account with a different registration (name or ownership) from your account; and
     
adding or changing ACH or wire instructions, the telephone redemption or exchange option or any other election in connection with your
account.

 

The transfer agent reserves the right to require Medallion Signature Guarantees on all redemptions.

 

Accounts held by a corporation, trust, fiduciary or
partnership, may require additional documentation along with a signature guaranteed letter of instruction. The Funds participate in the
Paperless Legal Program (the “Program”), which eliminates the need for accompanying paper documentation on legal securities
transfers. Requests received with a Medallion Signature Guarantee will be reviewed for the proper criteria to meet the guidelines of the
Program and may not require additional documentation. Please contact Shareholder Services at [Telephone] for more information.

 

The sale price of each share will be the NAV next
determined after a Fund (or an authorized institution) receives your request in proper form.

 

By Mail

 

To redeem shares by mail, please send a letter to
a Fund signed by all registered parties on the account specifying:

 

The dollar amount or number of shares you wish to redeem;
The account name(s); and
The address to which redemption (sale) proceeds should be sent.

 

All registered shareholders must sign the letter in
the exact name(s) and must designate any special capacity in which they are registered.

 

Regular Mail Address

 

Perpetual Funds

PO Box 588

Portland, ME 04112

 

Express Mail Address

 

Perpetual Funds

c/o Atlantic Shareholder
Services, LLC

Three Canal Plaza, Ground Floor

Portland, ME 04101

 

Each Fund does not consider the U.S. Postal
Service or other independent delivery services to be its agents. Therefore, deposit in the mail or with such services of sell orders
does not constitute receipt by the Fund’s transfer agent. The share price used to fill the sell order is the next price
calculated by a Fund after the Fund’s transfer agent receives the order in proper form at its office, not at the P.O. Box
provided for regular mail delivery.

 

By Telephone

 

To redeem shares by telephone, you must first establish
the telephone redemption privilege (and, if desired, the wire and/or ACH redemption privilege) by completing the appropriate sections
of the account application. Call [Telephone] to redeem your shares. Based on your instructions, the Funds will mail your proceeds to you,
or send them to your bank via wire or ACH.

 

Receiving Your Money

 

Normally, a Fund will send your sale proceeds within
one Business Day after it receives your redemption request. A Fund, however, may take up to seven days to pay redemption proceeds. Your
proceeds can be wired to your bank account (may be subject to a $10 fee), sent to you by check or sent via ACH to your bank account if
you have established banking instructions with a Fund. If you are selling shares that were recently purchased by check or through ACH,
redemption proceeds may not be available until your check has cleared or the ACH transaction has been completed (which may take up to
15 days from your date of purchase).

 

A Fund typically expects to sell portfolio assets
and/or hold cash or cash equivalents to meet redemption requests. On a less regular basis, a Fund may also meet redemption requests by
[drawing on a line of credit,] using short-term borrowings from its custodian and/or redeeming shares in-kind (as described below). These
methods may be used during both normal and stressed market conditions.

 

Redemptions In-Kind

 

A Fund generally pays sale (redemption) proceeds in
cash. However, under unusual conditions that make the payment of cash unwise and for the protection of such Fund’s remaining shareholders,
such Fund might pay all or part of your redemption proceeds in securities with a market value equal to the redemption price (redemption
in-kind). If your shares were redeemed in-kind, you would have to pay transaction costs to sell the securities distributed to you, as
well as taxes on any capital gains from the sale as with any redemption. In addition, you would continue to be subject to the risks of
any market fluctuation in the value of the securities you receive in-kind until they are sold.

 

Involuntary Redemptions of Your Shares

 

If your account balance drops below $[____] because
of redemptions, you may be required to sell your shares. The Funds generally will provide you at least [30] days’ written notice
to give you time to add to your account and avoid the involuntary redemption of your shares. Each Fund reserves the right to waive the
minimum account value requirement in its sole discretion. If your Fund shares are redeemed for this reason within 60 days of their purchase, the redemption fee will not be applied.

 

Suspension of Your Right to Sell Your Shares

 

A Fund may suspend your right to sell your shares
or delay payment of redemption proceeds for more than seven days during times when the NYSE is closed, other than during customary weekends
or holidays, or as otherwise permitted by the SEC. More information about this is in the SAI.

 

Telephone Transactions

 

Purchasing and selling Fund shares over the
telephone is extremely convenient, but not without risk. Although the Funds have certain safeguards and procedures to confirm the
identity of callers and the authenticity of instructions, the Funds are not responsible for any losses or costs incurred by
following telephone instructions they reasonably believe to be genuine. If you or your financial institution transact with the Funds
over the telephone, you will generally bear the risk of any loss.

 

How to Exchange Fund Shares

 

At no charge, you or your financial intermediary may
exchange I Shares or Y Shares of one Fund for I Shares or Y Shares, respectively, of another Fund by writing to or calling the Funds.
Exchanges are subject to the eligibility requirements and the fees and expenses of the Fund you exchange into.

 

The exchange privilege is not intended as a vehicle
for short-term or excessive trading. A Fund may suspend or terminate your exchange privilege if you engage in a pattern of exchanges that
is excessive, as determined in the sole discretion of the Fund. For more information about the Funds’ policy on excessive trading,
see “Excessive Trading Policies and Procedures.”

 

At no charge, you or your financial intermediary may
also convert one class of shares of one Fund directly to another class of shares of the same Fund, subject to the eligibility requirements
and the fees and expenses of the share class you convert into. A conversion between share classes of the same Fund is not a taxable event.

 

You may only exchange or convert shares between accounts
with identical registrations (i.e., the same names and addresses). If you purchase shares through a financial intermediary, you may only
exchange or convert into a Fund or share class which your financial intermediary sells or services. Your financial intermediary can tell
you which Funds and share classes are available through the intermediary.

 

Payments to Financial Intermediaries

 

The Funds and/or the Adviser may compensate financial
intermediaries for providing a variety of services to the Funds and/or their shareholders. Financial intermediaries include affiliated
or unaffiliated brokers, dealers, banks (including bank trust departments), trust companies, registered investment advisers, financial
planners, retirement plan administrators, insurance companies, and any other institution having a service, administration, or any similar
arrangement with the Funds, their service providers or their respective affiliates. This section briefly describes how financial intermediaries
may be paid for providing these services. For more information, please see “Payments to Financial Intermediaries” in the SAI.

 

Shareholder Servicing Plan

 

Each Fund has adopted a shareholder servicing plan
that provides that the Fund may pay financial intermediaries for shareholder services in an annual amount not to exceed 0.15% based on
the average daily net assets of the Fund’s Y Shares. The services for which financial intermediaries are compensated may include
record-keeping, transaction processing for shareholders’ accounts and other shareholder services.

 

Payments by the Adviser

 

From time to time, the Adviser and/or its affiliates,
in their discretion, may make payments to certain affiliated or unaffiliated financial intermediaries to compensate them for the costs
associated with distribution, marketing, administration and shareholder servicing support for the Funds. These payments are sometimes
characterized as “revenue sharing” payments and are made out of the Adviser’s and/or its affiliates’ own legitimate
profits or other resources, and may be in addition to any payments made to financial intermediaries by the Funds. A financial intermediary
may provide these services with respect to Fund shares sold or held through programs such as retirement plans, qualified tuition programs,
fund supermarkets, fee-based advisory or wrap fee programs, bank trust programs, and insurance (e.g., individual or group annuity) programs.
In addition, financial intermediaries may receive payments for making shares of the Funds available to their customers or registered representatives,
including providing the Funds with “shelf space,” placing them on a preferred or recommended fund list, or promoting the Funds
in certain sales programs that are sponsored by financial intermediaries. To the extent permitted by SEC and Financial Industry Regulatory
Authority (“FINRA”) rules and other applicable laws and regulations, the Adviser and/or its affiliates may pay or allow other
promotional incentives or payments to financial intermediaries.

 

The level of payments made by the Adviser and/or its
affiliates to individual financial intermediaries varies in any given year and may be negotiated on the basis of sales of Fund shares,
the amount of Fund assets serviced by the financial intermediary or the quality of the financial intermediary’s relationship with
the Adviser and/or its affiliates. These payments may be more or less than the payments received by the financial intermediaries from
other mutual funds and may influence a financial intermediary to favor the sales of certain funds or share classes over others. In certain
instances, the payments could be significant and may cause a conflict of interest for your financial intermediary. Any such payments will
not change the NAV or price of a Fund’s shares. Please contact your financial intermediary for information about any payments it
may receive in connection with the sale of Fund shares or the provision of services to Fund shareholders.

 

In addition to these payments, your financial intermediary
may charge you account fees, commissions or transaction fees for buying or redeeming shares of the Funds, or other fees for servicing
your account. Your financial intermediary should provide a schedule of its fees and services to you upon request.

 

Other Policies

 

Excessive Trading Policies and Procedures

 

Each Fund is intended for long-term investment purposes
only and discourages shareholders from engaging in “market timing” or other types of excessive short-term trading. This frequent
trading into and out of a Fund may present risks to such Fund’s long-term shareholders and could adversely affect shareholder returns.
The risks posed by frequent trading include interfering with the efficient implementation of each Fund’s investment strategies,
triggering the recognition of taxable gains and losses on the sale of a Fund’s investments, requiring such Fund to maintain higher
cash balances to meet redemption requests, and experiencing increased transaction costs.

 

In addition, because the Funds may invest in foreign
securities traded primarily on markets that close prior to the time each Fund determines its NAV, the risks posed by frequent trading
may have a greater potential to dilute the value of Fund shares held by long-term shareholders than funds investing exclusively in U.S.
securities. In instances where a significant event that affects the value of one or more foreign securities held by a Fund takes place
after the close of the primary foreign market, but before the time that the Fund determines its NAV, certain investors may seek to take
advantage of the fact that there will be a delay in the adjustment of the market price for a security caused by this event until the foreign
market reopens (sometimes referred to as “price” or “time zone” arbitrage). Shareholders who attempt this type
of arbitrage may dilute the value of a Fund’s shares if the prices of the Fund’s foreign securities do not reflect their fair
value. Although the Funds have procedures designed to determine the fair value of foreign securities for purposes of calculating their
NAV when such an event has occurred, fair value pricing, because it involves judgments which are inherently subjective, may not always
eliminate the risk of price arbitrage.

 

A Fund that invests in small- and mid-cap securities,
which often trade in lower volumes and may be less liquid, may be more susceptible to the risks posed by frequent trading because frequent
transactions in the Fund’s shares may have a greater impact on the market prices of these types of securities.

 

The Funds’ service providers will take steps
reasonably designed to detect and deter frequent trading by shareholders pursuant to the Funds’ policies and procedures described
in this prospectus and approved by the Board. For purposes of applying these policies, the Funds’ service providers may consider
the trading history of accounts under common ownership or control. The Funds’ policies and procedures include:

 

Shareholders are restricted from making more than 2 “round trips,” including exchanges, into
or out of a Fund within any 90-day period. The Funds define a “round trip” as a purchase or exchange into a Fund by a shareholder,
followed by a subsequent redemption out of the Fund, of an amount the Adviser reasonably believes would be harmful or disruptive to the
Fund.

 

A redemption fee of 1.00% of the value of the shares sold will be imposed on shares redeemed within 30
days or less after their date of purchase (subject to certain exceptions as discussed below in “Redemption Fees”).

 

Each Fund reserves the right to reject any purchase or exchange request by any investor or group of investors
for any reason without prior notice, including, in particular, if the Fund or the Adviser reasonably believes that the trading activity
would be harmful or disruptive to the Fund.

 

The Funds and/or their service providers seek to apply
these policies to the best of their abilities uniformly and in a manner they believe is consistent with the interests of each Fund’s
long-term shareholders. The Funds do not knowingly accommodate frequent purchases and redemptions by Fund shareholders. Although these
policies are designed to deter frequent trading, none of these measures alone nor all of them taken together eliminate the possibility
that frequent trading in a Fund will occur. Systematic purchases and redemptions are exempt from these policies.

 

Financial intermediaries (such as investment advisers
and broker-dealers) often establish omnibus accounts in the Funds for their customers through which transactions are placed. The Funds
have entered into “information sharing agreements” with these financial intermediaries, which permit the Funds to obtain,
upon request, information about the trading activity of the intermediary’s customers that invest in the Funds. If the Funds or their
service providers identify omnibus account level trading patterns that have the potential to be detrimental to the Funds, the Funds or
their service providers may, in their sole discretion, request from the financial intermediary information concerning the trading activity
of its customers. Based upon a review of that information, if the Funds or their service providers determine that the trading activity
of any customer may be detrimental to the Funds, they may, in their sole discretion, request the financial intermediary to restrict or
limit further trading in the Funds by that customer. If the Funds are not satisfied that the intermediary has taken appropriate action,
the Funds may terminate the intermediary’s ability to transact in Fund shares. When information regarding transactions in the Funds’
shares is requested by the Funds and such information is in the possession of a person that is itself a financial intermediary to a financial
intermediary (an “indirect intermediary”), any financial intermediary with whom the Funds have an information sharing agreement
is obligated to obtain transaction information from the indirect intermediary or, if directed by the Funds, to restrict or prohibit the
indirect intermediary from purchasing shares of the Funds on behalf of other persons.

 

The Funds and their service providers will use reasonable
efforts to work with financial intermediaries to identify excessive short-term trading in omnibus accounts that may be detrimental to
the Funds. However, there can be no assurance that the monitoring of omnibus account level trading will enable the Funds to identify or
prevent all such trading by a financial intermediary’s customers. Please contact your financial intermediary for more information.

 

Redemption Fee

 

In an effort to discourage short-term trading and
defray costs incurred by shareholders as a result of short-term trading, each Fund charges a 1.00% redemption fee on redemptions (including
exchanges) of shares that have been held for less than 30 days. The redemption fee is deducted from a Fund’s sale proceeds and cannot
be paid separately, and any proceeds of the fee are credited to the assets of the Fund from which the redemption was made. The fee does
not apply to shares purchased with reinvested dividends or distributions. In determining how long shares of a Fund have been held, the
Fund assumes that shares held by the investor the longest period of time will be sold first.

 

The redemption fee is applicable to Fund shares purchased
either directly from a Fund or through a financial intermediary, such as a broker-dealer. Transactions through financial intermediaries
typically are placed with the Fund on an omnibus basis and include both purchase and sale transactions placed on behalf of multiple investors.
The Funds request that financial intermediaries assess the redemption fee on customer accounts and collect and remit the proceeds to the
Funds. However, the Funds recognize that due to operational and systems limitations, intermediaries’ methods for tracking and calculating
the fee may be inadequate or differ in some respects from the Funds’. Therefore, to the extent that financial intermediaries are
unable to collect the redemption fee, a Fund may not be able to defray the expenses associated with those short-term trades made by that
financial intermediary’s customers.

 

Each Fund reserves the right to waive its redemption
fee at its discretion when it believes such waiver is in the best interests of the Fund, including with respect to certain categories
of redemptions that the Fund reasonably believes may not raise frequent trading or market timing concerns. These categories currently
include, but are not limited to, the following: (i) participants in certain group retirement plans whose processing systems are incapable
of properly applying the redemption fee to underlying shareholders; (ii) redemptions resulting from certain transfers upon the death of
a shareholder; (iii) redemptions by certain pension plans as required by law or by regulatory authorities; (iv) systematic withdrawals;
and (v) retirement loans and withdrawals.

 

Customer Identification and Verification

 

To help the government fight the funding of terrorism
and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies
each person who opens an account.

 

What this means to you: when you open an account,
a Fund will ask your name, address, date of birth, and other information that will allow the Fund to identify you. This information is
subject to verification to ensure the identity of all persons opening a mutual fund account.

 

The Funds are required by law to reject your new account
application if the required identifying information is not provided.

 

In certain instances, the Funds are required to collect
documents to fulfill their legal obligation. Documents provided in connection with your application will be used solely to establish and
verify your identity.

 

Attempts to collect the missing information required
on the application will be performed by either contacting you or, if applicable, your broker or financial intermediary. If this information
cannot be obtained within a reasonable timeframe established in the sole discretion of the Funds, your application will be rejected.

 

Subject to the Funds’ right to reject purchases
as described in this prospectus, upon receipt of your application in proper form (or upon receipt of all identifying information required
on the application), your investment will be accepted and your order will be processed at the next-determined NAV per share.

 

The Funds reserve the right to close or liquidate
your account at the NAV next-determined and remit proceeds to you via check if they are unable to verify your identity. Attempts to verify
your identity will be performed within a reasonable timeframe established in the sole discretion of the Funds. Further, the Funds reserve
the right to hold your proceeds until your original check clears the bank, which may take up to 15 days from the date of purchase. In
such an instance, you may be subject to a gain or loss on Fund shares and will be subject to corresponding tax implications. You will
not be entitled to recover any sales charges paid in connection with your purchase of Fund shares.

 

Anti-Money Laundering Program

 

Customer identification and verification is part of
the Funds’ overall obligation to deter money laundering under federal law. The Funds have adopted an anti-money laundering compliance
program designed to prevent the Funds from being used for money laundering or the financing of illegal activities. In this regard, the
Funds reserve the right to: (i) refuse, cancel or rescind any purchase or exchange order; (ii) freeze any account and/or suspend account
services; or (iii) involuntarily close your account in cases of threatening conduct or suspected fraudulent or illegal activity. These
actions will be taken when, in the sole discretion of Fund management, they are deemed to be in the best interest of a Fund or in cases
when a Fund is requested or compelled to do so by governmental or law enforcement authority. If your account is closed at the request
of governmental or law enforcement authority, you may not receive proceeds of the redemption if the Fund is required to withhold such
proceeds.

 

Unclaimed Property

 

Each state has unclaimed property rules that generally
provide for escheatment (or transfer) to the state of unclaimed property under various circumstances. Such circumstances include inactivity
(e.g., no owner-initiated contact for a certain period), returned mail (e.g., when mail sent to a shareholder is returned by the post
office, or “RPO,” as undeliverable), or a combination of both inactivity and returned mail. Once it flags property as unclaimed, the applicable Fund will attempt to contact the shareholder, but if that attempt is unsuccessful,
the account may be considered abandoned and escheated to the state.

 

Shareholders that reside in the state of Texas may
designate a representative to receive escheatment notifications by completing and submitting a designation form that can be found on the
website of the Texas Comptroller. While the designated representative does not have any rights to claim or access the shareholder’s
account or assets, the escheatment period will cease if the representative communicates knowledge of the shareholder’s location
and confirms that the shareholder has not abandoned his or her property. A completed designation form may be mailed to the Funds (if shares
are held directly with the Funds) or to the shareholder’s financial intermediary (if shares are not held directly with the Funds).

 

More information on unclaimed property and how to
maintain an active account is available through your state or by calling [Telephone].

 

Dividends and Distributions

 

The Funds distribute their net investment income,
and make distributions of their net realized capital gains, if any, at least [annually]. If you own Fund shares on a Fund’s record
date, you will be entitled to receive the distribution.

 

You will receive dividends and distributions in the
form of additional Fund shares unless you elect to receive payment in cash. To elect cash payment, you must notify a Fund in writing prior
to the date of the distribution. Your election will be effective for dividends and distributions paid after the Fund receives your written
notice. To cancel your election, simply send the Fund written notice.

 

[Taxes]

 

Please consult your tax advisor regarding your
specific questions about U.S. federal, state and local income taxes.
Below is a summary of some important U.S. federal income tax
issues that affect the Funds and their shareholders. This summary is based on current tax laws, which may change. This summary does not
apply to shares held in an IRA or other tax-qualified plans, which are not subject to current tax. Transactions relating to shares held
in such accounts may, however, be taxable at some time in the future.

 

Each Fund intends to qualify each year for treatment
as a regulated investment company (“RIC”). If it meets certain minimum distribution requirements, a RIC is not subject to
tax at the fund level on income and gains from investments that are timely distributed to shareholders. However, a Fund’s failure
to qualify as a RIC or to meet minimum distribution requirements would result (if certain relief provisions were not available) in fund-level
taxation and, consequently, a reduction in income available for distribution to shareholders.

 

Each Fund intends to distribute substantially all
of its net investment income and net realized capital gains, if any. The dividends and distributions you receive may be subject to federal,
state, and local taxation, depending upon your tax situation. Distributions you receive from each Fund may be taxable whether you receive
them in cash or you reinvest them in additional shares of a Fund. Income distributions, including distributions of net short term capital
gains but excluding distributions of qualified dividend income, are generally taxable at ordinary income tax rates. Distributions reported
by a Fund as long term capital gains and as qualified dividend income are generally taxable at the rates applicable to long-term capital
gains and currently set at a maximum tax rate for individuals of 20% (lower rates apply to individuals in lower tax brackets). Once a
year the Funds (or their administrative agent) will send you a statement showing the types and total amount of distributions you received
during the previous year. The Funds’ investment strategies may limit their ability to make distributions eligible for the reduced
rates applicable to qualified dividend income.

 

You should note that if you purchase shares just before
a distribution, the purchase price would reflect the amount of the upcoming distribution. In this case, you would be taxed on the entire
amount of the distribution received, even though, as an economic matter, the distribution simply constitutes a return of your investment.
This is known as “buying a dividend” and should be avoided by taxable investors.

 

Each sale of Fund shares may be a taxable event. For
tax purposes, an exchange of your Fund shares for shares of a different fund is the same as a sale. The gain or loss on the sale of Fund
shares generally will be treated as a short-term capital gain or loss if you held the shares for 12 months or less or as long-term capital
gain or loss if you held the shares for longer. Any loss realized upon a taxable disposition of Fund shares held for six months or less
will be treated as long-term, rather than short-term, to the extent of any long-term capital gain distributions received (or deemed received)
by you with respect to the Fund shares. All or a portion of any loss realized upon a taxable disposition of Fund shares will be disallowed
if you purchase other substantially identical shares within 30 days before or after the disposition. In such a case, the basis of the
newly purchased shares will be adjusted to reflect the disallowed loss.

 

U.S. individuals with income exceeding $200,000 ($250,000
if married and filing jointly) are subject to a 3.8% tax on their “net investment income,” including interest, dividends,
and capital gains (including capital gains realized on the sale or exchange of shares of a Fund).

 

The Funds (or their administrative agent) must report
to the Internal Revenue Service (“IRS”) and furnish to Fund shareholders cost basis information for Fund shares. In addition
to reporting the gross proceeds from the sale of Fund shares, the Funds are also required to report the cost basis information for such
shares and indicate whether these shares have a short-term or long-term holding period. For each sale of Fund shares, the Funds will permit
shareholders to elect from among several IRS-accepted cost basis methods, including the average cost basis method. In the absence of an
election, the Funds will use the average cost basis method as the default cost basis method. The cost basis method elected by the Fund
shareholder (or the cost basis method applied by default) for each sale of Fund shares may not be changed after the settlement date of
each such sale of Fund shares. Fund shareholders should consult with their tax advisors to determine the best IRS-accepted cost basis
method for their tax situation and to obtain more information about how cost basis reporting applies to them. Shareholders also should
carefully review the cost basis information provided to them by the Funds and make any additional basis, holding period or other adjustments
that are required when reporting these amounts on their federal income tax returns.

 

The Funds may be subject to foreign withholding taxes
with respect to dividends or interest the Funds receive from sources in foreign countries. If more than 50% of the total assets of a Fund
consists of foreign securities, the Fund will be eligible to elect to treat some of those taxes as a distribution to shareholders, which
would allow shareholders to offset some of their U.S. federal income tax. The Funds (or their administrative agent) will notify you if
they make such an election and provide you with the information necessary to reflect foreign taxes paid on your income tax return.

 

Because each shareholder’s tax situation is
different, you should consult your tax advisor about the tax implications of an investment in the Funds.

 

More information about taxes is in the SAI.

 

Additional Information

 

The Trust enters into contractual arrangements with
various parties, including, among others, the Funds’ investment adviser, custodian, transfer agent, accountants, administrator and
distributor, who provide services to the Funds. Shareholders are not parties to, or intended (or “third-party”) beneficiaries
of, any of those contractual arrangements, and those contractual arrangements are not intended to create in any individual shareholder
or group of shareholders any right to enforce the terms of the contractual arrangements against the service providers or to seek any remedy
under the contractual arrangements against the service providers, either directly or on behalf of the Trust.

 

This prospectus and the SAI provide information concerning
the Trust and the Funds that you should consider in determining whether to purchase shares of the Funds. The Funds may make changes to
this information from time to time. Neither this prospectus, the SAI or any document filed as an exhibit to the Trust’s registration
statement, is intended to, nor does it, give rise to an agreement or contract between the Trust or the Funds and any shareholder, or give
rise to any contract or other rights in any individual shareholder, group of shareholders or other person other than any rights conferred
explicitly by federal or state securities laws that may not be waived.

 

Financial Highlights

 

Because the Funds have not commenced operations as
of the date of this prospectus, financial highlights are not available.

 

THE ADVISORS’ INNER CIRCLE FUND III

PERPETUAL FUNDS

 

Investment Adviser

 

Perpetual US Services LLC, doing business as PGIA

155 North Wacker Drive, Suite 4250

Chicago, Illinois 60606

 

Sub-Adviser

 

Barrow, Hanley, Mewhinney & Strauss, LLC

2200 Ross Avenue, 31st Floor

Dallas, TX 75201

 

Distributor

 

SEI Investments Distribution Co.

One Freedom Valley Drive

Oaks, Pennsylvania 19456

 

Legal Counsel

 

Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, Pennsylvania 19103

 

More information about the Funds is available, without charge, through
the following:

 

Statement of Additional Information (“SAI”):
The SAI, dated [Date], as it may be amended from time to time, includes detailed information about the Funds and The Advisors’
Inner Circle Fund III. The SAI is on file with the U.S. Securities and Exchange Commission (the “SEC”) and is incorporated
by reference into this prospectus. This means that the SAI, for legal purposes, is a part of this prospectus.

 

Annual and Semi-Annual Reports: These reports
list the Funds’ holdings and contain information from the Adviser about investment strategies, and recent market conditions and
trends and their impact on Fund performance. The reports also contain detailed financial information about the Funds.

 

To Obtain an SAI, Annual or Semi-Annual Report,
or More Information:

 

 

PO Box 588

Portland, ME 04112

 

By Internet: Perpetual.com and BarrowHanley.com

 

From the SEC: You can also obtain the
SAI or the Annual and Semi-Annual Reports, as well as other information about The Advisors’ Inner Circle Fund III, from the EDGAR
Database on the SEC’s website at: http://www.sec.gov. You may also obtain this information, upon payment of a duplicating fee, by
e-mailing the SEC at the following address: [email protected]

 

The Trust’s Investment Company Act registration number is 811-22920.

 

PBH-PS-001-0100

 

SUBJECT TO COMPLETION

 

THE INFORMATION IN THIS STATEMENT OF
ADDITIONAL INFORMATION IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE U.S. SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT AN OFFER TO SELL THESE SECURITIES
AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

 

PRELIMINARY STATEMENT OF ADDITIONAL
INFORMATION

DATED OCTOBER 15, 2021

 

STATEMENT OF ADDITIONAL INFORMATION

 

BARROW HANLEY EMERGING MARKETS VALUE FUND

I Shares: [____]

Y Shares: [____]

 

BARROW HANLEY INTERNATIONAL VALUE FUND

I Shares: [____]

Y Shares: [____]

 

each, a series of

THE ADVISORS’ INNER CIRCLE FUND III

 

[Date]

 

Investment Adviser:

PERPETUAL US SERVICES LLC, DOING BUSINESS AS PGIA

 

Sub-Adviser:

BARROW, HANLEY, MEWHINNEY & STRAUSS, LLC

 

This Statement of
Additional Information (“SAI”) is not a prospectus. This SAI is intended to provide additional information regarding the
activities and operations of The Advisors’ Inner Circle Fund III (the “Trust”) and the Barrow Hanley Emerging
Markets Value Fund (the “Emerging Markets Value Fund”) and Barrow Hanley International Value Fund (the
“International Value Fund”) (each, a “Fund” and collectively, the “Funds”). This SAI is
incorporated by reference into and should be read in conjunction with the Funds’ prospectus dated [Date], as it may be amended
from time to time (the “Prospectus”). Shareholders may obtain copies of the Prospectus or the Funds’ annual or
semi-annual report, when available, free of charge by writing to the Funds at Perpetual Funds, PO Box 588, Portland, ME 04112
(Express Mail Address: Perpetual Funds, c/o Atlantic Shareholder Services, LLC, Three Canal Plaza, Ground Floor, Portland, ME 04101) or
calling the Funds at
[Telephone].

 

TABLE OF CONTENTS

 

THE TRUST S-[__]
DESCRIPTION OF PERMITTED INVESTMENTS S-[__]
INVESTMENT LIMITATIONS S-[__]
THE ADVISER AND SUB-ADVISER S-[__]
THE PORTFOLIO MANAGERS S-[__]
THE ADMINISTRATOR S-[__]
THE DISTRIBUTOR S-[__]
PAYMENTS TO FINANCIAL INTERMEDIARIES S-[__]
THE TRANSFER AGENT S-[__]
THE CUSTODIAN S-[__]
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM S-[__]
LEGAL COUNSEL S-[__]
SECURITIES LENDING S-[__]
TRUSTEES AND OFFICERS OF THE TRUST S-[__]
PURCHASING AND REDEEMING SHARES S-[__]
DETERMINATION OF NET ASSET VALUE S-[__]
TAXES S-[__]
FUND TRANSACTIONS S-[__]
PORTFOLIO HOLDINGS S-[__]
DESCRIPTION OF SHARES S-[__]
LIMITATION OF TRUSTEES’ LIABILITY S-[__]
PROXY VOTING S-[__]
CODES OF ETHICS S-[__]
PRINCIPAL SHAREHOLDERS AND CONTROL PERSONS S-[__]
APPENDIX A – DESCRIPTION OF RATINGS A-1
APPENDIX B – PROXY VOTING POLICIES AND PROCEDURES B-1

 

 

THE TRUST

 

General. Each Fund is a separate series of
the Trust. The Trust is an open-end investment management company established under Delaware law as a Delaware statutory trust under an
Agreement and Declaration of Trust dated December 4, 2013, as amended September 10, 2020 (the “Declaration of Trust”). The
Declaration of Trust permits the Trust to offer separate series (“funds”) of shares of beneficial interest (“shares”).
The Trust reserves the right to create and issue shares of additional funds. Each fund is a separate mutual fund or exchange-traded fund
(“ETF”), and each share of each fund represents an equal proportionate interest in that fund. All consideration received by
the Trust for shares of any fund, and all assets of such fund, belong solely to that fund and would be subject to any liabilities related
thereto. Each fund of the Trust pays its (i) operating expenses, including fees of its service providers, expenses of preparing prospectuses,
proxy solicitation material and reports to shareholders, costs of custodial services and registering its shares under federal and state
securities laws, pricing and insurance expenses, brokerage costs, interest charges, taxes and organization expenses and (ii) pro rata
share of the fund’s other expenses, including audit and legal expenses. Expenses attributable to a specific fund shall be payable
solely out of the assets of that fund. Expenses not attributable to a specific fund are allocated across all of the funds on the basis
of relative net assets. The other funds of the Trust are described in one or more separate statements of additional information.

 

Description of Multiple Classes of Shares. The
Trust is authorized to offer shares of the Funds in I Shares and Y Shares. The different classes provide for variations in shareholder
servicing expenses and investment minimums. Investor eligibility is described in the Prospectus. The Trust reserves the right to create
and issue additional classes of shares. For more information on distribution expenses, see the “Payments to Financial Intermediaries”
section in this SAI.

 

Voting Rights. Each shareholder of record is
entitled to one vote for each share held on the record date for the meeting. Each Fund will vote separately on matters relating solely
to it. As a Delaware statutory trust, the Trust is not required, and does not intend, to hold annual meetings of shareholders. Approval
of shareholders will be sought, however, for certain changes in the operation of the Trust and for the election of members of the Board
of Trustees of the Trust (each, a “Trustee” and collectively, the “Trustees” or the “Board”) under
certain circumstances. Under the Declaration of Trust, the Trustees have the power to liquidate each Fund without shareholder approval.
While the Trustees have no present intention of exercising this power, they may do so if any Fund fails to reach a viable size within
a reasonable amount of time or for such other reasons as may be determined by the Board.

 

In addition, a Trustee may be removed by the remaining
Trustees or by shareholders at a special meeting called upon written request of shareholders owning at least 10% of the outstanding shares
of the Trust. In the event that such a meeting is requested, the Trust will provide appropriate assistance and information to the shareholders
requesting the meeting.

 

Any series of the Trust may reorganize or merge with
one or more other series of the Trust or of another investment company. Any such reorganization or merger shall be pursuant to the terms
and conditions specified in an agreement and plan of reorganization authorized and approved by the Trustees and entered into by the relevant
series in connection therewith. In addition, such reorganization or merger may be authorized by vote of a majority of the Trustees then
in office and, to the extent permitted by applicable law and the Declaration of Trust, without the approval of shareholders of any series.

 

 

 

DESCRIPTION OF PERMITTED INVESTMENTS

 

Each Fund’s investment objective and principal investment
strategies are described in the Prospectus. The Funds are diversified, as that term is defined under the Investment Company Act of 1940,
as amended (the “1940 Act”). The following information supplements, and should be read in conjunction with, the Prospectus.
The following are descriptions of the permitted investments and investment practices of the Funds and the associated risk factors. Each
Fund may invest in any of the following instruments or engage in any of the following investment practices unless such investment or activity
is inconsistent with or is not permitted by the Fund’s stated investment policies, including those stated below.

 

American Depositary Receipts (“ADRs”)

 

ADRs, as well as other “hybrid” forms
of ADRs, including European Depositary Receipts (“EDRs”) and Global Depositary Receipts (“GDRs”), are certificates
evidencing ownership of shares of a foreign issuer. Depositary receipts are securities that evidence ownership interests in a security
or a pool of securities that have been deposited with a “depository” and may be sponsored or unsponsored. These certificates
are issued by depository banks and generally trade on an established market in the United States or elsewhere. The underlying shares are
held in trust by a custodian bank or similar financial institution in the issuer’s home country. The depository bank may not have
physical custody of the underlying securities at all times and may charge fees for various services, including forwarding dividends and
interest and corporate actions. ADRs are alternatives to directly purchasing the underlying foreign securities in their national markets
and currencies. However, ADRs continue to be subject to many of the risks associated with investing directly in foreign securities.

 

For ADRs, the depository is typically a U.S. financial
institution and the underlying securities are issued by a foreign issuer. For other depositary receipts, the depository may be a foreign
or a U.S. entity, and the underlying securities may have a foreign or a U.S. issuer. Depositary receipts will not necessarily be denominated
in the same currency as their underlying securities. Generally, ADRs are issued in registered form, denominated in U.S. dollars, and designed
for use in the U.S. securities markets. Other depositary receipts, such as GDRs and EDRs, may be issued in bearer form and denominated
in other currencies, and are generally designed for use in securities markets outside the U.S. While the two types of depositary receipt
facilities (unsponsored or sponsored) are similar, there are differences regarding a holder’s rights and obligations and the practices
of market participants. A depository may establish an unsponsored facility without participation by (or acquiescence of) the underlying
issuer; typically, however, the depository requests a letter of non-objection from the underlying issuer prior to establishing the facility.
Holders of unsponsored depositary receipts generally bear all the costs of the facility. The depository usually charges fees upon deposit
and withdrawal of the underlying securities, the conversion of dividends into U.S. dollars or other currency, the disposition of non-cash
distributions, and the performance of other services.

 

Sponsored depositary receipt facilities are created
in generally the same manner as unsponsored facilities, except that sponsored depositary receipts are established jointly by a depository
and the underlying issuer through a deposit agreement. The deposit agreement sets out the rights and responsibilities of the underlying
issuer, the depository, and the depositary receipt holders. With sponsored facilities, the underlying issuer typically bears some of the
costs of the depositary receipts (such as dividend payment fees of the depository), although most sponsored depositary receipts agree
to distribute notices of shareholders meetings, voting instructions, and other shareholder communications and information to the depositary
receipt holders at the underlying issuer’s request. The depositary of an unsponsored facility frequently is under no obligation
to distribute shareholder communications received from the issuer of the deposited security or to pass through, to the holders of the
receipts, voting rights with respect to the deposited securities.

 

For purposes of a Fund’s investment policies,
investments in depositary receipts will be deemed to be investments in the underlying securities. Thus, a depositary receipt representing
ownership of common stock will be treated as common stock. Depositary receipts do not eliminate all of the risks associated with directly
investing in the securities of foreign issuers.

 

Investments in the securities of foreign issuers may
subject a Fund to investment risks that differ in some respects from those related to investments in securities of U.S. issuers. Such
risks include future adverse political and economic developments, possible imposition of withholding taxes on income, possible seizure,
nationalization or expropriation of foreign deposits, possible establishment of exchange controls or taxation at the source or greater
fluctuation in value due to changes in exchange rates. Foreign issuers of securities often engage in business practices different from
those of domestic issuers of similar securities, and there may be less information publicly available about foreign issuers. In addition,
foreign issuers are, generally speaking, subject to less government supervision and regulation and different accounting treatment than
are those in the United States.

 

Convertible Securities

 

Convertible securities are bonds, debentures, notes,
preferred stocks or other securities that may be converted or exchanged (by the holder or by the issuer) into shares of the underlying
common stock (or cash or securities of equivalent value) at a stated exchange ratio. A convertible security may also be called for redemption
or conversion by the issuer after a particular date and under certain circumstances (including a specified price) established upon issue.
If a convertible security held by a Fund is called for redemption or conversion, that Fund could be required to tender it for redemption,
convert it into the underlying common stock, or sell it to a third party.

 

Convertible securities generally have less potential
for gain or loss than common stocks. Convertible securities generally provide yields higher than the underlying common stocks, but generally
lower than comparable non-convertible securities. Because of this higher yield, convertible securities generally sell at a price above
their “conversion value,” which is the current market value of the stock to be received upon conversion. The difference between
this conversion value and the price of convertible securities will vary over time depending on changes in the value of the underlying
common stocks and interest rates. When the underlying common stocks decline in value, convertible securities will tend not to decline
to the same extent because of the interest or dividend payments and the repayment of principal at maturity for certain types of convertible
securities. However, securities that are convertible other than at the option of the holder generally do not limit the potential for loss
to the same extent as securities convertible at the option of the holder. When the underlying common stocks rise in value, the value of
convertible securities may also be expected to increase. At the same time, however, the difference between the market value of convertible
securities and their conversion value will narrow, which means that the value of convertible securities will generally not increase to
the same extent as the value of the underlying common stocks. Because convertible securities may also be interest-rate sensitive, their
value may increase as interest rates fall and decrease as interest rates rise. Convertible securities are also subject to credit risk,
and are often lower-quality securities.

 

Equity Securities

 

Equity securities represent ownership interests in
a company or partnership and consist of common stocks, preferred stocks, warrants and rights to acquire common stock, securities convertible
into common stock, and investments in master limited partnerships (“MLPs”). Investments in equity securities in general are
subject to market risks that may cause their prices to fluctuate over time. Fluctuations in the value of equity securities in which a
Fund invests will cause the net asset value of the Fund to fluctuate. The Funds may purchase equity securities traded on global securities
exchanges or the over-the-counter market. Equity securities are described in more detail below:

 

Types of Equity Securities:

 

Common Stock. Common stock represents an equity
or ownership interest in an issuer. In the event an issuer is liquidated or declares bankruptcy, the claims of owners of bonds and preferred
stock take precedence over the claims of those who own common stock.

 

Preferred Stock. Preferred stock represents
an equity or ownership interest in an issuer that pays dividends at a specified rate and that has precedence over common stock in the
payment of dividends. In the event an issuer is liquidated or declares bankruptcy, the claims of owners of bonds take precedence over
the claims of those who own preferred and common stock.

 

Alternative Entity Securities. Alternative
entity securities are the securities of entities that are formed as limited partnerships, limited liability companies, business trusts
or other non-corporate entities that are similar to common or preferred stock of corporations.

 

Exchange-Traded Funds. An ETF is a fund whose
shares are bought and sold on a securities exchange as if it were a single security. An ETF holds a portfolio of securities designed to
track a particular market segment or index. Some examples of ETFs are SPDRs®, DIAMONDSSM, NASDAQ 100 Index Tracking
StockSM (“QQQsSM”), and iShares®. A Fund could purchase an ETF to temporarily gain exposure
to a portion of the U.S. or foreign market while awaiting an opportunity to purchase securities directly. Similarly, a Fund may establish
a short position in an ETF to gain inverse exposure to a portion of the U.S. or foreign markets. The risks of owning an ETF generally
reflect the risks of owning the securities in which the ETF invests, although lack of liquidity in an ETF could result in it being more
volatile than the ETF’s holdings, and ETFs have management fees that increase their costs versus the costs of owning the underlying holdings
directly. See also “Securities of Other Investment Companies” below.

 

Rights and Warrants. A right is a privilege
granted to existing shareholders of a corporation to subscribe to shares of a new issue of common stock before it is issued. Rights normally
have a short life, usually two to four weeks, are freely transferable and entitle the holder to buy the new common stock at a lower price
than the public offering price. Warrants are securities that are usually issued together with a debt security or preferred stock and that
give the holder the right to buy proportionate amount of common stock at a specified price. Warrants are freely transferable and are traded
on major exchanges. Unlike rights, warrants normally have a life that is measured in years and entitles the holder to buy common stock
of a company at a price that is usually higher than the market price at the time the warrant is issued. Corporations often issue warrants
to make the accompanying debt security more attractive.

 

An investment in warrants and rights may entail greater
risks than certain other types of investments. Generally, rights and warrants do not carry the right to receive dividends or exercise
voting rights with respect to the underlying securities, and they do not represent any rights in the assets of the issuer. In addition,
their value does not necessarily change with the value of the underlying securities, and they cease to have value if they are not exercised
on or before their expiration date. Investing in rights and warrants increases the potential profit or loss to be realized from the investment
as compared with investing the same amount in the underlying securities.

 

Micro, Small and Medium Capitalization Issuers.
Investing in equity securities of micro, small and medium capitalization companies often involves greater risk than is customarily
associated with investments in larger capitalization companies. This increased risk may be due to the greater business risks of smaller
size, limited markets and financial resources, narrow product lines and frequent lack of depth of management. The securities of micro
and smaller companies are often traded in the over-the-counter market and even if listed on a national securities exchange may not be
traded in volumes typical for that exchange. Consequently, the securities of micro and smaller companies are less likely to be liquid,
may have limited market stability, and may be subject to more abrupt or erratic market movements than securities of larger, more established
growth companies or the market averages in general.

 

Initial Public Offerings (“IPOs”).
A Fund may invest a portion of its assets in securities of companies offering shares in IPOs. IPOs may have a magnified performance impact
on a fund with a small asset base. A Fund may hold IPO shares for a very short period of time, which may increase the turnover of a Fund’s
portfolio and may lead to increased expenses for the Fund, such as commissions and transaction costs. By selling IPO shares, a Fund may
realize taxable gains it will subsequently distribute to shareholders. In addition, the market for IPO shares can be speculative and/or
inactive for extended periods of time. The limited number of shares available for trading in some IPOs may make it more difficult for
a Fund to buy or sell significant amounts of shares without an unfavorable impact on prevailing prices. Holders of IPO shares can be affected
by substantial dilution in the value of their shares, by sales of additional shares and by concentration of control in existing management
and principal shareholders.

 

A Fund’s investment in IPO shares may include
the securities of unseasoned companies (companies with less than three years of continuous operations), which presents risks considerably
greater than common stocks of more established companies. These companies may have limited operating histories and their prospects for
profitability may be uncertain. These companies may be involved in new and evolving businesses and may be vulnerable to competition and
changes in technology, markets and economic conditions. They may be more dependent on key managers and third parties and may have limited
product lines.

 

General Risks of Investing in Stocks:

 

While investing in stocks allows investors to participate
in the benefits of owning a company, such investors must accept the risks of ownership. Unlike bondholders, who have preference to a company’s
earnings and cash flow, preferred stockholders, followed by common stockholders in order of priority, are entitled only to the residual
amount after a company meets its other obligations. For this reason, the value of a company’s stock will usually react more strongly
to actual or perceived changes in the company’s financial condition or prospects than its debt obligations. Stockholders of a company
that fares poorly can lose money.

 

Stock markets tend to move in cycles with short or
extended periods of rising and falling stock prices. The value of a company’s stock may fall because of:

 

Factors that directly relate to that company, such as decisions made by its management or lower demand
for the company’s products or services;

 

Factors affecting an entire industry, such as increases in production costs; and

 

Changes in general financial market conditions that are relatively unrelated to the company or its industry,
such as changes in interest rates, currency exchange rates or inflation rates.

 

Because preferred stock is generally junior to debt
securities and other obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value
of a preferred stock than in a more senior debt security with similar stated yield characteristics.

 

Real Estate Investment Trusts (“REITs”)

 

A REIT is a corporation or business trust (that would
otherwise be taxed as a corporation) which meets the definitional requirements of the Code. The Code permits a qualifying REIT to deduct
from taxable income the dividends paid, thereby effectively eliminating corporate level federal income tax. To meet the definitional requirements
of the Code, a REIT must, among other things: invest substantially all of its assets in interests in real estate (including mortgages
and other REITs), cash and government securities; derive most of its income from rents from real property or interest on loans secured
by mortgages on real property; and distribute annually 90% or more of its otherwise taxable income to shareholders.

 

REITs are sometimes informally characterized as Equity
REITs and Mortgage REITs. An Equity REIT invests primarily in the fee ownership or leasehold ownership of land and buildings; a Mortgage
REIT invests primarily in mortgages on real property, which may secure construction, development or long-term loans.

 

REITs may be affected by changes in underlying real
estate values, which may have an exaggerated effect to the extent that REITs in which a Fund invests may concentrate investments in particular
geographic regions or property types. Certain REITs have relatively small market capitalization, which may tend to increase the volatility
of the market price of securities issued by such REITs. Additionally, rising interest rates may cause investors in REITs to demand a higher
annual yield from future distributions, which may in turn decrease market prices for equity securities issued by REITs. Rising interest
rates also generally increase the costs of obtaining financing, which could cause the value of a Fund’s investments to decline.
During periods of declining interest rates, certain Mortgage REITs may hold mortgages that the mortgagors elect to prepay, which prepayment
may diminish the yield on securities issued by such Mortgage REITs. Equity and Mortgage REITs are also subject to heavy cash flow dependency,
defaults by borrowers and self-liquidation. In addition, Mortgage REITs may be affected by the ability of borrowers to repay when due
the debt extended by the REIT and Equity REITs may be affected by the ability of tenants to pay rent. The above factors may adversely
affect a borrower’s or a lessee’s ability to meet its obligations to the REIT. In the event of default by a borrower or lessee,
the REIT may experience delays in enforcing its rights as a mortgagee or lessor and may incur substantial costs associated with protecting
its investments.

 

Furthermore, REITs are dependent upon specialized
management skills, have limited diversification and are, therefore, subject to risks inherent in operating and financing a limited number
of projects. By investing in REITs indirectly through a Fund, a shareholder will bear not only his proportionate share of the expenses
of the Fund, but also, indirectly, similar expenses of the REITs. REITs depend generally on their ability to generate cash flow to make
distributions to shareholders. In addition, REITs could possibly fail to qualify for tax free pass-through of income under the Code or
to maintain their exemptions from registration under the 1940 Act.

 

Master Limited Partnerships

 

MLPs are limited partnerships or limited liability
companies, whose partnership units or limited liability interests are listed and traded on a U.S. securities exchange, and are treated
as publicly traded partnerships for federal income tax purposes. To qualify to be treated as a partnership for tax purposes, an MLP must
receive at least 90% of its income from qualifying sources as set forth in Section 7704(d) of the Code. These qualifying sources include
activities such as the exploration, development, mining, production, processing, refining, transportation, storage and marketing of mineral
or natural resources. To the extent that an MLP’s interests are concentrated in a particular industry or sector, such as the energy
sector, the MLP will be negatively impacted by economic events adversely impacting that industry or sector.

 

MLPs that are formed as limited partnerships generally
have two classes of owners, the general partner and limited partners, while MLPs that are formed as limited liability companies generally
have two analogous classes of owners, the managing member and the members. For purposes of this section, references to general partners
also apply to managing members and references to limited partners also apply to members.

 

The general partner is typically owned by a major
energy company, an investment fund, the direct management of the MLP or is an entity owned by one or more of such parties. The general
partner may be structured as a private or publicly traded corporation or other entity. The general partner typically controls the operations
and management of the MLP through an equity interest of as much as 2% in the MLP plus, in many cases, ownership of common units and subordinated
units. A holder of general partner interests can be liable under certain circumstances for amounts greater than the amount of the holder’s
investment in the general partner interest. General partner interests are not publicly traded and generally cannot be converted into common
units. The general partner interest can be redeemed by the MLP if the MLP unitholders choose to remove the general partner, typically
with a supermajority vote by limited partner unitholders.

 

Limited partners own the remainder of the MLP through
ownership of common units and have a limited role in the MLP’s operations and management. Common units are listed and traded on
U.S. securities exchanges, with their value fluctuating predominantly based on prevailing market conditions and the success of the MLP.
Unlike owners of common stock of a corporation, owners of common units have limited voting rights and have no ability annually to elect
directors. In the event of liquidation, common units have preference over subordinated units, but not over debt or preferred units, to
the remaining assets of the MLP.

 

MLPs are typically structured such that common units
and general partner interests have first priority to receive quarterly cash distributions up to an established minimum amount (“minimum
quarterly distributions” or “MQD”). Common and general partner interests also accrue arrearages in distributions to
the extent the MQD is not paid. Once common and general partner interests have been paid, subordinated units receive distributions of
up to the MQD; however, subordinated units do not accrue arrearages. Distributable cash in excess of the MQD paid to both common and subordinated
units is distributed to both common and subordinated units generally on a pro rata basis. The general partner is also eligible to receive
incentive distributions if the general partner operates the business in a manner which results in distributions paid per common unit surpassing
specified target levels. As the general partner increases cash distributions to the limited partners, the general partner receives an
increasingly higher percentage of the incremental cash distributions. A common arrangement provides that the general partner can reach
a tier where it receives 50% of every incremental dollar paid to common and subordinated unit holders. These incentive distributions encourage
the general partner to streamline costs, increase capital expenditures and acquire assets in order to increase the partnership’s
cash flow and raise the quarterly cash distribution in order to reach higher tiers. Such results benefit all security holders of the MLP.

 

Exchange-Traded Notes (“ETNs”)

 

ETNs are generally notes representing debt of the
issuer, usually a financial institution. ETNs combine both aspects of bonds and ETFs. An ETN’s returns are based on the performance
of one or more underlying assets, reference rates or indexes, minus fees and expenses. Similar to ETFs, ETNs are listed on an exchange
and traded in the secondary market. However, unlike an ETF, an ETN can be held until the ETN’s maturity, at which time the issuer
will pay a return linked to the performance of the specific asset, index or rate (“reference instrument”) to which the ETN
is linked minus certain fees. Unlike regular bonds, ETNs do not make periodic interest payments, and principal is not protected. ETNs
are not registered or regulated as investment companies under the 1940 Act.

 

The value of an ETN may be influenced by, among other
things, time to maturity, level of supply and demand for the ETN, volatility and lack of liquidity in underlying markets, changes in the
applicable interest rates, the performance of the reference instrument, changes in the issuer’s credit rating and economic, legal,
political or geographic events that affect the reference instrument. An ETN that is tied to a reference instrument may not replicate the
performance of the reference instrument. ETNs also incur certain expenses not incurred by their applicable reference instrument. Some
ETNs that use leverage can, at times, be relatively illiquid and, thus, they may be difficult to purchase or sell at a fair price. Levered
ETNs are subject to the same risk as other instruments that use leverage in any form. While leverage allows for greater potential return,
the potential for loss is also greater. Finally, additional losses may be incurred if the investment loses value because, in addition
to the money lost on the investment, the loan still needs to be repaid.

 

Because the return on the ETN is dependent on the
issuer’s ability or willingness to meet its obligations, the value of the ETN may change due to a change in the issuer’s credit
rating, despite no change in the underlying reference instrument. The market value of ETN shares may differ from the value of the reference
instrument. This difference in price may be due to the fact that the supply and demand in the market for ETN shares at any point in time
is not always identical to the supply and demand in the market for the assets underlying the reference instrument that the ETN seeks to
track.

 

There may be restrictions on a Fund’s right
to redeem its investment in an ETN, which are generally meant to be held until maturity. A Fund’s decision to sell its ETN holdings
may be limited by the availability of a secondary market. A Fund could lose some or all of the amount invested in an ETN.

 

Foreign Securities

 

Foreign securities include equity securities of foreign
entities, obligations of foreign branches of U.S. banks and of foreign banks, including, without limitation, European Certificates of
Deposit, European Time Deposits, European Bankers’ Acceptances, Canadian Time Deposits, Europaper and Yankee Certificates of Deposit,
and investments in Canadian Commercial Paper and foreign securities. These instruments have investment risks that differ in some respects
from those related to investments in obligations of U.S. domestic issuers. Such risks include future adverse political and economic developments,
the possible imposition of withholding taxes on interest or other income, possible seizure, nationalization, or expropriation of foreign
deposits, the possible establishment of exchange controls or taxation at the source, greater fluctuations in value due to changes in exchange
rates, or the adoption of other foreign governmental restrictions which might adversely affect the payment of principal and interest on
such obligations. Such investments may also entail higher custodial fees and sales commissions than domestic investments. Foreign issuers
of securities or obligations are often subject to accounting treatment and engage in business practices different from those respecting
domestic issuers of similar securities or obligations. Foreign branches of U.S. banks and foreign banks may be subject to less stringent
reserve requirements than those applicable to domestic branches of U.S. banks.

 

Investments in Emerging Markets. Investing
in emerging markets involves additional risks and special considerations not typically associated with investing in other more established
economies or markets. Such risks may include (i) increased risk of nationalization or expropriation of assets or confiscatory taxation;
(ii) greater social, economic and political uncertainty, including war; (iii) higher dependence on exports and the corresponding importance
of international trade; (iv) greater volatility, less liquidity and smaller capitalization of markets; (v) greater volatility in currency
exchange rates; (vi) greater risk of inflation; (vii) greater controls on foreign investment and limitations on realization of investments,
repatriation of invested capital and on the ability to exchange local currencies for U.S. dollars; (viii) increased likelihood of governmental
involvement in and control over the economy; (ix) governmental decisions to cease support of economic reform programs or to impose centrally
planned economies; (x) differences in auditing and financial reporting standards which may result in the unavailability of material information
about issuers; (xi) less extensive regulation of the markets; (xii) longer settlement periods for transactions and less reliable clearance
and custody arrangements; (xiii) less developed corporate laws regarding fiduciary duties of officers and directors and the protection
of investors; (xiv) certain considerations regarding the maintenance of a Fund’s securities with local brokers and securities depositories
and (xv) the imposition of withholding or other taxes on dividends, interest, capital gains, other income or gross sale or disposition
proceeds.

 

Repatriation of investment income, assets and the
proceeds of sales by foreign investors may require governmental registration and/or approval in some emerging market countries. A Fund
could be adversely affected by delays in or a refusal to grant any required governmental registration or approval for such repatriation
or by withholding taxes imposed by emerging market countries on interest or dividends paid on securities held by the Fund or gains from
the disposition of such securities.

 

In emerging markets, there is often less government
supervision and regulation of business and industry practices, stock exchanges, over-the-counter markets, brokers, dealers, counterparties
and issuers than in other more established markets. Any regulatory supervision that is in place may be subject to manipulation or control.
Some emerging market countries do not have mature legal systems comparable to those of more developed countries. Moreover, the process
of legal and regulatory reform may not be proceeding at the same pace as market developments, which could result in investment risk. Legislation
to safeguard the rights of private ownership may not yet be in place in certain areas, and there may be the risk of conflict among local,
regional and national requirements. In certain cases, the laws and regulations governing investments in securities may not exist or may
be subject to inconsistent or arbitrary appreciation or interpretation. Both the independence of judicial systems and their immunity from
economic, political or nationalistic influences remain largely untested in many countries. A Fund may also encounter difficulties in pursuing
legal remedies or in obtaining and enforcing judgments in local courts.

 

The Funds consider a company to be an emerging market
company if: (i) its principal securities trading market is in an emerging market country, (ii) alone or on a consolidated basis it derives
50% or more of its annual revenue or profits from goods produced, sales made or services performed in emerging market countries or has
at least 50% of its assets in emerging markets countries or (iii) it is organized under the laws of, or has a principal office in, an
emerging market country. By applying this test, it is possible that a particular company could be deemed to be located in more than one
country. A company that is deemed to be located in both an emerging market country and a non-emerging market country may be considered
by the Funds to be an emerging market company.

 

Sovereign Debt Obligations. Sovereign debt
obligations are issued or guaranteed by foreign governments or their agencies. Sovereign debt may be in the form of conventional securities
or other types of debt instruments such as loans or loan participations. Governmental entities responsible for repayment of the debt may
be unable or unwilling to repay principal and pay interest when due, and may require renegotiation or reschedule of debt payments. In
addition, prospects for repayment of principal and payment of interest may depend on political as well as economic factors. Although some
sovereign debt, such as Brady Bonds, is collateralized by U.S. government securities, repayment of principal and payment of interest is
not guaranteed by the U.S. government.

 

Foreign Agency Debt Obligations. A Fund may
invest in uncollateralized bonds issued by agencies, subdivisions or instrumentalities of foreign governments. Bonds issued by these foreign
government agencies, subdivisions or instrumentalities are generally backed only by the creditworthiness and reputation of the entities
issuing the bonds and may not be backed by the full faith and credit of the foreign government. Moreover, a foreign government that explicitly
provides its full faith and credit to a particular entity may be, due to changed circumstances, unable or unwilling to provide that support.
A foreign agency’s operations and financial condition are influenced by the foreign government’s economic and other policies.
Changes to the financial condition or credit rating of a foreign government may cause the value of debt issued by that particular foreign
government’s agencies, subdivisions or instrumentalities to decline. During periods of economic uncertainty, the trading of foreign
agency bonds may be less liquid while market prices may be more volatile than prices of other bonds. Additional risks associated with
foreign agency investing include differences in accounting, auditing and financial reporting standards; adverse changes in investment
or exchange control regulations; political instability; and potential restrictions on the flow of international capital.

 

Obligations of Supranational Entities. Supranational
entities are entities established through the joint participation of several governments, and include the Asian Development Bank, World
Bank, African Development Bank, European Economic Community, European Investment Bank and the Nordic Investment Bank. The governmental
members, or “stockholders,” usually make initial capital contributions to the supranational entity and, in many cases, are
committed to make additional capital contributions if the supranational entity is unable to repay its borrowings. There is no guarantee
that one or more stockholders of a supranational entity will continue to make any necessary additional capital contributions. If such
contributions are not made, the entity may be unable to pay interest or repay principal on its debt securities, and a Fund may lose money
on such investments.

 

Investment Funds. Some emerging countries currently
prohibit direct foreign investment in the securities of their companies. Certain emerging countries, however, permit indirect foreign
investment in the securities of companies listed and traded on their stock exchanges through investment funds that they have specifically
authorized. Investments in these investment funds are subject to the provisions of the 1940 Act. If a Fund invests in such investment
funds, shareholders will bear not only their proportionate share of the expenses (including operating expenses and the fees of the Adviser),
but also will indirectly bear similar expenses of the underlying investment funds. In addition, these investment funds may trade at a
premium over their net asset value.

 

Risks of Foreign Securities:

 

Foreign securities, foreign currencies, and securities
issued by U.S. entities with substantial foreign operations may involve significant risks in addition to the risks inherent in U.S. investments.

 

Political and Economic Factors. Local political, economic, regulatory,
or social instability, military action or unrest, or adverse diplomatic developments may affect the value of foreign investments. Listed
below are some of the more important political and economic factors that could negatively affect an investment in foreign securities:

 

▪ The economies of foreign countries may differ from the economy of the United
States in such areas as growth of gross national product, rate of inflation, capital reinvestment, resource self-sufficiency, budget deficits
and national debt;

 

▪ Foreign governments sometimes participate to a significant degree, through
ownership interests or regulation, in their respective economies. Actions by these governments could significantly influence the market
prices of securities and payment of dividends;

 

▪ The economies of many foreign countries are dependent on international trade
and their trading partners and they could be severely affected if their trading partners were to enact protective trade barriers and economic
conditions;

 

▪ The internal policies of a particular foreign country may be less stable
than in the United States. Other countries face significant external political risks, such as possible claims of sovereignty by other
countries or tense and sometimes hostile border clashes; and

 

▪ A foreign government may act adversely to the interests of U.S. investors,
including expropriation or nationalization of assets, confiscatory taxation and other restrictions on U.S. investment. A country may restrict
or control foreign investments in its securities markets. These restrictions could limit a Fund’s ability to invest in a particular
country or make it very expensive for the Fund to invest in that country. Some countries require prior governmental approval or limit
the types or amount of securities or companies in which a foreigner can invest. Other countries may restrict the ability of foreign investors
to repatriate their investment income and capital gains.

 

Periodic U.S. Government restrictions on
investments in issuers from certain foreign countries may result in a Fund having to sell such prohibited securities at inopportune times.
Such prohibited securities may have less liquidity as a result of such U.S. Government designation and the market price of such prohibited
securities may decline, which may cause the Fund to incur losses.

 

On January 31, 2020, the United Kingdom
(the “UK”) formally withdrew from the European Union (the “EU”) (commonly referred to as “Brexit”)
and entered an 11-month transition period during which the UK remained part of the EU single market and customs union, the laws of which
governed the economic, trade and security relations between the UK and EU. The transition period concluded on December 31, 2020, and the
UK left the EU single market and customs union under the terms of a new trade agreement. The agreement governs the new relationship between
the UK and EU with respect to trading goods and services, but critical aspects of the relationship remain unresolved and subject to further
negotiation and agreement. The political, regulatory and economic consequences of Brexit are uncertain, and the ultimate ramifications
may not be known for some time. The effects of Brexit on the UK and EU economies and the broader global economy could be significant,
resulting in negative impacts, such as business and trade disruptions, increased volatility and illiquidity, and potentially lower economic
growth of markets in the UK, EU and globally, which could negatively impact the value of the Funds’ investments. Brexit could also lead
to legal uncertainty and politically divergent national laws and regulations while the new relationship between the UK and EU is further
defined and the UK determines which EU laws to replace or replicate. Additionally, depreciation of the British pound sterling and/or the
euro in relation to the U.S. dollar following Brexit could adversely affect Fund investments denominated in the British pound sterling
and/or the euro, regardless of the performance of the investment. Whether or not a Fund invests in securities of issuers located in Europe
or with significant exposure to European issuers or countries, these events could negatively affect the value and liquidity of the Fund’s
investments due to the interconnected nature of the global economy and capital markets.

 

Information and Supervision. There is generally less publicly available
information about foreign companies than companies based in the United States. For example, there are often no reports and ratings published
about foreign companies comparable to the ones written about U.S. companies. Foreign companies are typically not subject to uniform accounting,
auditing and financial reporting standards, practices and requirements comparable to those applicable to U.S. companies. The lack of comparable
information makes investment decisions concerning foreign companies more difficult and less reliable than those concerning domestic companies.

 

Stock Exchange and Market Risk. The Adviser and the Sub-Adviser anticipate
that in most cases an exchange or over-the-counter market located outside of the United States will be the best available market for foreign
securities. Foreign stock markets, while growing in volume and sophistication, are generally not as developed as the markets in the United
States. Foreign stock markets tend to differ from those in the United States in a number of ways.

 

Foreign stock markets:

 

▪ Are generally more volatile than, and not as developed or efficient as,
those in the United States;

 

▪ Have substantially less volume;

 

▪ Trade securities that tend to be less liquid and experience rapid and erratic
price movements;

 

▪ Have generally higher commissions and are subject to set minimum rates,
as opposed to negotiated rates;

 

▪ Employ trading, settlement and custodial practices less developed than those
in U.S. markets; and

 

▪ May have different settlement practices, which may cause delays and increase
the potential for failed settlements.

 

Foreign markets may offer less
protection to shareholders than U.S. markets because:

 

▪ Foreign accounting, auditing, and financial reporting requirements may render
a foreign corporate balance sheet more difficult to understand and interpret than one subject to U.S. law and standards;

 

▪ Adequate public information on foreign issuers may not be available, and
it may be difficult to secure dividends and information regarding corporate actions on a timely basis;

 

▪ In general, there is less overall governmental supervision and regulation
of securities exchanges, brokers, and listed companies than in the United States;

 

▪ Over-the-counter markets tend to be less regulated than stock exchange markets
and, in certain countries, may be totally unregulated;

 

▪ Economic or political concerns may influence regulatory enforcement and
may make it difficult for shareholders to enforce their legal rights; and

 

▪ Restrictions on transferring securities within the United States or to U.S.
persons may make a particular security less liquid than foreign securities of the same class that are not subject to such restrictions.

 

Foreign Currency Risk. While the Funds denominate their net asset
value in U.S. dollars, the securities of foreign companies are frequently denominated in foreign currencies. Thus, a change in the value
of a foreign currency against the U.S. dollar will result in a corresponding change in value of securities denominated in that currency.
Some of the factors that may impair the investments denominated in a foreign currency are:

 

▪ It may be expensive to convert foreign currencies into U.S. dollars and
vice versa;

 

▪ Complex political and economic factors may significantly affect the values
of various currencies, including the U.S. dollar, and their exchange rates;

 

▪ Government intervention may increase risks involved in purchasing or selling
foreign currency options, forward contracts and futures contracts, since exchange rates may not be free to fluctuate in response to other
market forces;

 

▪ There may be no systematic reporting of last sale information for foreign
currencies or regulatory requirement that quotations available through dealers or other market sources be firm or revised on a timely
basis;

 

▪ Available quotation information is generally representative of very large
round-lot transactions in the inter-bank market and thus may not reflect exchange rates for smaller odd-lot transactions (less than $1
million) where rates may be less favorable; and

 

▪ The inter-bank market in foreign currencies is a global, around-the-clock
market. To the extent that a market is closed while the markets for the underlying currencies remain open, certain markets may not always
reflect significant price and rate movements.

 

Taxes. Certain foreign governments levy withholding taxes on dividend
and interest income. Although in some countries it is possible for the Funds to recover a portion of these taxes, the portion that cannot
be recovered will reduce the income the Funds receive from their investments.

 

Investment in the People’s Republic of
China (“China”)

 

China is an emerging market, and as a result, investments
in securities of companies organized and listed in China may be subject to liquidity constraints and significantly higher volatility,
from time to time, than investments in securities of more developed markets. China may be subject to considerable government intervention
and varying degrees of economic, political and social instability. These factors may result in, among other things, a greater risk of
stock market, interest rate, and currency fluctuations, as well as inflation. Accounting, auditing and financial reporting standards in
China are different from U.S. standards and, therefore, disclosure of certain material information may not be made, may be less available,
or may be less reliable. It may also be difficult or impossible for a Fund to obtain or enforce a judgment in a Chinese court. In addition,
periodically there may be restrictions on investments in Chinese companies. For example, on November 12, 2020, the President of the United
States signed an Executive Order prohibiting U.S. persons from purchasing or investing in publicly-traded securities of companies identified
by the U.S. Government as “Communist Chinese military companies” or in instruments that are derivative of, or are designed
to provide investment exposure to, those companies. The universe of affected securities can change from time to time. As a result of an
increase in the number of investors looking to sell such securities, or because of an inability to participate in an investment that the
Adviser or the Sub-Adviser otherwise believes is attractive, a Fund may incur losses. Certain securities that are or become designated
as prohibited securities may have less liquidity as a result of such designation and the market price of such prohibited securities may
decline, potentially causing losses to a Fund. In addition, the market for securities of other Chinese-based issuers may also be negatively
impacted, resulting in reduced liquidity and price declines.

 

A Fund may incur losses due to limited investment
capabilities, or may not be able to fully implement or pursue its investment objective or strategy, due to local investment restrictions,
illiquidity of the Chinese domestic securities market, and/or delay or disruption in execution and settlement of trades.

 

Investments in China A Shares. A Fund may invest
in A Shares of companies based in China through the Shanghai-Hong Kong Stock Connect program or Shenzhen-Hong Kong Stock Connect program
(collectively, “Stock Connect”) subject to any applicable regulatory limits. Stock Connect is a securities trading and clearing
linked program developed by Hong Kong Exchanges and Clearing Limited (“HKEx”), the Hong Kong Securities Clearing Company Limited
(“HKSCC”), Shanghai Stock Exchange (“SSE”), Shenzhen Stock Exchange (“SZSE”) and China Securities
Depository and Clearing Corporation Limited (“ChinaClear”) with the aim of achieving mutual stock market access between China
and Hong Kong. This program allows foreign investors to trade certain SSE-listed or SZSE-listed China A Shares through their Hong Kong
based brokers. All Hong Kong and overseas investors in Stock Connect will trade and settle SSE or SZSE securities in the offshore Renminbi
(“CNH”) only. A Fund will be exposed to any fluctuation in the exchange rate between the U.S. Dollar and CNH in respect of
such investments.

 

By seeking to invest in the domestic securities markets
of China via Stock Connect a Fund is subject to the following additional risks:

 

General Risks. The relevant regulations are relatively untested and
subject to change. There is no certainty as to how they will be applied, which could adversely affect the Fund. The program requires use
of new information technology systems which may be subject to operational risk due to the program’s cross-border nature. If the
relevant systems fail to function properly, trading in both Hong Kong and Chinese markets through the program could be disrupted.

 

Stock Connect will only operate on days
when both the Chinese and Hong Kong markets are open for trading and when banks in both markets are open on the corresponding settlement
days. There may be occasions when it is a normal trading day for the Chinese market but Stock Connect is not trading. As a result, the
Fund may be subject to the risk of price fluctuations in China A Shares when the Fund cannot carry out any China A Shares trading.

 

Foreign Shareholding Restrictions. The trading, acquisition, disposal
and holding of securities under Stock Connect are subject at all times to applicable law, which imposes purchasing and holding limits.
These limitations and restrictions may have the effect of restricting an investor’s ability to purchase, subscribe for or hold any
China A Shares or to take up any entitlements in respect of such shares, or requiring an investor to reduce its holding in any securities,
whether generally or at a particular point of time, and whether by way of forced sale or otherwise. As such, investors may incur loss
arising from such limitations, restrictions and/or forced sale.

 

China A Shares Market Suspension Risk. China A Shares may only be
bought from, or sold to, the Fund at times when the relevant China A Shares may be sold or purchased on the relevant Chinese stock exchange.
SSE and SZSE typically have the right to suspend or limit trading in any security traded on the relevant exchange if necessary to ensure
an orderly and fair market and that risks are managed prudently. In the event of the suspension, the Fund’s ability to access the
Chinese market will be adversely affected.

 

Clearing and Settlement Risk. HKSCC and ChinaClear have established
the clearing links and each will become a participant of each other to facilitate clearing and settlement of cross-boundary trades. For
cross-boundary trades initiated in a market, the clearing house of that market will on one hand clear and settle with its own clearing
participants and on the other hand undertake to fulfill the clearing and settlement obligations of its clearing participants with the
counterparty clearing house.

 

In the event ChinaClear defaults, HKSCC’s
liabilities under its market contracts with clearing participants may be limited to assisting clearing participants with claims. It is
anticipated that HKSCC will act in good faith to seek recovery of the outstanding stocks and monies from ChinaClear through available
legal channels or the liquidation of ChinaClear. Regardless, the process of recovery could be delayed and the Fund may not fully recover
its losses or its Stock Connect securities.

 

Legal/Beneficial Ownership. Where securities are held in custody
on a cross-border basis there are specific legal and beneficial ownership risks linked to the compulsory requirements of the local central
securities depositaries, HKSCC and ChinaClear.

 

As in other emerging markets, the legislative
framework is only beginning to develop the concept of legal/formal ownership and of beneficial ownership or interest in securities. In
addition, HKSCC, as nominee holder, does not guarantee the title to Stock Connect securities held through it and is under no obligation
to enforce title or other rights associated with ownership on behalf of beneficial owners. Consequently, the courts may consider that
any nominee or custodian as registered holder of Stock Connect securities would have full ownership thereof, and that those Stock Connect
securities would form part of the pool of assets of such entity available for distribution to creditors of such entities and/or that a
beneficial owner may have no rights whatsoever in respect thereof. Consequently, neither the Fund nor its custodian can ensure that the
Fund’s ownership of these securities or title thereto is assured.

 

To the extent that HKSCC is deemed to be
performing safekeeping functions with respect to assets held through it, it should be noted that the Fund and its custodian will have
no legal relationship with HKSCC and no direct legal recourse against HKSCC in the event that the Fund suffers losses resulting from the
performance or insolvency of HKSCC. In the event that the Fund suffers losses due to the negligence, or willful default, or insolvency
of HKSCC, the Fund may not be able to institute legal proceedings, file any proof of claim in any insolvency proceeding or take any similar
action. In the event of the insolvency of HKSCC, the Fund may not have any proprietary interest in the China A Shares traded through the
Stock Connect program and may be an unsecured general creditor in respect of any claim the Fund may have in respect of them. Consequently,
the value of the Fund’s investment in China A Shares and the amount of its income and gains could be adversely affected.

 

Operational Risk. The HKSCC provides clearing, settlement, nominee
functions and other related services in respect of trades executed by Hong Kong market participants. Chinese regulations which include
certain restrictions on selling and buying will apply to all market participants. Trading via Stock Connect may require pre-delivery or
pre-validation of cash or shares to or by a broker. If the cash or shares are not in the broker’s possession before the market opens
on the day of selling, the sell order will be rejected. As a result, the Fund may not be able to purchase and/or dispose of holdings of
China A Shares in a timely manner.

 

Day Trading Restrictions. Day (turnaround) trading is not permitted
through Stock Connect. Investors buying A Shares on day T can only sell the shares on and after day T+1 subject to any Stock Connect rules.

 

Quota Limitations. The Stock Connect program is subject to daily
quota limitations which may restrict the Fund’s ability to invest in China A Shares through the program on a timely basis.

 

Investor Compensation. The Fund will not benefit from the China Securities
Investor Protection Fund in mainland China. The China Securities Investor Protection Fund is established to pay compensation to investors
in the event that a securities company in mainland China is subject to compulsory regulatory measures (such as dissolution, closure, bankruptcy,
and administrative takeover by the China Securities Regulatory Commission). Since the Fund is carrying out trading of China A Shares through
securities brokers in Hong Kong, but not mainland China brokers, therefore, it is not protected by the China Securities Investor Protection
Fund.

 

That said, if the Fund suffers losses due
to default matters of its securities brokers in Hong Kong in relation to the investment of China A Shares through the Stock Connect program,
it would be compensated by Hong Kong’s Investor Compensation Fund.

 

Tax within China. Uncertainties in Chinese
tax rules governing taxation of income and gains from investments in A Shares via Stock Connect could result in unexpected tax liabilities
for the Funds. A Fund’s investments in securities, including A Shares, issued by Chinese companies may cause the Fund to become
subject to withholding and other taxes imposed by China.

 

If a Fund were considered to be a tax resident of
China, it would be subject to Chinese corporate income tax at the rate of 25% on its worldwide taxable income. If a Fund were considered
to be a non-resident enterprise with a “permanent establishment” in China, it would be subject to Chinese corporate income
tax of 25% on the profits attributable to the permanent establishment. The Adviser and the Sub-Adviser intend to operate the Funds in
a manner that will prevent them from being treated as a tax resident of China and from having a permanent establishment in China. It is
possible, however, that China could disagree with that conclusion, or that changes in Chinese tax law could affect the Chinese corporate
income tax status of the Funds.

 

China generally imposes withholding income tax at
a rate of 10% on dividends, premiums, interest and capital gains originating in China and paid to a company that is not a resident of
China for tax purposes and that has no permanent establishment in China. The withholding is in general made by the relevant Chinese tax
resident company making such payments. In the event the relevant Chinese tax resident company fails to withhold the relevant Chinese withholding
income tax or otherwise fails to pay the relevant withholding income tax to Chinese tax authorities, the competent tax authorities may,
at their sole discretion, impose tax obligations on a Fund.

 

The Ministry of Finance of China, the State Administration
of Taxation of China and the China Securities Regulatory Commission issued Caishui [2014] No. 81 on October 31, 2014 (“Notice 81”)
and Caishui [2016] No. 127 on November 5, 2016 (“Notice 127”), both of which state that the capital gain from disposal of
China A Shares by foreign investors enterprises via Stock Connect will be temporarily exempt from withholding income tax. Notice 81 and
Notice 127 also state that the dividends derived from A Shares by foreign investors enterprises is subject to a 10% withholding income
tax.

 

There is no indication of how long the temporary exemption
will remain in effect and the Funds may be subject to such withholding income tax in the future. If, in the future, China begins applying
tax rules regarding the taxation of income from investments through Stock Connect and/or begins collecting capital gains taxes on such
investments, a Fund could be subject to withholding income tax liability if the Fund determines that such liability cannot be reduced
or eliminated by applicable tax treaties. The Chinese tax authorities may in the future issue further guidance in this regard and with
potential retrospective effect. The negative impact of any such tax liability on a Fund’s return could be substantial.

 

In light of the uncertainty as to how gains or income
that may be derived from a Fund’s investments in China will be taxed, the Fund reserves the right to provide for withholding tax
on such gains or income and withhold tax for the account of the Fund. Withholding tax may already be withheld at a broker/custodian level.

 

Any tax provision, if made, will be reflected in the
net asset value of a Fund at the time the provision is used to satisfy tax liabilities. If the actual applicable tax levied by the Chinese
tax authorities is greater than that provided for by a Fund so that there is a shortfall in the tax provision amount, the net asset value
of the Fund may suffer as the Fund will have to bear additional tax liabilities. In this case, then existing and new shareholders in the
Fund will be disadvantaged. If the actual applicable tax levied by Chinese tax authorities is less than that provided for by a Fund so
that there is an excess in the tax provision amount, shareholders who redeemed Fund shares before the Chinese tax authorities’ ruling,
decision or guidance may have been disadvantaged as they would have borne any loss from the Fund’s overprovision. In this case,
the then existing and new shareholders in the Fund may benefit if the difference between the tax provision and the actual taxation liability
can be returned to the account of the Fund as assets thereof. Any excess in the tax provision amount shall be treated as property of the
Fund, and shareholders who previously transferred or redeemed their Fund shares will not be entitled or have any right to claim any part
of the amount representing the excess.

 

Stamp duty under the Chinese laws generally applies
to the execution and receipt of taxable documents, which include contracts for the sale of A Shares traded on Chinese stock exchanges.
In the case of such contracts, the stamp duty is currently imposed on the seller but not on the purchaser, at the rate of 0.1%. The sale
or other transfer by the Adviser or the Sub-Adviser of A Shares will accordingly be subject to Chinese stamp duty, but a Fund will not
be subject to Chinese stamp duty when it acquires A Shares.

 

The Funds may also potentially be subject to Chinese
value added tax at the rate of 6% on capital gains derived from trading of A Shares and interest income (if any). Existing guidance provides
a temporary value added tax exemption for Hong Kong and overseas investors in respect of their gains derived from the trading of Chinese
securities through Stock Connect. Because there is no indication how long the temporary exemption will remain in effect, the Funds may
be subject to such value added tax in the future. In addition, urban maintenance and construction tax (currently at rates ranging from
1% to 7%), educational surcharge (currently at the rate of 3%) and local educational surcharge (currently at the rate of 2%) (collectively,
the “surtaxes”) are imposed based on value added tax liabilities, so if a Fund were liable for value added tax it would also
be required to pay the applicable surtaxes.

 

The Chinese rules for taxation of Stock Connect are
evolving, and certain of the tax regulations to be issued by the State Administration of Taxation of China and/or Ministry of Finance
of China to clarify the subject matter may apply retrospectively, even if such rules are adverse to the Funds and their shareholders.
The imposition of taxes, particularly on a retrospective basis, could have a material adverse effect on a Fund’s returns. Before
further guidance is issued and is well established in the administrative practice of the Chinese tax authorities, the practices of the
Chinese tax authorities that collect Chinese taxes relevant to a Fund may differ from, or be applied in a manner inconsistent with, the
practices with respect to the analogous investments described herein or any further guidance that may be issued. The value of a Fund’s
investment in China and the amount of its income and gains could be adversely affected by an increase in tax rates or change in the taxation
basis.

 

The above information is only a general summary of
the potential Chinese tax consequences that may be imposed on the Funds and their shareholders either directly or indirectly and should
not be taken as a definitive, authoritative or comprehensive statement of the relevant matter. Shareholders should seek their own tax
advice on their tax position with regard to their investment in the Funds.

 

The Chinese government has implemented a number of
tax reform policies in recent years. The current tax laws and regulations may be revised or amended in the future. Any revision or amendment
in tax laws and regulations may affect the after-taxation profit of Chinese companies and foreign investors in such companies, such as
the Funds.

 

Money Market Securities

 

Money market securities include short-term U.S. government
securities; custodial receipts evidencing separately traded interest and principal components of securities issued by the U.S. Treasury;
commercial paper rated in the highest short-term rating category by a nationally recognized statistical ratings organization (“NRSRO”),
such as S&P Global Ratings (“S&P”) or Moody’s Investor Services, Inc. (“Moody’s”), or determined
by the Adviser and the Sub-Adviser to be of comparable quality at the time of purchase; short-term bank obligations (certificates of deposit,
time deposits and bankers’ acceptances) of U.S. commercial banks with assets of at least $1 billion as of the end of their most
recent fiscal year; and repurchase agreements involving such securities. Each of these money market securities are described below. For
a description of ratings, see “Appendix A – Description of Ratings” to this SAI.

 

U.S. Government Securities

 

The Funds may invest in U.S. government securities.
Securities issued or guaranteed by the U.S. government or its agencies or instrumentalities include U.S. Treasury securities, which are
backed by the full faith and credit of the U.S. Treasury and which differ only in their interest rates, maturities, and times of issuance.
U.S. Treasury bills have initial maturities of one-year or less; U.S. Treasury notes have initial maturities of one to ten years; and
U.S. Treasury bonds generally have initial maturities of greater than ten years. U.S. Treasury notes and bonds typically pay coupon interest
semi-annually and repay the principal at maturity. Certain U.S. government securities are issued or guaranteed by agencies or instrumentalities
of the U.S. government including, but not limited to, obligations of U.S. government agencies or instrumentalities such as the Federal
National Mortgage Association (“Fannie Mae”), the Government National Mortgage Association (“Ginnie Mae”), the
Small Business Administration, the Federal Farm Credit Administration, the Federal Home Loan Banks, Banks for Cooperatives (including
the Central Bank for Cooperatives), the Federal Land Banks, the Federal Intermediate Credit Banks, the Tennessee Valley Authority, the
Export-Import Bank of the United States, the Commodity Credit Corporation, the Federal Financing Bank, the Student Loan Marketing Association,
the National Credit Union Administration and the Federal Agricultural Mortgage Corporation (“Farmer Mac”).

 

Some obligations issued or guaranteed by U.S. government
agencies and instrumentalities, including, for example, Ginnie Mae pass-through certificates, are supported by the full faith and credit
of the U.S. Treasury. Other obligations issued by or guaranteed by federal agencies, such as those securities issued by Fannie Mae, are
supported by the discretionary authority of the U.S. government to purchase certain obligations of the federal agency. Additionally, some
obligations are issued by or guaranteed by federal agencies, such as those of the Federal Home Loan Banks, which are supported by the
right of the issuer to borrow from the U.S. Treasury. While the U.S. government provides financial support to such U.S. government-sponsored
federal agencies, no assurance can be given that the U.S. government will always do so, since the U.S. government is not so obligated
by law. Guarantees of principal by U.S. government agencies or instrumentalities may be a guarantee of payment at the maturity of the
obligation so that in the event of a default prior to maturity there might not be a market and thus no means of realizing on the obligation
prior to maturity. Guarantees as to the timely payment of principal and interest do not extend to the value or yield of these securities
nor to the value of the Funds’ shares.

 

On September 7, 2008, the U.S. Treasury announced
a federal takeover of Fannie Mae and the Federal Home Loan Mortgage Corporation (“Freddie Mac”), placing the two federal instrumentalities
in conservatorship. Under the takeover, the U.S. Treasury agreed to acquire $1 billion of senior preferred stock of each instrumentality
and obtained warrants for the purchase of common stock of each instrumentality (the “Senior Preferred Stock Purchase Agreement”
or “Agreement”). Under the Agreement, the U.S. Treasury pledged to provide up to $200 billion per instrumentality as needed,
including the contribution of cash capital to the instrumentalities in the event their liabilities exceed their assets. This was intended
to ensure that the instrumentalities maintain a positive net worth and meet their financial obligations, preventing mandatory triggering
of receivership. On December 24, 2009, the U.S. Treasury announced that it was amending the Agreement to allow the $200 billion cap on
the U.S. Treasury’s funding commitment to increase as necessary to accommodate any cumulative reduction in net worth through the
end of 2012. The unlimited support the U.S. Treasury extended to the two companies expired at the beginning of 2013 – Fannie Mae’s
support is now capped at $125 billion and Freddie Mac has a limit of $149 billion.

 

On August 17, 2012, the U.S. Treasury announced that
it was again amending the Agreement to terminate the requirement that Fannie Mae and Freddie Mac each pay a 10% annual dividend. Instead,
the companies will transfer to the U.S. Treasury on a quarterly basis all profits earned during a quarter that exceed a capital reserve
amount. The capital reserve amount was $3 billion in 2013, and decreased by $600 million in each subsequent year through 2017. It is believed
that the new amendment puts Fannie Mae and Freddie Mac in a better position to service their debt because the companies no longer have
to borrow from the U.S. Treasury to make fixed dividend payments. As part of the new terms, Fannie Mae and Freddie Mac also will be required
to reduce their investment portfolios over time. On December 21, 2017, the U.S. Treasury announced that it was again amending the Agreement
to reinstate the $3 billion capital reserve amount.

 

Fannie Mae and Freddie Mac are the subject of several
continuing class action lawsuits and investigations by federal regulators over certain accounting, disclosure or corporate governance
matters, which (along with any resulting financial restatements) may adversely affect the guaranteeing entities. Importantly, the future
of the entities is in serious question as the U.S. government reportedly is considering multiple options, ranging from nationalization,
privatization, consolidation, or abolishment of the entities.

 

U.S. Treasury Obligations. U.S. Treasury obligations consist of direct
obligations of the U.S. Treasury, including Treasury bills, notes and bonds, and separately traded interest and principal component parts
of such obligations, including those transferable through the Federal book-entry system known as Separate Trading of Registered Interest
and Principal of Securities (“STRIPS”). The STRIPS program lets investors hold and trade the individual interest and principal
components of eligible Treasury notes and bonds as separate securities. Under the STRIPS program, the principal and interest components
are separately issued by the U.S. Treasury at the request of depository financial institutions, which then trade the component parts separately.

 

Municipal Securities

 

Municipal securities, including municipal bonds and
municipal notes, consist of: (i) debt obligations issued by or on behalf of public authorities to obtain funds to be used for various
public facilities, for refunding outstanding obligations, for general operating expenses and for lending such funds to other public institutions
and facilities, and (ii) certain private activity and industrial development bonds issued by or on behalf of public authorities to obtain
funds to provide for the construction, equipment, repair or improvement of privately operated facilities.

 

Municipal bonds are debt obligations issued to obtain
funds for various public purposes. Municipal bonds include general obligation bonds, revenue or special obligation bonds, private activity
and industrial development bonds, moral obligation bonds and participation interests in municipal bonds. General obligation bonds are
backed by the taxing power of the issuing municipality. Revenue or special obligation bonds are backed by the revenues of a project or
facility, such as tolls from a toll bridge. Private activity or industrial development bonds are issued by or on behalf of public authorities
to raise money to finance various privately-owned or -operated facilities for business and manufacturing, housing, sports and pollution
control. These bonds are also used to finance public facilities such as airports, mass transit systems, ports, parking or sewage or solid
waste disposal facilities and certain other facilities. The payment of the principal and interest on such bonds is dependent solely on
the ability of the facility’s user to meet its financial obligations and the pledge, if any, of real and personal property financed
as security for such payment. Moral obligation bonds are normally issued by special purpose authorities. Moral obligation bonds are not
backed by the full faith and credit of the issuing municipality, but are generally backed by the agreement of the issuing authority to
request appropriations from the municipality’s legislative body. Certificates of participation represent an interest in an underlying
obligation or commitment, such as an obligation issued in connection with a leasing arrangement.

 

Municipal notes consist of general obligation notes,
tax anticipation notes (notes sold to finance working capital needs of the issuer in anticipation of receiving taxes on a future date),
revenue anticipation notes (notes sold to provide needed cash prior to receipt of expected non-tax revenues from a specific source), bond
anticipation notes, tax and revenue anticipation notes, certificates of indebtedness, demand notes and construction loan notes. The maturities
of the instruments at the time of issue will generally range from three months to one year.

 

Commercial Paper

 

Commercial paper is the term used to designate unsecured
short-term promissory notes issued by corporations and other entities. Maturities on these issues vary from a few to 270 days.

 

Obligations of Domestic Banks, Foreign Banks
and Foreign Branches of U.S. Banks

 

The Funds may invest in obligations issued by banks
and other savings institutions. Investments in bank obligations include obligations of domestic branches of foreign banks and foreign
branches of domestic banks. Such investments in domestic branches of foreign banks and foreign branches of domestic banks may involve
risks that are different from investments in securities of domestic branches of U.S. banks. These risks may include future unfavorable
political and economic developments, possible withholding taxes on interest income, seizure or nationalization of foreign deposits, currency
controls, interest limitations, or other governmental restrictions which might affect the payment of principal or interest on the securities
held by the Funds. Additionally, these institutions may be subject to less stringent reserve requirements and to different accounting,
auditing, reporting and recordkeeping requirements than those applicable to domestic branches of U.S. banks. Bank obligations include
the following:

 

Time Deposits. Time deposits are non-negotiable receipts issued by a bank in exchange for the deposit
of funds. Like a certificate of deposit, it earns a specified rate of interest over a definite period of time; however, it cannot be traded
in the secondary market. Time deposits with a withdrawal penalty or that mature in more than seven days are considered to be illiquid
investments.

 

Unsecured Bank Promissory Notes. Promissory notes are generally debt obligations of the issuing
entity and are subject to the risks of investing in the banking industry.

 

Investment Grade Fixed Income Securities

 

Fixed income securities are considered investment
grade if they are rated in one of the four highest rating categories by an NRSRO, or, if not rated, are determined to be of comparable
quality by the Adviser and the Sub-Adviser. See “Appendix A – Description of Ratings” for a description of the bond
rating categories of several NRSROs. Ratings of each NRSRO represent its opinion of the safety of principal and interest payments (and
not the market risk) of bonds and other fixed income securities it undertakes to rate at the time of issuance. Ratings are not absolute
standards of quality and may not reflect changes in an issuer’s creditworthiness. Fixed income securities rated BBB- or Baa3 lack
outstanding investment characteristics, and have speculative characteristics as well. Securities rated Baa3 by Moody’s or BBB- by
S&P or higher are considered by those rating agencies to be “investment grade” securities, although Moody’s considers
securities rated in the Baa category to have speculative characteristics. While issuers of bonds rated BBB by S&P are considered to
have adequate capacity to meet their financial commitments, adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity to pay interest and principal for debt in this category than debt in higher rated categories. In the event a security
owned by a Fund is downgraded below investment grade, the Adviser and the Sub-Adviser will review the situation and take appropriate action
with regard to the security, including the actions discussed below.

 

Debt Securities

 

Corporations and governments use debt securities to
borrow money from investors. Most debt securities promise a variable or fixed rate of return and repayment of the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current interest and are purchased at a discount from their face value.

 

Corporate Bonds. Corporations issue bonds and
notes to raise money for working capital or for capital expenditures such as plant construction, equipment purchases and expansion. In
return for the money loaned to the corporation by investors, the corporation promises to pay investors interest, and repay the principal
amount of the bond or note.

 

Mortgage-Backed Securities. Mortgage-backed
securities are interests in pools of mortgage loans that various governmental, government-related and private organizations assemble as
securities for sale to investors. Unlike most debt securities, which pay interest periodically and repay principal at maturity or on specified
call dates, mortgage-backed securities make monthly payments that consist of both interest and principal payments. In effect, these payments
are a “pass-through” of the monthly payments made by the individual borrowers on their mortgage loans, net of any fees paid
to the issuer or guarantor of such securities. Since homeowners usually have the option of paying either part or all of the loan balance
before maturity, the effective maturity of a mortgage-backed security is often shorter than is stated.

 

Governmental entities, private insurers and mortgage
poolers may insure or guarantee the timely payment of interest and principal of these pools through various forms of insurance or guarantees,
including individual loan, title, pool and hazard insurance and letters of credit. The Adviser and the Sub-Adviser will consider such
insurance and guarantees and the creditworthiness of the issuers thereof in determining whether a mortgage-related security meets its
investment quality standards. It is possible that the private insurers or guarantors will not meet their obligations under the insurance
policies or guarantee arrangements.

 

Although the market for such securities is becoming
increasingly liquid, securities issued by certain private organizations may not be readily marketable.

 

Risks of Mortgage-Backed Securities. Yield
characteristics of mortgage-backed securities differ from those of traditional debt securities in a variety of ways. The most significant
differences of mortgage-backed securities are: 1) payments of interest and principal are more frequent (usually monthly) and 2) falling
interest rates generally cause individual borrowers to pay off their mortgage earlier than expected, which results in prepayments of principal
on the securities, thus forcing a Fund to reinvest the money at a lower interest rate. In addition to risks associated with changes in
interest rates, a variety of economic, geographic, social and other factors, such as the sale of the underlying property, refinancing
or foreclosure, can cause investors to repay the loans underlying a mortgage-backed security sooner than expected. When prepayment occurs,
a Fund may have to reinvest its principal at a rate of interest that is lower than the rate on existing mortgage-backed securities.

 

Commercial Banks, Savings and Loan Institutions,
Private Mortgage Insurance Companies, Mortgage Bankers and other Secondary Market Issuers.
Commercial banks, savings and loan institutions,
private mortgage insurance companies, mortgage bankers and other secondary market issuers also create pass-through pools of conventional
mortgage loans. In addition to guaranteeing the mortgage-related security, such issuers may service and/or have originated the underlying
mortgage loans. Pools created by these issuers generally offer a higher rate of interest than pools created by Ginnie Mae, Fannie Mae
and Freddie Mac because they are not guaranteed by a government agency.

 

Other Asset-Backed Securities. These securities
are interests in pools of a broad range of assets other than mortgages, such as automobile loans, computer leases and credit card receivables.
Like mortgage-backed securities, these securities are pass-through. In general, the collateral supporting these securities is of shorter
maturity than mortgage loans and is less likely to experience substantial prepayments with interest rate fluctuations, but may still be
subject to prepayment risk.

 

Asset-backed securities present certain risks that
are not presented by mortgage-backed securities. Primarily, these securities may not have the benefit of any security interest in the
related assets, which raises the possibility that recoveries on repossessed collateral may not be available to support payments on these
securities. For example, credit card receivables are generally unsecured and the debtors are entitled to the protection of a number of
state and federal consumer credit laws, many of which allow debtors to reduce their balances by offsetting certain amounts owed on the
credit cards. Most issuers of asset-backed securities backed by automobile receivables permit the servicers of such receivables to retain
possession of the underlying obligations. If the servicer were to sell these obligations to another party, there is a risk that the purchaser
would acquire an interest superior to that of the holders of the related asset-backed securities. Due to the quantity of vehicles involved
and requirements under state laws, asset-backed securities backed by automobile receivables may not have a proper security interest in
all of the obligations backing such receivables.

 

To lessen the effect of failures by obligors on underlying
assets to make payments, the entity administering the pool of assets may agree to ensure that the receipt of payments on the underlying
pool occurs in a timely fashion (“liquidity protection”). In addition, asset-backed securities may obtain insurance, such
as guarantees, policies or letters of credit obtained by the issuer or sponsor from third parties, for some or all of the assets in the
pool (“credit support”). Delinquency or loss more than that anticipated or failure of the credit support could adversely affect
the return on an investment in such a security.

 

The Funds may also invest in residual interests in
asset-backed securities, which consist of the excess cash flow remaining after making required payments on the securities and paying related
administrative expenses. The amount of residual cash flow resulting from a particular issue of asset-backed securities depends in part
on the characteristics of the underlying assets, the coupon rates on the securities, prevailing interest rates, the amount of administrative
expenses and the actual prepayment experience on the underlying assets.

 

Bank Loans. Bank loans typically are arranged
through private negotiations between a borrower and several financial institutions or a group of lenders which are represented by one
or more lenders acting as agent. The agent is often a commercial bank that originates the loan and invites other parties to join the lending
syndicate. The agent will be primarily responsible for negotiating the loan agreement and will have responsibility for the documentation
and ongoing administration of the loan on behalf of the lenders after completion of the loan transaction. The Funds can invest in a bank
loan either as a direct lender or through an assignment or participation.

 

When a Fund acts as a direct lender, it will have
a direct contractual relationship with the borrower and may participate in structuring the loan, may enforce compliance by the borrower
with the terms of the loan agreement and may have voting, consent and set-off rights under the loan agreement.

 

Loan assignments are investments in all or a portion
of certain bank loans purchased from the lenders or from other third parties. The purchaser of an assignment typically will acquire direct
rights against the borrower under the loan. While the purchaser of an assignment typically succeeds to all the rights and obligations
of the assigning lender under the loan agreement, because assignments are arranged through private negotiations between potential assignees
and assignors, or other third parties whose interests are being assigned, the rights and obligations acquired by a Fund may differ from
and be more limited than those held by the assigning lender.

 

A holder of a loan participation typically has only
a contractual right with the seller of the participation and not with the borrower or any other entities interpositioned between the seller
of the participation and the borrower. As such, the purchaser of a loan participation assumes the credit risk of the seller of the participation,
and any intermediary entities between the seller and the borrower, in addition to the credit risk of the borrower. When a Fund holds a
loan participation, it will have the right to receive payments of principal, interest and fees to which it may be entitled only from the
seller of the participation and only upon receipt of the seller of such payments from the borrower or from any intermediary parties between
the seller and the borrower. Additionally, the Fund generally will have no right to enforce compliance by the borrower with the terms
of the loan agreement, will have no voting, consent or set-off rights under the loan agreement and may not directly benefit from the collateral
supporting the loan although lenders that sell participations generally are required to distribute liquidation proceeds received by them
pro rata among the holders of such participations. In the event of the bankruptcy or insolvency of the borrower, a loan participation
may be subject to certain defenses that can be asserted by the borrower as a result of improper conduct by the seller or intermediary.
If the borrower fails to pay principal and interest when due, the Fund may be subject to greater delays, expenses and risks than those
that would have been involved if the Fund had purchased a direct obligation of such borrower.

 

Direct loans, assignments and loan participations
may be considered liquid, as determined by the Adviser and the Sub-Adviser based on criteria approved by the Board.

 

The Funds may have difficulty disposing of bank loans
because, in certain cases, the market for such instruments is not highly liquid. The lack of a highly liquid secondary market may have
an adverse impact on the value of such instruments and on a Fund’s ability to dispose of the bank loan in response to a specific
economic event, such as deterioration in the creditworthiness of the borrower. Furthermore, transactions in many loans settle on a delayed
basis, and a Fund may not receive the proceeds from the sale of a loan for a substantial period of time after the sale. As a result, those
proceeds will not be available to make additional investments or to meet the Fund’s redemption obligations. To the extent that extended
settlement creates short-term liquidity needs, a Fund may satisfy these needs by holding additional cash or selling other investments
(potentially at an inopportune time, which could result in losses to the Fund).

 

Bank loans may not be considered “securities,”
and purchasers, such as the Funds, therefore may not be entitled to rely on the anti-fraud protections of the federal securities laws.

 

The investment managers may from time to time have
the opportunity to receive material, non-public information (“Confidential Information”) about the borrower, including financial
information and related documentation regarding the borrower that is not publicly available. Pursuant to applicable policies and procedures,
the investment managers may (but are not required to) seek to avoid receipt of Confidential Information from the borrower so as to avoid
possible restrictions on its ability to purchase and sell investments on behalf of a Fund and other clients to which such Confidential
Information relates (e.g., publicly traded securities issued by the borrower). In such circumstances, the Fund (and other clients of the
investment managers) may be disadvantaged in comparison to other investors, including with respect to the price the Fund pays or receives
when it buys or sells a bank loan. Further, the investment managers’ abilities to assess the desirability of proposed consents,
waivers or amendments with respect to certain bank loans may be compromised if it is not privy to available Confidential Information.
The investment managers may also determine to receive such Confidential Information in certain circumstances under its applicable policies
and procedures. If the investment managers intentionally or unintentionally come into possession of Confidential Information, they may
be unable, potentially for a substantial period of time, to purchase or sell publicly traded securities to which such Confidential Information
relates.

 

Repurchase Agreements

 

The Funds may enter into repurchase agreements with
financial institutions. A repurchase agreement is an agreement under which a Fund acquires a fixed income security (generally a security
issued by the U.S. government or an agency thereof, a banker’s acceptance, or a certificate of deposit) from a commercial bank,
broker, or dealer, and simultaneously agrees to resell such security to the seller at an agreed upon price and date (normally, the next
business day). Because the security purchased constitutes collateral for the repurchase obligation, a repurchase agreement may be considered
a loan that is collateralized by the security purchased. The acquisition of a repurchase agreement may be deemed to be an acquisition
of the underlying securities as long as the obligation of the seller to repurchase the securities is collateralized fully. The Funds follow
certain procedures designed to minimize the risks inherent in such agreements. These procedures include effecting repurchase transactions
only with creditworthy financial institutions whose condition will be continually monitored by the investment managers. The repurchase
agreements entered into by the Funds will provide that the underlying collateral at all times shall have a value at least equal to 102%
of the resale price stated in the agreement and consist only of securities permissible under Section 101(47)(A)(i) of the Bankruptcy Code
(the investment managers monitor compliance with this requirement). Under all repurchase agreements entered into by the Funds, the custodian
or its agent must take possession of the underlying collateral. In the event of a default or bankruptcy by a selling financial institution,
a Fund will seek to liquidate such collateral. However, the exercising of a Fund’s right to liquidate such collateral could involve
certain costs or delays and, to the extent that proceeds from any sale upon a default of the obligation to repurchase were less than the
repurchase price, the Fund could suffer a loss. The Funds may also enter into “tri-party” repurchase agreements. In “tri-party”
repurchase agreements, an unaffiliated third party custodian maintains accounts to hold collateral for a Fund and its counterparties and,
therefore, the Fund may be subject to the credit risk of those custodians. The investments of the Funds in repurchase agreements, at times,
may be substantial when, in the view of the investment managers, liquidity or other considerations so warrant.

 

Reverse Repurchase Agreements

 

Reverse repurchase agreements are transactions in
which the Funds sell portfolio securities to financial institutions, such as banks and broker-dealers, and agree to repurchase them at
a mutually agreed-upon date and price that is higher than the original sale price. Reverse repurchase agreements are similar to a fully
collateralized borrowing by the Funds. At the time a Fund enters into a reverse repurchase agreement, it will earmark on the books of
the Fund or place in a segregated account cash or liquid securities having a value equal to the repurchase price (including accrued interest)
and will subsequently monitor the account to ensure that such equivalent value is maintained.

 

Reverse repurchase agreements involve risks. Reverse
repurchase agreements are a form of leverage, and the use of reverse repurchase agreements by a Fund may increase the Fund’s volatility.
Reverse repurchase agreements are also subject to the risk that the other party to the reverse repurchase agreement will be unable or
unwilling to complete the transaction as scheduled, which may result in losses to a Fund. Reverse repurchase agreements also involve the
risk that the market value of the securities sold by a Fund may decline below the price at which it is obligated to repurchase the securities.
In addition, when a Fund invests the proceeds it receives in a reverse repurchase transaction, there is a risk that those investments
may decline in value. In this circumstance, the Fund could be required to sell other investments in order to meet its obligations to repurchase
the securities.

 

Securities of Other Investment Companies

 

The Funds may invest in shares of other investment
companies, to the extent permitted by applicable law and any applicable exemptive relief, subject to certain restrictions. These investment
companies typically incur fees that are separate from those fees incurred directly by a Fund. A Fund’s purchase of such investment
company securities results in the layering of expenses, such that shareholders would indirectly bear a proportionate share of the operating
expenses of such investment companies, including advisory fees, in addition to paying the Fund’s expenses. Unless an exception is
available, Section 12(d)(1)(A) of the 1940 Act prohibits a fund from (i) acquiring more than 3% of the voting shares of any one investment
company, (ii) investing more than 5% of its total assets in any one investment company, and (iii) investing more than 10% of its total
assets in all investment companies combined, including its ETF investments.

 

For hedging or other purposes, a Fund may invest in
investment companies that seek to track the composition and/or performance of specific indexes or portions of specific indexes. Certain
of these investment companies, known as ETFs, are traded on a securities exchange. (See “Exchange-Traded Funds” above). The
market prices of index-based investments will fluctuate in accordance with changes in the underlying portfolio securities of the investment
company and also due to supply and demand of the investment company’s shares on the exchange upon which the shares are traded. Index-based
investments may not replicate or otherwise match the composition or performance of their specified index due to transaction costs, among
other things.

 

Pursuant to orders issued by the U.S. Securities and
Exchange Commission (the “SEC”) to certain ETFs and procedures approved by the Board, a Fund may invest in such ETFs in excess
of the 3% limitation prescribed by Section 12(d)(1)(A) described above, provided that the Fund otherwise complies with the conditions
of the applicable SEC order, as it may be amended, and any other applicable investment limitations. Neither such ETFs nor their investment
advisers make any representations regarding the advisability of investing in the ETFs.

 

The Funds may invest in investment companies that
are not registered with the SEC or in privately placed securities of investment companies (which may or may not be registered), such as
hedge funds and offshore funds. Unregistered funds are largely exempt from the regulatory requirements that apply to registered investment
companies. As a result, unregistered funds may have a greater ability to make investments, or use investment techniques, that offer a
higher potential investment return (for example, leveraging), but which may carry high risk. Unregistered funds, while not regulated by
the SEC like registered funds, may be indirectly supervised by the financial institutions (e.g., commercial and investment banks) that
may provide them with loans or other sources of capital. Investments in unregistered funds may be difficult to sell, which could cause
a Fund to lose money when selling an interest in an unregistered fund. For example, many hedge funds require their investors to hold their
investments for at least one year.

 

Derivatives

 

Derivatives are financial instruments whose value
is based on an underlying asset (such as a stock or a bond), an underlying economic factor (such as an interest rate) or a market benchmark.
Unless otherwise stated in the Prospectus, the Funds may use derivatives for a number of purposes including managing risk, gaining exposure
to various markets in a cost-efficient manner, reducing transaction costs, remaining fully invested and speculating. Each Fund may also
invest in derivatives with the goal of protecting itself from broad fluctuations in market prices, interest rates or foreign currency
exchange rates (a practice known as “hedging”). When hedging is successful, a Fund will have offset any depreciation in the
value of its portfolio securities by the appreciation in the value of the derivative position. Although techniques other than the sale
and purchase of derivatives could be used to control the exposure of the Funds to market fluctuations, the use of derivatives may be a
more effective means of hedging this exposure. In the future, to the extent such use is consistent with a Fund’s investment objective
and is legally permissible, the Fund may use instruments and techniques that are not presently contemplated, but that may be subsequently
developed.

 

There can be no assurance that a derivative strategy,
if employed, will be successful. Because many derivatives have a leverage or borrowing component, adverse changes in the value or level
of the underlying asset, reference rate or index can result in a loss substantially greater than the amount invested in the derivative
itself. Certain derivatives have the potential for unlimited loss, regardless of the size of the initial investment. Accordingly, certain
derivative transactions may be considered to constitute borrowing transactions for purposes of the 1940 Act. Such a derivative transaction
will not be considered to constitute the issuance of a “senior security” by a Fund, and therefore such transaction will not
be subject to the 300% asset coverage requirement otherwise applicable to borrowings by the Fund, if the Fund covers the transaction or
segregates sufficient liquid assets (or such assets are “earmarked” on the Fund’s books) in accordance with the requirements
and interpretations of the SEC and its staff. Futures contracts, forward contracts and other applicable securities and instruments that
settle physically, and written options on such contracts, will be treated as cash settled for asset segregation purposes when a Fund has
entered into a contractual arrangement with a third party futures commission merchant or other counterparty to off-set the Fund’s
exposure under the contract and, failing that, to assign its delivery obligation under the contract to the counterparty.

 

Pursuant to rules adopted under the Commodity Exchange
Act (“CEA”) by the Commodity Futures Trading Commission (“CFTC”), a Fund must either operate within certain guidelines
and restrictions with respect to the Fund’s use of futures, options on such futures, commodity options and certain swaps, or the
Adviser will be subject to registration with the CFTC as a “commodity pool operator” (“CPO”).

 

[Consistent with the CFTC’s regulations, the
Adviser, on behalf of the Funds, has filed a notice of exclusion from the definition of the term CPO under the CEA pursuant to CFTC Rule
4.5 with respect to the Funds’ operations. Therefore, the Funds are not subject to regulation as commodity pools under the CEA and
the Adviser is not subject to registration or regulation as a CPO under the CEA with respect to the Funds. As a result, the Funds will
be limited in their ability to use futures, options on such futures, commodity options and certain swaps. Complying with the limitations
may restrict the investment managers’ ability to implement the Funds’ investment strategies and may adversely affect the Funds’
performance.]

 

Types of Derivatives:

 

Futures. A futures contract is an agreement
between two parties whereby one party agrees to sell and the other party agrees to buy a specified amount of a financial instrument at
an agreed upon price and time. The financial instrument underlying the contract may be a stock, stock index, bond, bond index, interest
rate, foreign exchange rate or other similar instrument. Agreeing to buy the underlying financial instrument is called buying a futures
contract or taking a long position in the contract. Likewise, agreeing to sell the underlying financial instrument is called selling a
futures contract or taking a short position in the contract.

 

Futures contracts are traded in the United States
on commodity exchanges or boards of trade (known as “contract markets”) approved for such trading and regulated by the CFTC.
These contract markets standardize the terms, including the maturity date and underlying financial instrument, of all futures contracts.

 

Unlike other securities, the parties to a futures
contract do not have to pay for or deliver the underlying financial instrument until some future date (the “delivery date”).
Contract markets require both the purchaser and seller to deposit “initial margin” with a futures broker, known as a futures
commission merchant or custodian bank, when they enter into the contract. Initial margin deposits are typically equal to a percentage
of the contract’s value. Initial margin is similar to a performance bond or good faith deposit on a contract and is returned to
the depositing party upon termination of the futures contract if all contractual obligations have been satisfied. After they open a futures
contract, the parties to the transaction must compare the purchase price of the contract to its daily market value. If the value of the
futures contract changes in such a way that a party’s position declines, that party must make additional “variation margin”
payments so that the margin payment is adequate. On the other hand, the value of the contract may change in such a way that there is excess
margin on deposit, possibly entitling the party that has a gain to receive all or a portion of this amount. This process is known as “marking
to the market.” Variation margin does not represent a borrowing or loan by a party but is instead a settlement between the party
and the futures broker of the amount one party would owe the other if the futures contract terminated. In computing daily net asset value,
each party marks to market its open futures positions.

 

Although the terms of a futures contract call for
the actual delivery of and payment for the underlying security, in many cases the parties may close the contract early by taking an opposite
position in an identical contract. If the sale price upon closing out the contract is less than the original purchase price, the party
closing out the contract will realize a loss. If the sale price upon closing out the contract is more than the original purchase price,
the party closing out the contract will realize a gain. Conversely, if the purchase price upon closing out the contract is more than the
original sale price, the party closing out the contract will realize a loss. If the purchase price upon closing out the contract is less
than the original sale price, the party closing out the contract will realize a gain.

 

A Fund may incur commission expenses when it opens
or closes a futures position.

 

Options. An option is a contract between two
parties for the purchase and sale of a financial instrument for a specified price (known as the “strike price” or “exercise
price”) at any time during the option period. Unlike a futures contract, an option grants a right (not an obligation) to buy or
sell a financial instrument. Generally, a seller of an option can grant a buyer two kinds of rights: a “call” (the right to
buy the security) or a “put” (the right to sell the security). Options have various types of underlying instruments, including
specific securities, indices of securities prices, foreign currencies, interest rates and futures contracts. Options may be traded on
an exchange (exchange-traded options) or may be customized agreements between the parties (over-the-counter or “OTC” options).
Like futures, a financial intermediary, known as a clearing corporation, financially backs exchange-traded options. However, OTC options
have no such intermediary and are subject to the risk that the counterparty will not fulfill its obligations under the contract. The principal
factors affecting the market value of an option include supply and demand, interest rates, the current market value of the underlying
instrument relative to the exercise price of the option, the volatility of the underlying instrument, and the time remaining until the
option expires.

 

Purchasing Put and Call Options

 

When a Fund purchases a put option, it buys the right
to sell the instrument underlying the option at a fixed strike price. In return for this right, the Fund pays the current market price
for the option (known as the “option premium”). A Fund may purchase put options to offset or hedge against a decline in the
market value of its securities (“protective puts”) or to benefit from a decline in the price of securities that it does not
own. A Fund would ordinarily realize a gain if, during the option period, the value of the underlying securities decreased below the exercise
price sufficiently to cover the premium and transaction costs. However, if the price of the underlying instrument does not fall enough
to offset the cost of purchasing the option, a put buyer would lose the premium and related transaction costs.

 

Call options are similar to put options, except that
a Fund obtains the right to purchase, rather than sell, the underlying instrument at the option’s strike price. A Fund would normally
purchase call options in anticipation of an increase in the market value of securities it owns or wants to buy. A Fund would ordinarily
realize a gain if, during the option period, the value of the underlying instrument exceeded the exercise price plus the premium paid
and related transaction costs. Otherwise, the Fund would realize either no gain or a loss on the purchase of the call option.

 

The purchaser of an option may terminate its position
by:

 

Allowing it to expire and losing its entire premium;

 

Exercising the option and either selling (in the case of a put option) or
buying (in the case of a call option) the underlying instrument at the strike price; or

 

Closing it out in the secondary market at its current price.

 

Selling (Writing) Put and Call Options

 

When a Fund writes a call option it assumes an obligation
to sell specified securities to the holder of the option at a fixed strike price if the option is exercised at any time before the expiration
date. Similarly, when a Fund writes a put option it assumes an obligation to purchase specified securities from the option holder at a
fixed strike price if the option is exercised at any time before the expiration date. The Fund may terminate its position in an exchange-traded
put option before exercise by buying an option identical to the one it has written. Similarly, the Fund may cancel an OTC option by entering
into an offsetting transaction with the counterparty to the option.

 

A Fund could try to hedge against an increase in the
value of securities it would like to acquire by writing a put option on those securities. If security prices rise, the Fund would expect
the put option to expire and the premium it received to offset the increase in the security’s value. If security prices remain the
same over time, the Fund would hope to profit by closing out the put option at a lower price. If security prices fall, the Fund may lose
an amount of money equal to the difference between the value of the security and the premium it received. Writing covered put options
may deprive a Fund of the opportunity to profit from a decrease in the market price of the securities it would like to acquire.

 

The characteristics of writing call options are similar
to those of writing put options, except that call writers expect to profit if prices remain the same or fall. A Fund could try to hedge
against a decline in the value of securities it already owns by writing a call option. If the price of that security falls as expected,
the Fund would expect the option to expire and the premium it received to offset the decline of the security’s value. However, the
Fund must be prepared to deliver the underlying instrument in return for the strike price, which may deprive it of the opportunity to
profit from an increase in the market price of the securities it holds.

 

The Funds are permitted to write only “covered”
options. At the time of selling a call option, a Fund may cover the option by owning, among other things:

 

The underlying security (or securities convertible into the underlying security
without additional consideration), index, interest rate, foreign currency or futures contract;

 

A call option on the same security or index with the same or lesser exercise
price;

 

A call option on the same security or index with a greater exercise price,
provided that the Fund also segregates cash or liquid securities in an amount equal to the difference between the exercise prices;

 

Cash or liquid securities equal to at least the market value of the optioned
securities, interest rate, foreign currency or futures contract; or

 

In the case of an index, the portfolio of securities that corresponds to
the index.

 

At the time of selling a put option, a Fund may cover
the option by, among other things:

 

Entering into a short position in the underlying security;

 

Purchasing a put option on the same security, index, interest rate, foreign
currency or futures contract with the same or greater exercise price;

 

Purchasing a put option on the same security, index, interest rate, foreign
currency or futures contract with a lesser exercise price and segregating cash or liquid securities in an amount equal to the difference
between the exercise prices; or

 

Maintaining the entire exercise price in liquid securities.

 

Options on Securities Indices

 

Options on securities indices are similar to options
on securities, except that the exercise of securities index options requires cash settlement payments and does not involve the actual
purchase or sale of securities. In addition, securities index options are designed to reflect price fluctuations in a group of securities
or segment of the securities market rather than price fluctuations in a single security.

 

Options on Credit Default Swaps

 

An option on a credit default swap gives the holder
the right to enter into a credit default swap at a specified future date and under specified terms in exchange for a purchase price or
premium. The writer of the option bears the risk of any unfavorable move in the value of the credit default swap relative to the market
value on the exercise date, while the purchaser may allow the option to expire unexercised.

 

 

An option on a futures contract provides the holder
with the right to buy a futures contract (in the case of a call option) or sell a futures contract (in the case of a put option) at a
fixed time and price. Upon exercise of the option by the holder, the contract market clearing house establishes a corresponding short
position for the writer of the option (in the case of a call option) or a corresponding long position (in the case of a put option). If
the option is exercised, the parties will be subject to the futures contracts. In addition, the writer of an option on a futures contract
is subject to initial and variation margin requirements on the option position. Options on futures contracts are traded on the same contract
market as the underlying futures contract.

 

The buyer or seller of an option on a futures contract
may terminate the option early by purchasing or selling an option of the same series (i.e., the same exercise price and expiration date)
as the option previously purchased or sold. The difference between the premiums paid and received represents the trader’s profit
or loss on the transaction.

 

A Fund may purchase put and call options on futures
contracts instead of selling or buying futures contracts. The Fund may buy a put option on a futures contract for the same reasons it
would sell a futures contract. It also may purchase such a put option in order to hedge a long position in the underlying futures contract.
A Fund may buy a call option on a futures contract for the same purpose as the actual purchase of a futures contract, such as in anticipation
of favorable market conditions.

 

A Fund may write a call option on a futures contract
to hedge against a decline in the prices of the instrument underlying the futures contracts. If the price of the futures contract at expiration
were below the exercise price, the Fund would retain the option premium, which would offset, in part, any decline in the value of its
portfolio securities.

 

The writing of a put option on a futures contract
is similar to the purchase of the futures contracts, except that, if the market price declines, a Fund would pay more than the market
price for the underlying instrument. The premium received on the sale of the put option, less any transaction costs, would reduce the
net cost to the Fund.

 

Options on Foreign Currencies

 

A put option on a foreign currency gives the purchaser
of the option the right to sell a foreign currency at the exercise price until the option expires. A call option on a foreign currency
gives the purchaser of the option the right to purchase the currency at the exercise price until the option expires. The Funds may purchase
or write put and call options on foreign currencies for the purpose of hedging against changes in future currency exchange rates.

 

The Funds may use foreign currency options given the
same circumstances under which they could use forward foreign currency exchange contracts. For example, a decline in the U.S. dollar value
of a foreign currency in which a Fund’s securities are denominated would reduce the U.S. dollar value of the securities, even if
their value in the foreign currency remained constant. In order to hedge against such a risk, the Fund may purchase a put option on the
foreign currency. If the value of the currency then declined, the Fund could sell the currency for a fixed amount in U.S. dollars and
thereby offset, at least partially, the negative effect on its securities that otherwise would have resulted. Conversely, if a Fund anticipates
a rise in the U.S. dollar value of a currency in which securities to be acquired are denominated, the Fund may purchase call options on
the currency in order to offset, at least partially, the effects of negative movements in exchange rates. If currency exchange rates do
not move in the direction or to the extent anticipated, the Funds could sustain losses on transactions in foreign currency options.

 

 

The Funds may purchase and write options in combination
with each other, or in combination with futures or forward contracts or swap agreements, to adjust the risk and return characteristics
of the overall position. For example, a Fund could construct a combined position whose risk and return characteristics are similar to
selling a futures contract by purchasing a put option and writing a call option on the same underlying instrument. Alternatively, a Fund
could write a call option at one strike price and buy a call option at a lower price to reduce the risk of the written call option in
the event of a substantial price increase. Because combined options positions involve multiple trades, they result in higher transaction
costs and may be more difficult to open and close out.

 

Forward Foreign Currency Exchange Contracts. A
forward foreign currency contract involves an obligation to purchase or sell a specific amount of currency at a future date or date range
at a specific price. In the case of a cancelable forward contract, the holder has the unilateral right to cancel the contract at maturity
by paying a specified fee. Forward foreign currency exchange contracts differ from foreign currency futures contracts in certain respects.
Unlike futures contracts, forward contracts:

 

Do not have standard maturity dates or amounts (i.e., the parties to the
contract may fix the maturity date and the amount);

 

Are typically traded directly between currency traders (usually large commercial
banks) and their customers in the inter-bank markets, as opposed to on exchanges regulated by the CFTC (note, however, that under new
definitions adopted by the CFTC and SEC, many non-deliverable foreign currency forwards will be considered swaps for certain purposes,
including determination of whether such instruments must be traded on exchanges and centrally cleared);

 

Do not require an initial margin deposit; and

 

May be closed by entering into a closing transaction with the currency trader
who is a party to the original forward contract, as opposed to with a commodities exchange.

 

Foreign Currency Hedging Strategies

 

A “settlement hedge” or “transaction
hedge” is designed to protect a Fund against an adverse change in foreign currency values between the date a security is purchased
or sold and the date on which payment is made or received. Entering into a forward contract for the purchase or sale of the amount of
foreign currency involved in an underlying security transaction for a fixed amount of U.S. dollars “locks in” the U.S. dollar
price of the security. A Fund may also use forward contracts to purchase or sell a foreign currency when it anticipates purchasing or
selling securities denominated in foreign currency, even if it has not yet selected the specific investments.

 

A Fund may use forward contracts to hedge against
a decline in the value of existing investments denominated in foreign currency. Such a hedge, sometimes referred to as a “position
hedge,” would tend to offset both positive and negative currency fluctuations, but would not offset changes in security values caused
by other factors. The Fund could also hedge the position by selling another currency expected to perform similarly to the currency in
which the Fund’s investment is denominated. This type of hedge, sometimes referred to as a “proxy hedge,” could offer
advantages in terms of cost, yield, or efficiency, but generally would not hedge currency exposure as effectively as a direct hedge into
U.S. dollars. Proxy hedges may result in losses if the currency used to hedge does not perform similarly to the currency in which the
hedged securities are denominated.

 

Transaction and position hedging do not eliminate
fluctuations in the underlying prices of the securities that a Fund owns or intends to purchase or sell. They simply establish a rate
of exchange that one can achieve at some future point in time. Additionally, these techniques tend to minimize the risk of loss due to
a decline in the value of the hedged currency and to limit any potential gain that might result from the increase in value of such currency.

 

A Fund may enter into forward contracts to shift its
investment exposure from one currency into another. Such transactions may call for the delivery of one foreign currency in exchange for
another foreign currency, including currencies in which its securities are not then denominated. This may include shifting exposure from
U.S. dollars to a foreign currency, or from one foreign currency to another foreign currency. This type of strategy, sometimes known as
a “cross-hedge,” will tend to reduce or eliminate exposure to the currency that is sold, and increase exposure to the currency
that is purchased. Cross-hedges may protect against losses resulting from a decline in the hedged currency but will cause the Fund to
assume the risk of fluctuations in the value of the currency it purchases. Cross-hedging transactions also involve the risk of imperfect
correlation between changes in the values of the currencies involved.

 

It is difficult to forecast with precision the market
value of portfolio securities at the expiration or maturity of a forward or futures contract. Accordingly, a Fund may have to purchase
additional foreign currency on the spot (cash) market if the market value of a security it is hedging is less than the amount of foreign
currency it is obligated to deliver. Conversely, the Fund may have to sell on the spot market some of the foreign currency it received
upon the sale of a security if the market value of such security exceeds the amount of foreign currency it is obligated to deliver.

 

Participation Notes (“P-Notes”).
P-Notes are participation interest notes that are issued by banks or broker-dealers and are designed to offer a return linked to a particular
underlying equity, debt, currency or market. When purchasing a P-Note, the posting of margin is not required because the full cost of
the P-Note (plus commission) is paid at the time of purchase. When the P-Note matures, the issuer will pay to, or receive from, the purchaser
the difference between the nominal value of the underlying instrument at the time of purchase and that instrument’s value at maturity.
Investments in P-Notes involve the same risks associated with a direct investment in the underlying foreign companies or foreign securities
markets that they seek to replicate.

 

In addition, there can be no assurance that the trading
price of P-Notes will equal the underlying value of the foreign companies or foreign securities markets that they seek to replicate. The
holder of a P-Note that is linked to a particular underlying security is entitled to receive any dividends paid in connection with an
underlying security or instrument. However, the holder of a P-Note does not receive voting rights as it would if it directly owned the
underlying security or instrument. P-Notes are generally traded over-the-counter. P-Notes constitute general unsecured contractual obligations
of the banks or broker-dealers that issue them. There is also counterparty risk associated with these investments because the Funds are
relying on the creditworthiness of such counterparty and have no rights under a P-Note against the issuer of the underlying security.
In addition, the Funds will incur transaction costs as a result of investments in P-Notes.

 

Swap Agreements. A swap agreement is a financial
instrument that typically involves the exchange of cash flows between two parties on specified dates (settlement dates), where the cash
flows are based on agreed-upon prices, rates, indices, etc. The nominal amount on which the cash flows are calculated is called the notional
amount. Swap agreements are individually negotiated and structured to include exposure to a variety of different types of investments
or market factors, such as interest rates, foreign currency rates, mortgage securities, corporate borrowing rates, security prices or
inflation rates.

 

Swap agreements may increase or decrease the overall
volatility of the investments of a Fund and its share price. The performance of swap agreements may be affected by a change in the specific
interest rate, currency, or other factors that determine the amounts of payments due to and from the Fund. If a swap agreement calls for
payments by the Fund, the Fund must be prepared to make such payments when due. In addition, if the counterparty’s creditworthiness
declined, the value of a swap agreement would be likely to decline, potentially resulting in losses.

 

Generally, swap agreements have a fixed maturity date
that will be agreed upon by the parties. The agreement can be terminated before the maturity date under certain circumstances, such as
default by one of the parties or insolvency, among others, and can be transferred by a party only with the prior written consent of the
other party. A Fund may be able to eliminate its exposure under a swap agreement either by assignment or by other disposition, or by entering
into an offsetting swap agreement with the same party or a similarly creditworthy party. If the counterparty is unable to meet its obligations
under the contract, declares bankruptcy, defaults or becomes insolvent, a Fund may not be able to recover the money it expected to receive
under the swap agreement. The Funds will not enter into any swap agreement unless the Adviser and the Sub-Adviser believe that the counterparty
to the transaction is creditworthy.

 

A swap agreement can be a form of leverage, which
can magnify the Funds’ gains or losses. In order to reduce the risk associated with leveraging, the Funds may cover their current
obligations under swap agreements according to guidelines established by the SEC. If a Fund enters into a swap agreement on a net basis,
it will segregate assets with a daily value at least equal to the excess, if any, of the Fund’s accrued obligations under the swap
agreement over the accrued amount the Fund is entitled to receive under the agreement. If a Fund enters into a swap agreement on other
than a net basis, it will segregate assets with a value equal to the full amount of the Fund’s accrued obligations under the swap
agreement.

 

 

In a typical equity swap, one party agrees to pay
another party the return on a stock, stock index or basket of stocks in return for a specified interest rate. By entering into an equity
index swap, for example, the index receiver can gain exposure to stocks making up the index of securities without actually purchasing
those stocks. Equity index swaps involve not only the risk associated with investment in the securities represented in the index, but
also the risk that the performance of such securities, including dividends, will not exceed the return on the interest rate that a Fund
will be committed to pay.

 

 

Total return swaps are contracts in which one party
agrees to make payments of the total return from a reference instrument—which may be a single asset, a pool of assets or an index
of assets—during a specified period, in return for payments equal to a fixed or floating rate of interest or the total return from
another underlying reference instrument. The total return includes appreciation or depreciation on the underlying asset, plus any interest
or dividend payments. Payments under the swap are based upon an agreed upon principal amount but, since the principal amount is not exchanged,
it represents neither an asset nor a liability to either counterparty, and is referred to as notional. Total return swaps are marked to
market daily using different sources, including quotations from counterparties, pricing services, brokers or market makers. The unrealized
appreciation or depreciation related to the change in the valuation of the notional amount of the swap is combined with the amount due
to a Fund at termination or settlement. The primary risks associated with total return swaps are credit risks (if the counterparty fails
to meet its obligations) and market risk (if there is no liquid market for the swap or unfavorable changes occur to the underlying reference
instrument).

 

 

Interest rate swaps are financial instruments that
involve the exchange of one type of interest rate for another type of interest rate cash flow on specified dates in the future. Some of
the different types of interest rate swaps are “fixed-for-floating rate swaps,” “termed basis swaps” and “index
amortizing swaps.” Fixed-for-floating rate swaps involve the exchange of fixed interest rate cash flows for floating rate cash flows.
Termed basis swaps entail cash flows to both parties based on floating interest rates, where the interest rate indices are different.
Index amortizing swaps are typically fixed-for-floating rate swaps where the notional amount changes if certain conditions are met.

 

As with a traditional investment in a debt security,
a Fund could lose money by investing in an interest rate swap if interest rates change adversely. For example, if a Fund enters into a
swap where it agrees to exchange a floating rate of interest for a fixed rate of interest, the Fund may have to pay more money than it
receives. Similarly, if a Fund enters into a swap where it agrees to exchange a fixed rate of interest for a floating rate of interest,
the Fund may receive less money than it has agreed to pay.

 

 

A currency swap is an agreement between two parties
in which one party agrees to make interest rate payments in one currency and the other promises to make interest rate payments in another
currency. A Fund may enter into a currency swap when it has one currency and desires a different currency. Typically, the interest rates
that determine the currency swap payments are fixed, although occasionally one or both parties may pay a floating rate of interest. Unlike
an interest rate swap, however, the principal amounts are exchanged at the beginning of the agreement and returned at the end of the agreement.
Changes in foreign exchange rates and changes in interest rates, as described above, may negatively affect currency swaps.

 

 

Inflation swaps are fixed-maturity, over-the-counter
derivatives where one party pays a fixed rate in exchange for payments tied to an inflation index, such as the Consumer Price Index. The
fixed rate, which is set by the parties at the initiation of the swap, is often referred to as the “breakeven inflation” rate
and generally represents the current difference between treasury yields and Treasury Inflation Protected Securities yields of similar
maturities at the initiation of the swap agreement. Inflation swaps are typically designated as “zero coupon,” where all cash
flows are exchanged at maturity. The value of an inflation swap is expected to fluctuate in response to changes in the relationship between
nominal interest rates and the rate of inflation. An inflation swap can lose value if the realized rate of inflation over the life of
the swap is less than the fixed market implied inflation rate (the breakeven inflation rate) the investor agreed to pay at the initiation
of the swap.

 

 

A credit default swap is an agreement between a “buyer”
and a “seller” for credit protection. The credit default swap agreement may have as reference obligations one or more securities
that are not then held by a Fund. The protection buyer is generally obligated to pay the protection seller an upfront payment and/or a
periodic stream of payments over the term of the agreement until a credit event on a reference obligation has occurred. If no default
occurs, the seller would keep the stream of payments and would have no payment obligations. If a credit event occurs, the seller generally
must pay the buyer the full notional amount (the “par value”) of the swap.

 

Caps, Collars and Floors

 

Caps and floors have an effect similar to buying or
writing options. In a typical cap or floor agreement, one party agrees to make payments only under specified circumstances, usually in
return for payment of a fee by the other party. For example, the buyer of an interest rate cap obtains the right to receive payments to
the extent that a specified interest rate exceeds an agreed-upon level. The seller of an interest rate floor is obligated to make payments
to the extent that a specified interest rate falls below an agreed-upon level. An interest rate collar combines elements of buying a cap
and selling a floor.

 

Risks of Derivatives:

 

While transactions in derivatives may reduce certain
risks, these transactions themselves entail certain other risks. For example, unanticipated changes in interest rates, securities prices
or currency exchange rates may result in a poorer overall performance of a Fund than if it had not entered into any derivatives transactions.
Derivatives may magnify a Fund’s gains or losses, causing it to make or lose substantially more than it invested.

 

When used for hedging purposes, increases in the value
of the securities a Fund holds or intends to acquire should offset any losses incurred with a derivative. Purchasing derivatives for purposes
other than hedging could expose the Fund to greater risks.

 

Use of derivatives involves transaction costs, which
may be significant, and may also increase the amount of taxable income to shareholders.

 

Correlation of Prices. The Funds’ ability
to hedge their securities through derivatives depends on the degree to which price movements in the underlying index or instrument correlate
with price movements in the relevant securities. In the case of poor correlation, the price of the securities a Fund is hedging may not
move in the same amount, or even in the same direction as the hedging instrument. The Adviser and the Sub-Adviser will try to minimize
this risk by investing in only those contracts whose behavior it expects to correlate with the behavior of the portfolio securities it
is trying to hedge. However, if the Adviser’s and the Sub-Adviser’s prediction of interest and currency rates, market value,
volatility or other economic factors is incorrect, a Fund may lose money, or may not make as much money as it expected.

 

Derivative prices can diverge from the prices of their
underlying instruments, even if the characteristics of the underlying instruments are very similar to the derivative. Listed below are
some of the factors that may cause such a divergence:

 

Current and anticipated short-term interest rates, changes in volatility of the underlying instrument,
and the time remaining until expiration of the contract;

 

A difference between the derivatives and securities markets, including different levels of demand, how
the instruments are traded, the imposition of daily price fluctuation limits or discontinued trading of an instrument; and

 

Differences between the derivatives, such as different margin requirements, different liquidity of such
markets and the participation of speculators in such markets.

 

Derivatives based upon a narrower index of securities,
such as those of a particular industry group, may present greater risk than derivatives based on a broad market index. Since narrower
indices are made up of a smaller number of securities, they are more susceptible to rapid and extreme price fluctuations because of changes
in the value of those securities.

 

While currency futures and options values are expected
to correlate with exchange rates, they may not reflect other factors that affect the value of the investments of the Funds. A currency
hedge, for example, should protect a yen-denominated security from a decline in the yen, but will not protect a Fund against a price decline
resulting from deterioration in the issuer’s creditworthiness. Because the value of a Fund’s foreign-denominated investments
changes in response to many factors other than exchange rates, it may not be possible to match the amount of currency options and futures
to the value of such Fund’s investments precisely over time.

 

Lack of Liquidity. Before a futures contract
or option is exercised or expires, a Fund can terminate it only by entering into a closing purchase or sale transaction. Moreover, a Fund
may close out a futures contract only on the exchange the contract was initially traded. Although the Funds intend to purchase options
and futures only where there appears to be an active market, there is no guarantee that such a liquid market will exist. If there is no
secondary market for the contract, or the market is illiquid, a Fund may not be able to close out its position. In an illiquid market,
a Fund may:

 

Have to sell securities to meet its daily margin requirements at a time when it is disadvantageous to
do so;

 

Have to purchase or sell the instrument underlying the contract;

 

Not be able to hedge its investments; and/or

 

Not be able to realize profits or limit its losses.

 

Derivatives may become illiquid (i.e., difficult to
sell at a desired time and price) under a variety of market conditions. For example:

 

An exchange may suspend or limit trading in a particular derivative instrument, an entire category of
derivatives or all derivatives, which sometimes occurs because of increased market volatility;

 

Unusual or unforeseen circumstances may interrupt normal operations of an exchange;

 

The facilities of the exchange may not be adequate to handle current trading volume;

 

Equipment failures, government intervention, insolvency of a brokerage firm or clearing house or other
occurrences may disrupt normal trading activity; or

 

Investors may lose interest in a particular derivative or category of derivatives.

 

Management Risk. Successful use of derivatives
by the Funds is subject to the ability of the Adviser and the Sub-Adviser to forecast stock market and interest rate trends. If the Adviser
and the Sub-Adviser incorrectly predicts stock market and interest rate trends, the Funds may lose money by investing in derivatives.
For example, if a Fund were to write a call option based on the Adviser’s and the Sub-Adviser’s expectation that the price
of the underlying security would fall, but the price were to rise instead, the Fund could be required to sell the security upon exercise
at a price below the current market price. Similarly, if a Fund were to write a put option based on the Adviser’s and the Sub-Adviser’s
expectation that the price of the underlying security would rise, but the price were to fall instead, the Fund could be required to purchase
the security upon exercise at a price higher than the current market price.

 

Pricing Risk. At times, market conditions might
make it hard to value some investments. For example, if a Fund has valued its securities too high, shareholders may end up paying too
much for Fund shares when they buy into the Fund. If the Fund underestimates its price, shareholders may not receive the full market value
for their Fund shares when they sell.

 

Margin. Because of the low margin deposits
required upon the opening of a derivative position, such transactions involve an extremely high degree of leverage. Consequently, a relatively
small price movement in a derivative may result in an immediate and substantial loss (as well as gain) to a Fund and it may lose more
than it originally invested in the derivative.

 

If the price of a futures contract changes adversely,
a Fund may have to sell securities at a time when it is disadvantageous to do so to meet its minimum daily margin requirement. A Fund
may lose its margin deposits if a broker-dealer with whom it has an open futures contract or related option becomes insolvent or declares
bankruptcy.

 

Volatility and Leverage. The Funds’ use
of derivatives may have a leveraging effect. Leverage generally magnifies the effect of any increase or decrease in value of an underlying
asset and results in increased volatility, which means the Funds will have the potential for greater gains, as well as the potential for
greater losses, than if the Funds do not use derivative instruments that have a leveraging effect. The prices of derivatives are volatile
(i.e., they may change rapidly, substantially and unpredictably) and are influenced by a variety of factors, including:

 

Actual and anticipated changes in interest rates;

 

Fiscal and monetary policies; and

 

National and international political events.

 

Most exchanges limit the amount by which the price
of a derivative can change during a single trading day. Daily trading limits establish the maximum amount that the price of a derivative
may vary from the settlement price of that derivative at the end of trading on the previous day. Once the price of a derivative reaches
that value, a Fund may not trade that derivative at a price beyond that limit. The daily limit governs only price movements during a given
day and does not limit potential gains or losses. Derivative prices have occasionally moved to the daily limit for several consecutive
trading days, preventing prompt liquidation of the derivative.

 

Government Regulation. The regulation of derivatives
markets in the U.S. is a rapidly changing area of law and is subject to modification by government and judicial action. In particular,
the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law in 2010, grants significant new authority to the SEC and
the CFTC to impose comprehensive regulations on the over-the-counter and cleared derivatives markets. These regulations include, but are
not limited to, mandatory clearing of certain derivatives and requirements relating to disclosure, margin and trade reporting. The new
law and regulations may negatively impact the Funds by increasing transaction and/or regulatory compliance costs, limiting the availability
of certain derivatives or otherwise adversely affecting the value or performance of the derivatives the Funds trade.

 

On October 28, 2020, the SEC adopted Rule 18f-4 (the
“Derivatives Rule”) under the 1940 Act which, following an implementation period, will replace existing SEC and staff guidance
with an updated, comprehensive framework for registered funds’ use of derivatives. Among other changes, the Derivatives Rule will
require the Funds to trade derivatives and certain other instruments that create future payment or delivery obligations subject to a value-at-risk
(“VaR”) leverage limit, develop and implement a derivatives risk management program and new testing requirements, and comply
with new requirements related to board and SEC reporting. These new requirements will apply unless a Fund qualifies as a “limited
derivatives user,” as defined in the Derivatives Rule. Complying with the Derivatives Rule may increase the cost of the Funds’
investments and cost of doing business, which could adversely affect investors. Other potentially adverse regulatory obligations can develop
suddenly and without notice.

 

Illiquid Investments

 

Illiquid investments are investments that a Fund reasonably
expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly
changing the market value of the investment. Because of their illiquid nature, illiquid investments must be priced at fair value as determined
in good faith pursuant to procedures approved by the Board. Despite such good faith efforts to determine fair value prices, a Fund’s
illiquid investments are subject to the risk that the investment’s fair value price may differ from the actual price which the Fund
may ultimately realize upon its sale or disposition. Difficulty in selling illiquid investments may result in a loss or may be costly
to a Fund. Under the supervision of the Board, the Adviser and/or the Sub-Adviser determine the liquidity of a Fund’s investments.
A Fund may not acquire an illiquid investment if, immediately after the acquisition, the Fund would have invested more than 15% of its
net assets in illiquid investments that are assets.

 

Securities Lending

 

A Fund may lend portfolio securities to brokers, dealers
and other financial organizations that meet capital and other credit requirements or other criteria established by the Board. These loans,
if and when made, may not exceed 33 1/3% of the total asset value of the Fund (including the loan collateral). A Fund will not lend portfolio
securities to the Adviser, the Sub-Adviser or their affiliates unless permissible under the 1940 Act and the rules and promulgations thereunder.
Loans of portfolio securities will be fully collateralized by cash, letters of credit or U.S. government securities, and the collateral
will be maintained in an amount equal to at least 100% of the current market value of the loaned securities by marking to market daily.
Any gain or loss in the market price of the securities loaned that might occur during the term of the loan would be for the account of
a Fund.

 

A Fund may pay a part of the interest earned from
the investment of collateral, or other fee, to an unaffiliated third party for acting as the Fund’s securities lending agent, but
will bear all of any losses from the investment of collateral.

 

By lending its securities, a Fund may increase its
income by receiving payments from the borrower that reflect the amount of any interest or any dividends payable on the loaned securities
as well as by either investing cash collateral received from the borrower in short-term instruments or obtaining a fee from the borrower
when U.S. government securities or letters of credit are used as collateral. Investing cash collateral subjects the Fund to market risk.
A Fund remains obligated to return all collateral to the borrower under the terms of its securities lending arrangements, even if the
value of investments made with the collateral decline. Accordingly, if the value of a security in which the cash collateral has been invested
declines, the loss would be borne by a Fund, and the Fund may be required to liquidate other investments in order to return collateral
to the borrower at the end of the loan. A Fund will adhere to the following conditions whenever its portfolio securities are loaned: (i)
the Fund must receive at least 100% cash collateral or equivalent securities of the type discussed above from the borrower; (ii) the borrower
must increase such collateral whenever the market value of the securities rises above the level of such collateral; (iii) the Fund must
be able to terminate the loan on demand; (iv) the Fund must receive reasonable interest on the loan, as well as any dividends, interest
or other distributions on the loaned securities and any increase in market value; (v) the Fund may pay only reasonable fees in connection
with the loan (which fees may include fees payable to the lending agent, the borrower, the Fund’s administrator and the custodian);
and (vi) voting rights on the loaned securities may pass to the borrower, provided, however, that if a material event adversely affecting
the investment occurs, the Fund must terminate the loan and regain the right to vote the securities. In such instances, the Adviser or
the Sub-Adviser will vote the securities in accordance with their proxy voting policies and procedures. The Board has adopted procedures
reasonably designed to ensure that the foregoing criteria will be met. Loan agreements involve certain risks in the event of default or
insolvency of the borrower, including possible delays or restrictions upon a Fund’s ability to recover the loaned securities or
dispose of the collateral for the loan, which could give rise to loss because of adverse market action, expenses and/or delays in connection
with the disposition of the underlying securities.

 

Restricted Securities

 

The Funds may purchase restricted securities. Restricted
securities are securities that may not be sold freely to the public absent registration under the Securities Act of 1933, as amended (the
“1933 Act”) or an exemption from registration. This generally includes securities that are unregistered that can be sold to
qualified institutional buyers in accordance with Rule 144A under the 1933 Act or securities that are exempt from registration under the
1933 Act, such as commercial paper. Institutional markets for restricted securities have developed as a result of the promulgation of
Rule 144A under the 1933 Act, which provides a “safe harbor” from 1933 Act registration requirements for qualifying sales
to institutional investors. When Rule 144A restricted securities present an attractive investment opportunity and meet other selection
criteria, a Fund may make such investments whether or not such securities are “illiquid” depending on the market that exists
for the particular security. The Board has delegated the responsibility for determining the liquidity of Rule 144A restricted securities
that a Fund may invest in to the Adviser.

 

Short Sales

 

The Funds may engage in short sales that are either
“uncovered” or “against the box.” A short sale is “against the box” if at all times during which the
short position is open, a Fund owns at least an equal amount of the securities or securities convertible into, or exchangeable without
further consideration for, securities of the same issue as the securities that are sold short. A short sale against the box is a taxable
transaction to a Fund with respect to the securities that are sold short.

 

Uncovered short sales are transactions under which
the Funds sell a security they do not own. To complete such a transaction, a Fund must borrow the security to make delivery to the buyer.
A Fund then is obligated to replace the security borrowed by purchasing the security at the market price at the time of the replacement.
The price at such time may be more or less than the price at which the security was sold by the Fund. Until the security is replaced,
the Fund is required to pay the lender amounts equal to any dividends or interest that accrue during the period of the loan. To borrow
the security, the Fund also may be required to pay a premium, which would increase the cost of the security sold. The proceeds of the
short sale will be retained by the broker, to the extent necessary to meet margin requirements, until the short position is closed out.

 

Until a Fund closes its short position or replaces
the borrowed security, the Fund may: (a) segregate cash or liquid securities at such a level that the amount segregated plus the amount
deposited with the broker as collateral will equal the current value of the security sold short; or (b) otherwise cover the Fund’s
short position.

 

When-Issued, Delayed–Delivery and Forward-Delivery
Transactions

 

A when-issued security is one whose terms are available
and for which a market exists, but which has not been issued. In a forward-delivery transaction, a Fund contracts to purchase securities
for a fixed price at a future date beyond customary settlement time. “Delayed-delivery” refers to securities transactions
on the secondary market where settlement occurs in the future. In each of these transactions, the parties fix the payment obligation and
the interest rate that they will receive on the securities at the time the parties enter the commitment; however, they do not pay money
or deliver securities until a later date. Typically, no income accrues on securities a Fund has committed to purchase before the securities
are delivered, although the Fund may earn income on securities it has in a segregated account to cover its position. A Fund will only
enter into these types of transactions with the intention of actually acquiring the securities, but may sell them before the settlement
date.

 

A Fund may use when-issued, delayed-delivery and forward-delivery
transactions to secure what it considers an advantageous price and yield at the time of purchase. When a Fund engages in when-issued,
delayed-delivery or forward-delivery transactions, it relies on the other party to consummate the sale. If the other party fails to complete
the sale, the Fund may miss the opportunity to obtain the security at a favorable price or yield.

 

When purchasing a security on a when-issued, delayed-delivery,
or forward-delivery basis, a Fund assumes the rights and risks of ownership of the security, including the risk of price and yield changes.
At the time of settlement, the market value of the security may be more or less than the purchase price. The yield available in the market
when the delivery takes place also may be higher than those obtained in the transaction itself. Because the Fund does not pay for the
security until the delivery date, these risks are in addition to the risks associated with its other investments.

 

The Funds will segregate cash or liquid securities
equal in value to commitments for the when-issued, delayed-delivery or forward-delivery transactions. The Funds will segregate additional
liquid assets daily so that the value of such assets is equal to the amount of the commitments.

 

Special Risks of Cyber-attacks

 

As with any entity that conducts business through
electronic means in the modern marketplace, the Funds, and their service providers, may be susceptible to operational and information
security risks resulting from cyber-attacks. Cyber-attacks include, among other behaviors, stealing or corrupting data maintained online
or digitally, denial of service attacks on websites, the unauthorized monitoring, release, misuse, loss, destruction or corruption of
confidential information, unauthorized access to relevant systems, compromises to networks or devices that the Funds and their service
providers use to service the Funds’ operations, ransomware, operational disruption or failures in the physical infrastructure or
operating systems that support the Funds and their service providers, or various other forms of cyber security breaches. Cyber-attacks
affecting the Funds or the Adviser, the Sub-Adviser, the Funds’ distributor, custodian, or any other of the Funds’ intermediaries
or service providers may adversely impact the Funds and their shareholders, potentially resulting in, among other things, financial losses
or the inability of Fund shareholders to transact business. For instance, cyber-attacks may interfere with the processing of shareholder
transactions, impact a Fund’s ability to calculate its net asset value, cause the release of private shareholder information or
confidential business information, impede trading, subject the Fund to regulatory fines or financial losses and/or cause reputational
damage. The Funds may also incur additional costs for cyber security risk management purposes designed to mitigate or prevent the risk
of cyber-attacks. Such costs may be ongoing because threats of cyber-attacks are constantly evolving as cyber attackers become more sophisticated
and their techniques become more complex. Similar types of cyber security risks are also present for issuers of securities in which the
Funds may invest, which could result in material adverse consequences for such issuers and may cause the Funds’ investments in such
companies to lose value. There can be no assurance that the Funds, the Funds’ service providers, or the issuers of the securities
in which the Funds invest will not suffer losses relating to cyber-attacks or other information security breaches in the future.

 

LIBOR Replacement Risk

 

The London Inter-Bank Offered Rate (“LIBOR”),
which is used extensively in the U.S. and globally as a benchmark or reference rate for various commercial and financial contracts, is
expected to be discontinued. The elimination of LIBOR may adversely affect the interest rates on, and value of, certain Fund investments
for which the value is tied to LIBOR. Such investments may include bank loans, derivatives, floating rate securities, and other assets
or liabilities tied to LIBOR. On July 27, 2017, the U.K. Financial Conduct Authority announced that it intends to stop compelling or inducing
banks to submit LIBOR rates after 2021. On March 5, 2021, Ice Benchmark Administrator (“IBA”) clarified that the publication
of LIBOR on a representative basis will cease for the one-week and two-month U.S. dollar LIBOR settings immediately after December 31,
2021 and for the remaining U.S. dollar LIBOR settings immediately after June 30, 2023. Actions by regulators have resulted in the establishment
of alternative reference rates to LIBOR in most major currencies. The U.S. Federal Reserve, based on the recommendations of the New York
Federal Reserve’s Alternative Reference Rate Committee (comprised of major derivative market participants and their regulators),
has begun publishing a Secured Overnight Financing Rate (“SOFR”), which is intended to replace U.S. dollar LIBOR. Alternative
reference rates for other currencies have also been announced or have already begun publication. Markets are slowly developing in response
to these new rates. Questions around liquidity impacted by these rates, and how to appropriately adjust these rates at the time of transition,
remain a concern for the Funds. The effect of any changes to, or discontinuation of, LIBOR on the Funds will vary depending on, among
other things, (1) existing fallback or termination provisions in individual contracts and (2) whether, how, and when industry participants
develop and adopt new reference rates and fallbacks for both legacy and new products and instruments. The expected discontinuation of
LIBOR could have a significant impact on the financial markets in general and may also present heightened risk to market participants,
including public companies, investment advisers, other investment companies, and broker-dealers. The risks associated with this discontinuation
and transition will be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed
in a timely manner. Accordingly, it is difficult to predict the full impact of the transition away from LIBOR on the Funds until new reference
rates and fallbacks for both legacy and new products, instruments and contracts are commercially accepted.

 

General Market Risk

 

An outbreak of respiratory disease caused by a novel
coronavirus designated as COVID-19 was first detected in China in December 2019 and subsequently spread internationally. The transmission
of COVID-19 and efforts to contain its spread have resulted in international, national and local border closings and other significant
travel restrictions and disruptions, significant disruptions to business operations, supply chains and customer activity, event cancellations
and restrictions, service cancellations, reductions and other changes, significant challenges in healthcare service preparation and delivery,
and quarantines, as well as general concern and uncertainty that has negatively affected the economic environment. These impacts also
have caused significant volatility and declines in global financial markets, which have caused losses for investors. The impact of this
COVID-19 pandemic may be short term or may last for an extended period of time, and in either case could result in a substantial economic
downturn or recession. Health crises caused by viral or bacterial outbreaks, such as the COVID-19 outbreak, may exacerbate other pre-existing
political, social, economic, market and financial risks. The impact of this outbreak, and other epidemics and pandemics that may arise
in the future, could negatively affect the global economy, as well as the economies of individual countries, the financial performance
of individual companies and sectors, and the markets in general in significant and unforeseen ways. Any such impact could adversely affect
the prices and liquidity of the securities and other instruments in which the Funds invest, which in turn could negatively impact the
Funds’ performance and cause losses on your investment in the Funds.

 

INVESTMENT LIMITATIONS

 

Fundamental Policies

 

The following investment limitations are fundamental,
which means that a Fund cannot change them without approval by the vote of a majority of the outstanding shares of the Fund. The phrase
“majority of the outstanding shares” means the vote of (i) 67% or more of a Fund’s shares present at a meeting, if more
than 50% of the outstanding shares of the Fund are present or represented by proxy, or (ii) more than 50% of the Fund’s outstanding
shares, whichever is less.

 

1. Each Fund may not purchase securities of an issuer that would cause the Fund to fail to satisfy the diversification
requirement for a diversified management company under the 1940 Act, the rules or regulations thereunder or any exemption therefrom, as
such statute, rules or regulations may be amended or interpreted from time to time.

 

2. Each Fund may not concentrate investments in a particular industry or group of industries, as concentration
is defined under the 1940 Act, the rules and regulations thereunder or any exemption therefrom, as such statute, rules or regulations
may be amended or interpreted from time to time, except that the Fund may invest without limitation in securities issued or guaranteed
by the U.S. government, its agencies or instrumentalities and repurchase agreements involving such securities or tax-exempt obligations
of state or municipal governments and their political subdivisions.

 

3. Each Fund may borrow money or issue senior securities (as defined under the 1940 Act), except as prohibited
under the 1940 Act, the rules and regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended
or interpreted from time to time.

 

4. Each Fund may make loans, except as prohibited under the 1940 Act, the rules and regulations thereunder
or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from time to time.

 

5. Each Fund may purchase or sell commodities or real estate, except as prohibited under the 1940 Act, the
rules and regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from
time to time.

 

6. Each Fund may underwrite securities issued by other persons, except as prohibited under the 1940 Act,
the rules and regulations thereunder or any exemption therefrom, as such statute, rules or regulations may be amended or interpreted from
time to time.

 

The following descriptions of certain provisions of
the 1940 Act may assist investors in understanding the above policies and restrictions:

 

Concentration. The 1940 Act requires that every
investment company have a fundamental investment policy regarding concentration. The SEC has defined concentration as investing 25% or
more of an investment company’s total assets in any particular industry or group of industries, with certain exceptions. For purposes
of a Fund’s concentration policy, the Fund may classify and re-classify companies in a particular industry and define and re-define
industries in any reasonable manner, consistent with SEC and SEC staff guidance.

 

Borrowing. The 1940 Act presently allows an
investment company to borrow from any bank in an amount up to 33 1/3% of its total assets (including the amount borrowed) and to borrow
for temporary purposes in an amount not exceeding 5% of the value of its total assets.

 

Lending. Under the 1940 Act, an investment
company may only make loans if expressly permitted by its investment policies.

 

Senior Securities. Senior securities may include
any obligation or instrument issued by a fund evidencing indebtedness. The 1940 Act generally prohibits funds from issuing senior securities,
although it does not treat certain transactions as senior securities, such as certain derivatives, short sales, reverse repurchase agreements,
firm commitment agreements and standby commitments, with appropriate earmarking or segregation of assets to cover such obligation.

 

Real Estate and Commodities. The 1940 Act does
not directly restrict an investment company’s ability to invest in real estate or commodities, but does require that every investment
company have a fundamental investment policy governing such investments.

 

Underwriting. Under the 1940 Act, underwriting
securities involves an investment company purchasing securities directly from an issuer for the purpose of selling (distributing) them
or participating in any such activity either directly or indirectly. Under the 1940 Act, a diversified fund may not make any commitment
as underwriter, if immediately thereafter the amount of its outstanding underwriting commitments, plus the value of its investments in
securities of issuers (other than investment companies) of which it owns more than 10% of the outstanding voting securities, exceeds 25%
of the value of its total assets.

 

Except with respect to a Fund’s policy concerning
borrowing, if a percentage restriction is adhered to at the time of an investment, a later increase or decrease in percentage resulting
from changes in values or assets will not constitute a violation of such restriction. With respect to the limitation on borrowing, in
the event that a subsequent change in net assets or other circumstances causes a Fund to exceed its limitation, the Fund will take steps
to bring the aggregate amount of borrowing back within the limitation within three days thereafter (not including Sundays and holidays).

 

THE ADVISER AND SUB-ADVISER

 

Investment Adviser

 

General. Perpetual US Services LLC, doing
business as PGIA (the “Adviser” or “Perpetual-PGIA”), a Delaware limited liability company organized in 2020,
serves as the investment adviser to the Funds and is registered with the SEC as an investment adviser. The Adviser’s principal
place of business is 155 North Wacker Drive, Suite 4250, Chicago, Illinois 60606. [Adviser ownership information to be inserted.] As of
[Date], the Adviser had approximately $[____] in assets under management.

 

The Adviser makes investment decisions for the Funds
and continuously reviews, supervises and administers each Fund’s investment program. [In addition, the Adviser oversees Barrow,
Hanley, Mewhinney & Strauss, LLC (the “Sub-Adviser” or “Barrow Hanley”) to ensure the Sub-Adviser’s
compliance with the investment policies and guidelines of the Funds and monitors the Sub-Adviser’s adherence to its investment styles.]
The Board supervises the Adviser and the Sub-adviser and establishes policies that the Adviser and the Sub-Adviser must follow in their
management activities.

 

Advisory Agreement. The Trust and the Adviser
have entered into an investment advisory agreement (the “Advisory Agreement”) with respect to the Funds. Under the Advisory
Agreement, the Adviser serves as the investment adviser and makes investment decisions for each Fund and continuously reviews, supervises
and administers the investment program of each Fund, subject to the supervision of, and policies established by, the Board.

 

After the initial two-year term, the continuance of
the Advisory Agreement must be specifically approved at least annually: (i) by the vote of the Trustees or by a vote of the majority of
the outstanding voting securities of each Fund; and (ii) by the vote of a majority of the Trustees who are not parties to the Advisory
Agreement or “interested persons” of any party thereto, cast in person at a meeting called for the purpose of voting on such
approval. The Advisory Agreement will terminate automatically in the event of its assignment, and is terminable at any time without penalty
by the Trustees or, with respect to a Fund, by a majority of the outstanding voting securities of that Fund on at least 30 days’
written notice to the Adviser, or, by the Adviser, on not more than 60 days’ nor less than 30 days’ written notice to the
Trust. As used in the Advisory Agreement, the terms “majority of the outstanding voting securities,” “interested persons”
and “assignment” have the same meaning as such terms in the 1940 Act.

 

Advisory Fees Paid to the Adviser. For its
services under the Advisory Agreement, the Adviser is entitled to a fee, which is calculated daily and paid monthly, at the following
annual rates based on the average daily net assets of each Fund:

 

Fund Advisory Fee Rate
Emerging Markets Value Fund 0.87%
International Value Fund 0.66%

 

The Adviser pays the Sub-Adviser out of the advisory
fees it receives from the Funds.

 

For each Fund, the Adviser has contractually agreed
to waive fees and reimburse expenses to the extent necessary to keep total annual Fund operating expenses (excluding interest, taxes,
brokerage commissions and other costs and expenses relating to the securities that are purchased and sold by the Fund, shareholder servicing
fees, acquired fund fees and expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles
and other non-routine expenses, such as litigation (collectively, “excluded expenses”)) for I Shares and Y Shares from exceeding
certain levels as set forth below until February 28, 2023 (each, a “contractual expense limit”). This agreement will terminate
automatically upon the termination of the Advisory Agreement and may be terminated: (i) by the Board, for any reason at any time; or (ii)
by the Adviser, upon ninety (90) days’ prior written notice to the Trust, effective as of the close of business on February 28,
2023.

 

Contractual Expense Limits
Fund I Shares Y Shares
Emerging Markets Value Fund 0.99% 0.99%
International Value Fund 0.86% 0.86%

 

In addition, the Adviser may receive from a Fund the
difference between the total annual Fund operating expenses (not including excluded expenses) and the contractual expense limit to recoup
all or a portion of its prior fee waivers or expense reimbursements made during the rolling three-year period preceding the recoupment
if at any point total annual Fund operating expenses (not including excluded expenses) are below the contractual expense limit (i) at
the time of the fee waiver and/or expense reimbursement and (ii) at the time of the recoupment.

 

Investment Sub-Adviser

 

Barrow, Hanley, Mewhinney & Strauss, LLC.
Barrow Hanley, located at 2200 Ross Avenue, 31st Floor, Dallas, TX 75201, serves as a sub-adviser to the Funds. Barrow Hanley, a Delaware
limited liability company, is registered as an investment adviser with the SEC and was founded in 1979. Barrow Hanley provides investment
advisory services to large institutional clients, mutual funds, employee benefit plans, endowments, foundations, limited liability companies
and other institutions and individuals. Barrow Hanley is an indirect subsidiary of Perpetual Limited, a public company listed on the Australian
Stock Exchange.

 

Sub-Advisory Agreement. The provision of investment
advisory services by the Sub-Adviser is governed by an individual investment sub-advisory agreement between the Sub-Adviser and the Adviser
(“the Sub-Advisory Agreement”). Under the Sub-Advisory Agreement, the Sub-Adviser is responsible for the day-to-day management
of the Funds, makes investment decisions for the Funds and administers the investment program of the Funds, subject to the supervision
of, and policies established by, the Adviser and the Board.

 

After the initial two-year term, the continuance of
the Sub-Advisory Agreement must be specifically approved at least annually: (i) by the vote of the Trustees or by a vote of the majority
of the outstanding voting securities of the Fund and (ii) by the vote of a majority of the Trustees who are not parties to the Sub-Advisory
Agreement or “interested persons” of any party thereto, cast in person at a meeting called for the purpose of voting on such
approval. The Sub-Advisory Agreement will terminate automatically in the event of its assignment or in the event of the termination of
the Advisory Agreement, and is terminable at any time without penalty by the Board.

 

Sub-Advisory Fee. For the services provided
pursuant to the Sub-Advisory Agreement, the Sub-Adviser receives an annual fee from the Adviser at the following annual rates based on
the average daily net assets of the Funds:

 

Fund Sub-Advisory Fee Rate
Emerging Markets Value Fund [____]%
International Value Fund [____]%

 

THE PORTFOLIO MANAGERS

 

This section includes information about the Funds’
portfolio managers, including information about other accounts they manage, the dollar range of Fund shares they own and how they are
compensated.

 

Compensation. Compensation of Barrow Hanley’s
investment professionals is tied to their overall contribution to the success of Barrow Hanley. In addition to base salary, all portfolio
managers and analysts are eligible to participate in a bonus pool. The amount of bonus compensation is based on quantitative and qualitative
factors and may be substantially higher than an investment professional’s base compensation. Portfolio managers and analysts are
evaluated on the value each adds to the overall investment process and performance, and their contributions in other areas, such as meetings
with clients and consultants. Bonus compensation for analysts is directly tied to their investment recommendations, which are evaluated
every six months versus the appropriate industry group/sector benchmark based on trailing one-year and three-year relative performance.

 

All employees, including analysts and portfolio managers,
receive an annual 15% (up to IRS limits) of the firm’s profits as a contribution to their 401(K) account.

 

The final component of compensation of key employees,
including portfolio managers and analysts, is their interest in Barrow Hanley’s equity plan. Each quarter, equity owners receive
a share of the firm’s profits in the form of a dividend, which is related to the performance of the entire firm.

 

Fund Shares Owned by the Portfolio Managers. The
Funds are required to show the dollar amount range of each portfolio manager’s “beneficial ownership” of shares of the
Funds as of the end of the most recently completed fiscal year. Dollar amount ranges disclosed are established by the SEC. “Beneficial
ownership” is determined in accordance with Rule 16a-1(a)(2) under the Securities Exchange Act of 1934, as amended (the “1934
Act”). Because the Funds are new, as of the date of this SAI, the portfolio managers did not beneficially own shares of the Funds.

 

Other Accounts. In addition to the Funds, the
portfolio managers may also be responsible for the day-to-day management of certain other accounts, as indicated by the following table.
The information below is provided as of June 30, 2021.

 

Name

Registered

Investment Companies

Other Pooled

Investment Vehicles

Other Accounts
Number of Accounts Total Assets (in Millions) Number of Accounts Total Assets (in Millions) Number of Accounts Total Assets (in Millions)
Randolph Wrighton, Jr.1 [1] $709.3 1 $1.5 3 $386.3
Sherry Zhang2 1 $21.8 1 $1.5 1 $131.1
David Feygenson3 1 $21.8 1 $1.5 1 $131.1
TJ Carter4 25 $1,058.6 1 $236.1 3 $1,303.0

 

1 Mr. Wrighton is a member of various other equity value teams managing 8 other accounts and approximately
$2.3 billion.
2 Mrs. Zhang is a member of various other equity value teams managing 5 other accounts and approximately
$463 million.
3 Mr. Feygenson is a member of various other equity value teams managing 5 other accounts and approximately
$463 million.
4 Mr. Carter is a member of various other equity value teams managing 13 other accounts and approximately
$8.5 billion.
5 Includes 1 account with assets under management of $93.8 million that is subject to a performance-based
advisory fee.

 

Conflicts of Interest.

 

Actual or potential conflicts of interest may arise
when a portfolio manager has management responsibilities for more than one account including mutual fund or private commingled fund accounts.
Barrow Hanley manages potential conflicts between funds and/or types of accounts through trade allocation policies and procedures, internal
review processes, and oversight by the CCO, directors, and independent third parties. Barrow Hanley’s investment management and
trading policies are designed to address potential conflicts in situations where two or more funds or accounts participate in investment
decisions involving the same securities or issuer.

 

THE ADMINISTRATOR

 

General. SEI Investments Global Funds Services
(the “Administrator”), a Delaware statutory trust, has its principal business offices at One Freedom Valley Drive, Oaks, Pennsylvania
19456. SEI Investments Management Corporation (“SIMC”), a wholly-owned subsidiary of SEI Investments Company (“SEI Investments”),
is the owner of all beneficial interest in the Administrator. SEI Investments and its subsidiaries and affiliates, including the Administrator,
are leading providers of fund valuation services, trust accounting systems, and brokerage and information services to financial institutions,
institutional investors, and money managers. The Administrator and its affiliates also serve as administrator or sub-administrator to
other mutual funds.

 

Administration Agreement with the Trust. The
Trust and the Administrator have entered into an amended and restated administration agreement dated November 16, 2018 (the “Administration
Agreement”). Under the Administration Agreement, the Administrator provides the Trust with administrative services, including regulatory
reporting and all necessary office space, equipment, personnel and facilities.

 

The Administration Agreement provides that the Administrator
shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Trust in connection with the matters to
which the Administration Agreement relates, except a loss resulting from willful misfeasance, bad faith or gross negligence on the part
of the Administrator in the performance of its duties or from reckless disregard by it of its duties and obligations thereunder.

 

Administration Fees Paid to the Administrator.
For its services under the Administration Agreement, the Administrator is paid a fee, which varies based on the average daily net assets
of the Funds, subject to certain minimums.

 

THE DISTRIBUTOR

 

The Trust and SEI Investments Distribution Co. (the
“Distributor”), a wholly-owned subsidiary of SEI Investments, and an affiliate of the Administrator, are parties to a distribution
agreement dated February 12, 2014, as amended (the “Distribution Agreement”), whereby the Distributor acts as a principal
underwriter for the Trust’s shares. The principal business address of the Distributor is One Freedom Valley Drive, Oaks, Pennsylvania
19456.

 

The continuance of the Distribution Agreement must
be specifically approved at least annually (i) by the vote of the Trustees or by a vote of the majority of the outstanding voting securities
of the Trust and (ii) by the vote of a majority of the Trustees who are not “interested persons” of the Trust and have no
direct or indirect financial interest in the operations of the Distribution Agreement or any related agreement, cast in person at a meeting
called for the purpose of voting on such approval. The Distribution Agreement will terminate automatically in the event of its assignment
(as such term is defined in the 1940 Act), and is terminable at any time without penalty by the Board or by a majority of the outstanding
voting securities of the Trust, or by the Distributor, upon not less than 60 days’ written notice to the other party.

 

PAYMENTS TO FINANCIAL INTERMEDIARIES

 

Shareholder Servicing Plan. The Funds have
adopted a shareholder servicing plan under which a shareholder servicing fee of up to 0.15% of the average daily net assets of Y Shares
of the Funds will be paid to financial intermediaries. Under the plan, financial intermediaries may perform, or may compensate other financial
intermediaries for performing, certain shareholder and/or administrative services or similar non-distribution services, including: (i)
maintaining shareholder accounts; (ii) arranging for bank wires; (iii) responding to shareholder inquiries relating to the services performed
by the financial intermediaries; (iv) responding to inquiries from shareholders concerning their investment in the Funds; (v) assisting
shareholders in changing dividend options, account designations and addresses; (vi) providing information periodically to shareholders
showing their position in the Funds; (vii) forwarding shareholder communications from the Funds such as proxies, shareholder reports,
annual reports, and dividend and capital gain distribution and tax notices to shareholders; (viii) processing purchase, exchange and redemption
requests from shareholders and placing orders with the Funds or their service providers; (ix) providing sub-accounting services; (x) processing
dividend and capital gain payments from the Funds on behalf of shareholders; (xi) preparing tax reports; and (xii) providing such other
similar non-distribution services as the Funds may reasonably request to the extent that the financial intermediary is permitted to do
so under applicable laws or regulations.

 

Payments by the Adviser. The Adviser and/or
its affiliates, in their discretion, may make payments from their own resources and not from Fund assets to affiliated or unaffiliated
brokers, dealers, banks (including bank trust departments), trust companies, registered investment advisers, financial planners, retirement
plan administrators, insurance companies, and any other institution having a service, administration, or any similar arrangement with
the Funds, their service providers or their respective affiliates, as incentives to help market and promote the Funds and/or in recognition
of their distribution, marketing, administrative services, and/or processing support.

 

These additional payments may be made to financial
intermediaries that sell Fund shares or provide services to the Funds, the Distributor or shareholders of the Funds through the financial
intermediary’s retail distribution channel and/or fund supermarkets. Payments may also be made through the financial intermediary’s
retirement, qualified tuition, fee-based advisory, wrap fee bank trust, or insurance (e.g., individual or group annuity) programs. These
payments may include, but are not limited to, placing the Funds in a financial intermediary’s retail distribution channel or on
a preferred or recommended fund list; providing business or shareholder financial planning assistance; educating financial intermediary
personnel about the Funds; providing access to sales and management representatives of the financial intermediary; promoting sales of
Fund shares; providing marketing and educational support; maintaining share balances and/or for sub-accounting, administrative or shareholder
transaction processing services. A financial intermediary may perform the services itself or may arrange with a third party to perform
the services.

 

The Adviser and/or its affiliates may also make payments
from their own resources to financial intermediaries for costs associated with the purchase of products or services used in connection
with sales and marketing, participation in and/or presentation at conferences or seminars, sales or training programs, client and investor
entertainment and other sponsored events. The costs and expenses associated with these efforts may include travel, lodging, sponsorship
at educational seminars and conferences, entertainment and meals to the extent permitted by law.

 

Revenue sharing payments may be negotiated based on
a variety of factors, including the level of sales, the amount of Fund assets attributable to investments in the Funds by financial intermediaries’
customers, a flat fee or other measures as determined from time to time by the Adviser and/or its affiliates. A significant purpose of
these payments is to increase the sales of Fund shares, which in turn may benefit the Adviser through increased fees as Fund assets grow.

 

Investors should understand that some financial intermediaries
may also charge their clients fees in connection with purchases of shares or the provision of shareholder services.

 

THE TRANSFER AGENT

 

Atlantic Shareholder Services, LLC (the “Transfer Agent”), Three Canal Plaza, Ground Floor, Portland, Maine 04101, serves
as the Funds’ transfer agent.

 

THE CUSTODIAN

 

[____], [Address] (the “Custodian”), acts
as the custodian of the Funds. The Custodian holds cash, securities and other assets of the Funds as required by the 1940 Act.

 

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

[____], [Address], serves as the independent registered
public accounting firm for the Funds.

 

LEGAL COUNSEL

 

Morgan, Lewis & Bockius LLP, 1701 Market Street,
Philadelphia, Pennsylvania 19103-2921, serves as legal counsel to the Trust.

 

SECURITIES LENDING

 

Because the Funds are new, as of the date of this
SAI, the Funds have not engaged in securities lending activities.

 

TRUSTEES AND OFFICERS OF THE TRUST

 

Board Responsibilities. The management and
affairs of the Trust and its series, including the Funds described in this SAI, are overseen by the Trustees. The Board has approved contracts,
as described above, under which certain companies provide essential management services to the Trust.

 

Like most mutual funds, the day-to-day business of
the Trust, including the management of risk, is performed by third party service providers, such as the Adviser, the Sub-Adviser, the
Distributor and the Administrator. The Trustees are responsible for overseeing the Trust’s service providers and, thus, have oversight
responsibility with respect to risk management performed by those service providers. Risk management seeks to identify and address risks,
i.e., events or circumstances that could have material adverse effects on the business, operations, shareholder services, investment performance
or reputation of the funds. The funds and their service providers employ a variety of processes, procedures and controls to identify various
possible events or circumstances, to lessen the probability of their occurrence and/or to mitigate the effects of such events or circumstances
if they do occur. Each service provider is responsible for one or more discrete aspects of the Trust’s business (e.g., the Adviser
is responsible for the day-to-day management of each Fund’s portfolio investments) and, consequently, for managing the risks associated
with that business. The Board has emphasized to the Funds’ service providers the importance of maintaining vigorous risk management.

 

The Trustees’ role in risk oversight begins
before the inception of a fund, at which time certain of the fund’s service providers present the Board with information concerning
the investment objectives, strategies and risks of the fund as well as proposed investment limitations for the fund. Additionally, the
fund’s adviser provides the Board with an overview of, among other things, its investment philosophy, brokerage practices and compliance
infrastructure. Thereafter, the Board continues its oversight function as various personnel, including the Trust’s Chief Compliance
Officer, as well as personnel of the adviser and other service providers, such as the fund’s independent accountants, make periodic
reports to the Audit Committee or to the Board with respect to various aspects of risk management. The Board and the Audit Committee oversee
efforts by management and service providers to manage risks to which the funds may be exposed.

 

The Board is responsible for overseeing the nature,
extent and quality of the services provided to the funds by the adviser and receives information about those services at its regular meetings.
In addition, on an annual basis, in connection with its consideration of whether to renew the advisory agreement with the adviser, the
Board meets with the adviser to review such services. Among other things, the Board regularly considers the adviser’s adherence
to the funds’ investment restrictions and compliance with various fund policies and procedures and with applicable securities regulations.
The Board also reviews information about the funds’ investments, including, for example, reports on the adviser’s use of derivatives
in managing the funds, if any, as well as reports on the funds’ investments in other investment companies, if any.

 

The Trust’s Chief Compliance Officer reports
regularly to the Board to review and discuss compliance issues and fund and adviser risk assessments. At least annually, the Trust’s
Chief Compliance Officer provides the Board with a report reviewing the adequacy and effectiveness of the Trust’s policies and procedures
and those of its service providers, including the adviser. The report addresses the operation of the policies and procedures of the Trust
and each service provider since the date of the last report; any material changes to the policies and procedures since the date of the
last report; any recommendations for material changes to the policies and procedures; and any material compliance matters since the date
of the last report.

 

The Board receives reports from the funds’ service
providers regarding operational risks and risks related to the valuation and liquidity of portfolio securities. The Trust’s Fair
Value Pricing Committee makes regular reports to the Board concerning investments for which market quotations are not readily available.
Annually, the independent registered public accounting firm reviews with the Audit Committee its audit of the funds’ financial statements,
focusing on major areas of risk encountered by the funds and noting any significant deficiencies or material weaknesses in the funds’
internal controls. Additionally, in connection with its oversight function, the Board oversees fund management’s implementation
of disclosure controls and procedures, which are designed to ensure that information required to be disclosed by the Trust in its periodic
reports with the SEC are recorded, processed, summarized, and reported within the required time periods. The Board also oversees the Trust’s
internal controls over financial reporting, which comprise policies and procedures designed to provide reasonable assurance regarding
the reliability of the Trust’s financial reporting and the preparation of the Trust’s financial statements.

 

From their review of these reports and discussions
with the adviser, the Chief Compliance Officer, the independent registered public accounting firm and other service providers, the Board
and the Audit Committee learn in detail about the material risks of the funds, thereby facilitating a dialogue about how management and
service providers identify and mitigate those risks.

 

The Board recognizes that not all risks that may affect
the funds can be identified and/or quantified, that it may not be practical or cost-effective to eliminate or mitigate certain risks,
that it may be necessary to bear certain risks (such as investment-related risks) to achieve the funds’ goals, and that the processes,
procedures and controls employed to address certain risks may be limited in their effectiveness. Moreover, reports received by the Trustees
as to risk management matters are typically summaries of the relevant information. Most of the funds’ investment management and
business affairs are carried out by or through the funds’ advisers and other service providers, each of which has an independent
interest in risk management but whose policies and the methods by which one or more risk management functions are carried out may differ
from the funds’ and each other’s in the setting of priorities, the resources available or the effectiveness of relevant controls.
As a result of the foregoing and other factors, the Board’s ability to monitor and manage risk, as a practical matter, is subject
to limitations.

 

Members of the Board. There are six members
of the Board, five of whom are not interested persons of the Trust, as that term is defined in the 1940 Act (“independent Trustees”).
Mr. Doran, an interested person of the Trust, serves as Chairman of the Board. Mr. Hunt, an independent Trustee, serves as the lead independent
Trustee. The Trust has determined its leadership structure is appropriate given the specific characteristics and circumstances of the
Trust. The Trust made this determination in consideration of, among other things, the fact that the independent Trustees constitute more
than three-quarters of the Board, the fact that the chairperson of each Committee of the Board is an independent Trustee, the amount of
assets under management in the Trust, and the number of funds (and classes of shares) overseen by the Board. The Board also believes that
its leadership structure facilitates the orderly and efficient flow of information to the independent Trustees from fund management.

 

The Board has two standing committees: the Audit Committee
and the Governance Committee. The Audit Committee and the Governance Committee are chaired by an independent Trustee and composed of all
of the independent Trustees. In addition, the Board has a lead independent Trustee.

 

In his role as lead independent Trustee, Mr. Hunt,
among other things: (i) presides over Board meetings in the absence of the Chairman of the Board; (ii) presides over executive sessions
of the independent Trustees; (iii) along with the Chairman of the Board, oversees the development of agendas for Board meetings; (iv)
facilitates communication between the independent Trustees and management, and among the independent Trustees; (v) serves as a key point
person for dealings between the independent Trustees and management; and (vi) has such other responsibilities as the Board or independent
Trustees determine from time to time.

 

Set forth below are the names, years of birth, position
with the Trust and length of time served, and the principal occupations and other directorships held during at least the last five years
of each of the persons currently serving as a Trustee. There is no stated term of office for the Trustees. Nevertheless, an independent
Trustee must retire from the Board as of the end of the calendar year in which such independent Trustee first attains the age of seventy-five
years; provided, however, that, an independent Trustee may continue to serve for one or more additional one calendar year terms after
attaining the age of seventy-five years (each calendar year a “Waiver Term”) if, and only if, prior to the beginning of such
Waiver Term: (1) the Governance Committee (a) meets to review the performance of the independent Trustee; (b) finds that the continued
service of such independent Trustee is in the best interests of the Trust; and (c) unanimously approves excepting the independent Trustee
from the general retirement policy set out above; and (2) a majority of the Trustees approves excepting the independent Trustee from the
general retirement policy set out above. Unless otherwise noted, the business address of each Trustee is SEI Investments, One Freedom
Valley Drive, Oaks, Pennsylvania 19456.

 

Name and Year of Birth Position with Trust and Length of Time Served

Principal Occupations

in the Past 5 Years

Other Directorships Held in the Past 5 Years
Interested Trustee

William M. Doran

(Born: 1940)

Chairman of the Board of Trustees1

(since 2014)

Self-Employed Consultant since 2003. Partner at Morgan, Lewis & Bockius LLP (law firm) from 1976 to 2003. Counsel to the Trust, SEI Investments, SIMC, the Administrator and the Distributor. Secretary of SEI Investments since 1978.

Current Directorships: Trustee of Gallery Trust, Schroder Series Trust,
Schroder Global Series Trust, Delaware Wilshire Private Markets Master Fund, Delaware Wilshire Private Markets Fund, Delaware Wilshire
Private Markets Tender Fund, SEI Daily Income Trust, SEI Institutional International Trust, SEI Institutional Investments Trust, SEI Institutional
Managed Trust, SEI Asset Allocation Trust, SEI Tax Exempt Trust, Adviser Managed Trust, New Covenant Funds, SEI Insurance Products Trust
and SEI Catholic Values Trust. Director of SEI Investments, SEI Investments (Europe), Limited, SEI Investments—Global Funds Services,
Limited, SEI Investments Global, Limited, SEI Investments (Asia), Limited, SEI Global Nominee Ltd., SEI Investments – Unit Trust
Management (UK) Limited and SEI Investments Co. Director of the Distributor.

 

Former Directorships: Trustee of O’Connor EQUUS (closed-end investment
company) to 2016.

Trustee of SEI Liquid Asset Trust to 2016. Trustee of Winton Series Trust
to 2017. Trustee of The Advisors’ Inner Circle Fund, The Advisors’ Inner Circle Fund II, Bishop Street Funds, The KP Funds
and Winton Diversified Opportunities Fund (closed-end investment company) to 2018.

 

Name and Year of Birth Position with Trust and Length of Time Served

Principal Occupations

in the Past 5 Years

Other Directorships Held in the Past 5 Years
Independent Trustees

Jon C. Hunt

(Born: 1951)

Trustee and Lead Independent Trustee

(since 2014)

Retired since 2013. Consultant to Management, Convergent Capital Management, LLC (“CCM”) from 2012 to 2013. Managing Director and Chief Operating Officer, CCM from 1998 to 2012.

Current Directorships: Trustee of City National Rochdale Funds, Gallery
Trust, Schroder Series Trust, Schroder Global Series Trust, Delaware Wilshire Private Markets Master Fund, Delaware Wilshire Private Markets
Fund and Delaware Wilshire Private Markets Tender Fund. Director of Chiron Capital Allocation Fund Ltd.

 

Former Directorships: Trustee of O’Connor EQUUS (closed-end investment
company) to 2016. Member of Independent Committee of Nuveen Commodities Asset Management to 2016. Trustee of Winton Series Trust to 2017.
Trustee of Winton Diversified Opportunities Fund (closed-end investment company) to 2018.

Thomas P. Lemke

(Born: 1954)

Trustee

(since 2014)

Retired since 2013. Executive Vice President and General Counsel, Legg Mason, Inc. from 2005 to 2013.

Current Directorships: Trustee of Gallery Trust, Schroder Series Trust,
Schroder Global Series Trust, Delaware Wilshire Private Markets Master Fund, Delaware Wilshire Private Markets Fund, Delaware Wilshire
Private Markets Tender Fund, JP Morgan Active Exchange-Traded Funds (33 Portfolios) and Symmetry Panoramic Trust (8 Portfolios). Director
of Chiron Capital Allocation Fund Ltd.

 

Former Directorships: Trustee of Munder Funds to 2014. Trustee of Victory
Funds to 2015. Trustee of O’Connor EQUUS (closed-end investment company) to 2016.

Trustee of Winton Series Trust and AXA Premier VIP Trust to 2017. Trustee
of Winton Diversified Opportunities Fund (closed-end investment company) to 2018.

 

Name and Year of Birth Position with Trust and Length of Time Served

Principal Occupations

in the Past 5 Years

Other Directorships Held in the Past 5 Years

Nichelle Maynard-Elliott

(Born: 1968)

Trustee

(since 2021)

Independent Director since 2018. Executive Director, M&A at Praxair Inc. from 2011 to 2019. Current Directorships: Trustee of Gallery Trust, Schroder Series Trust, Schroder Global Series Trust, Delaware Wilshire Private Markets Master Fund, Delaware Wilshire Private Markets Fund, Delaware Wilshire Private Markets Tender Fund. Director of Chiron Capital Allocation Fund Ltd. Director of Element Solutions Inc., Director of Xerox Holdings Corporation, and Director Nominee for Lucid Group, Inc.

Jay C. Nadel

(Born: 1958)

Trustee

(since 2016)

Self-Employed Consultant since 2004. Executive Vice President, Bank of New York Broker Dealer from 2002 to 2004. Partner/Managing Director, Weiss Peck & Greer/Robeco from 1986 to 2001.

Current Directorships: Chairman of the Board of Trustees of City National
Rochdale Funds. Trustee of Gallery Trust, Schroder Series Trust, Schroder Global Series Trust, Delaware Wilshire Private Markets Master
Fund, Delaware Wilshire Private Markets Fund and Delaware Wilshire Private Markets Tender Fund. Director of Chiron Capital Allocation
Fund Ltd.

 

Former Directorships: Trustee of Winton Series Trust to 2017. Director
of Lapolla Industries, Inc. to 2017. Trustee of Winton Diversified Opportunities Fund (closed-end investment company) to 2018.

 

Name and Year of Birth Position with Trust and Length of Time Served

Principal Occupations

in the Past 5 Years

Other Directorships Held in the Past 5 Years

Randall S. Yanker

(Born: 1960)

Trustee

(since 2014)

Co-Founder and Senior Partner, Alternative Asset Managers, L.P. since 2004.

Current Directorships: Trustee of Gallery Trust, Schroder Series Trust,
Schroder Global Series Trust, Delaware Wilshire Private Markets Master Fund, Delaware Wilshire Private Markets Fund and Delaware Wilshire
Private Markets Tender Fund. Independent Non-Executive Director of HFA Holdings Limited. Director of Chiron Capital Allocation Fund Ltd.

 

Former Directorships: Trustee of O’Connor EQUUS (closed-end investment
company) to 2016. Trustee of Winton Series Trust to 2017. Trustee of Winton Diversified Opportunities Fund (closed-end investment company)
to 2018.

 

1 Mr. Doran may be deemed to be an “interested” person of the Funds as that term is defined in the 1940 Act by virtue of
his affiliation with the Distributor and/or its affiliates.

 

Individual Trustee Qualifications

 

The Trust has concluded that each of the Trustees
should serve on the Board because of their ability to review and understand information about the Funds provided to them by management,
to identify and request other information they may deem relevant to the performance of their duties, to question management and other
service providers regarding material factors bearing on the management and administration of the Funds, and to exercise their business
judgment in a manner that serves the best interests of the Funds’ shareholders. The Trust has concluded that each of the Trustees
should serve as a Trustee based on their own experience, qualifications, attributes and skills as described below.

 

The Trust has concluded that Mr. Doran should serve
as Trustee because of the experience he gained serving as a Partner in the Investment Management and Securities Industry Practice of a
large law firm, his experience in and knowledge of the financial services industry, and the experience he has gained serving on other
mutual fund boards.

 

The Trust has concluded that Mr. Hunt should serve
as Trustee because of the experience he gained in a variety of leadership roles with different investment management institutions, his
experience in and knowledge of the financial services industry, and the experience he has gained as a board member of open-end, closed-end
and private funds investing in a broad range of asset classes, including alternative asset classes.

 

The Trust has concluded that Mr. Lemke should serve
as Trustee because of the extensive experience he gained in the financial services industry, including experience in various senior management
positions with financial services firms and multiple years of service with a regulatory agency, his background in controls, including
legal, compliance and risk management, and his service as general counsel for several financial services firms.

 

The Trust has concluded that Ms. Maynard-Elliott should
serve as Trustee because of the experience she gained in a variety of leadership roles at a leading industrial company, the experience
she has gained as a board member of several prominent companies, and her legal and financial management expertise.

 

The Trust has concluded that Mr. Nadel should serve
as Trustee because of the experience he gained in a variety of leadership roles with an audit firm and various financial services firms,
his experience in and knowledge of the financial services industry, and the experience he has gained serving on other mutual fund and
operating company boards.

 

The Trust has concluded that Mr. Yanker should serve
as Trustee because of the experience he gained in a variety of leadership roles with the alternative asset management divisions of various
financial services firms, his experience in and knowledge of the financial services industry, and the experience he has gained advising
institutions on alternative asset management.

 

In its periodic assessment of the effectiveness of
the Board, the Board considers the complementary individual skills and experience of the individual Trustees primarily in the broader
context of the Board’s overall composition so that the Board, as a body, possesses the appropriate (and appropriately diverse) skills
and experience to oversee the business of the funds.

 

Board Committees. The Board has established
the following standing committees:

 

Audit Committee. The Board has a standing Audit Committee that is composed of each of the independent
Trustees. The Audit Committee operates under a written charter approved by the Board. The principal responsibilities of the Audit Committee
include: (i) recommending which firm to engage as each fund’s independent registered public accounting firm and whether to terminate
this relationship; (ii) reviewing the independent registered public accounting firm’s compensation, the proposed scope and terms
of its engagement, and the firm’s independence; (iii) pre-approving audit and non-audit services provided by each fund’s independent
registered public accounting firm to the Trust and certain other affiliated entities; (iv) serving as a channel of communication between
the independent registered public accounting firm and the Trustees; (v) reviewing the results of each external audit, including any qualifications
in the independent registered public accounting firm’s opinion, any related management letter, management’s responses to recommendations
made by the independent registered public accounting firm in connection with the audit, reports submitted to the Committee by the internal
auditing department of the Administrator that are material to the Trust as a whole, if any, and management’s responses to any such
reports; (vi) reviewing each fund’s audited financial statements and considering any significant disputes between the Trust’s
management and the independent registered public accounting firm that arose in connection with the preparation of those financial statements;
(vii) considering, in consultation with the independent registered public accounting firm and the Trust’s senior internal accounting
executive, if any, the independent registered public accounting firms’ reports on the adequacy of the Trust’s internal financial
controls; (viii) reviewing, in consultation with each fund’s independent registered public accounting firm, major changes regarding
auditing and accounting principles and practices to be followed when preparing each fund’s financial statements; and (ix) other
audit related matters. Ms. Maynard-Elliott and Messrs. Hunt, Lemke, Nadel and Yanker currently serve as members of the Audit Committee.
Mr. Nadel serves as the Chairman of the Audit Committee. The Audit Committee meets periodically, as necessary, and met five (5) times
during the most recently completed fiscal year.

 

Governance Committee. The Board has a standing Governance Committee that is composed of each of
the independent Trustees. The Governance Committee operates under a written charter approved by the Board. The principal responsibilities
of the Governance Committee include: (i) considering and reviewing Board governance and compensation issues; (ii) conducting a self-assessment
of the Board’s operations; (iii) selecting and nominating all persons to serve as independent Trustees and considering proposals
of and making recommendations for “interested” Trustee candidates to the Board; and (iv) reviewing shareholder recommendations
for nominations to fill vacancies on the Board if such recommendations are submitted in writing and addressed to the Committee at the
Trust’s office. Ms. Maynard-Elliott and Messrs. Hunt, Lemke, Nadel and Yanker currently serve as members of the Audit Committee.
Mr. Lemke serves as the Chairman of the Governance Committee. The Governance Committee meets periodically, as necessary, and met two (2)
times during the most recently completed fiscal year.

 

Fair Value Pricing Committee. The Board has
also established a standing Fair Value Pricing Committee that is composed of various representatives of the Trust’s service providers,
as appointed by the Board. The Fair Value Pricing Committee operates under procedures approved by the Board. The principal responsibility
of the Fair Value Pricing Committee is to determine the fair value of securities for which current market quotations are not readily available.
The Fair Value Pricing Committee’s determinations are reviewed by the Board.

 

Fund Shares Owned by Board Members. The following
table shows the dollar amount range of each Trustee’s “beneficial ownership” of shares of each of the Funds as of the
end of the most recently completed calendar year. Dollar amount ranges disclosed are established by the SEC. “Beneficial ownership”
is determined in accordance with Rule 16a-1(a)(2) under the 1934 Act. The Trustees and officers of the Trust own less than 1% of the outstanding
shares of the Trust.

 

Name

Dollar Range of Fund Shares

(Fund)1

Aggregate Dollar Range of Shares

(All Funds in the Family of Investment Companies)1,2

Interested Trustee
William M. Doran None None
Independent Trustees
Jon C. Hunt None None
Thomas P. Lemke None None
Nichelle Maynard-Elliott3 None None
Jay C. Nadel None None
Randall S. Yanker None None

 

1 Valuation date is December 31, 2020.
2 The Funds are the only funds in the family of investment companies.
3 Joined the Board on June 23, 2021.

 

Board Compensation. The Trust paid the following
fees to the Trustees during the fiscal year ended October 31, 2021.

 

Name Aggregate Compensation from the Trust Pension or Retirement Benefits Accrued as Part of Fund Expenses

Estimated

Annual Benefits Upon Retirement

Total Compensation from the Trust and Fund Complex1
Interested Trustee
William M. Doran $0 N/A N/A $0 for service on one (1) board
Independent Trustees
Jon C. Hunt $[____] N/A N/A $[____] for service on one (1) board
Thomas P. Lemke $[____] N/A N/A $[____] for service on one (1) board
Nichelle Maynard-Elliott2 $[____] N/A N/A $[____] for service on one (1) board
Jay C. Nadel $[____] N/A N/A $[____] for service on one (1) board
Randall S. Yanker $[____] N/A N/A $[____] for service on one (1) board

 

1 All funds in the Fund Complex are series of the Trust.
2 Joined the Board on June 23, 2021.

 

Trust Officers. Set forth below are the names,
years of birth, position with the Trust and length of time served, and the principal occupations for the last five years of each of the
persons currently serving as executive officers of the Trust. There is no stated term of office for the officers of the Trust. Unless
otherwise noted, the business address of each officer is SEI Investments, One Freedom Valley Drive, Oaks, Pennsylvania 19456. The Chief
Compliance Officer is the only officer who receives compensation from the Trust for his services.

 

Certain officers of the Trust also serve as officers
of one or more mutual funds for which SEI Investments or its affiliates act as investment manager, administrator or distributor.

 

Name and Year of Birth Position with Trust and Length of Time Served Principal Occupations in Past 5 Years

Michael Beattie

(Born: 1965)

President

(since 2014)

Director of Client Service, SEI Investments, since 2004.

James Bernstein

(Born: 1962)

Vice President

(since 2017)

 

Secretary

(since 2020)

Attorney, SEI Investments, since 2017.

 

Prior Positions: Self-employed consultant, 2017. Associate General Counsel
& Vice President, Nationwide Funds Group and Nationwide Mutual Insurance Company, from 2002 to 2016. Assistant General Counsel &
Vice President, Market Street Funds and Provident Mutual Insurance Company, from 1999 to 2002.

John Bourgeois

(Born: 1973)

Assistant Treasurer

(since 2017)

Fund Accounting Manager, SEI Investments, since 2000.

 

Name and Year of Birth Position with Trust and Length of Time Served Principal Occupations in Past 5 Years

Russell Emery

(Born: 1962)

Chief Compliance Officer

(since 2014)

Chief Compliance Officer of SEI Structured Credit Fund, LP since 2007. Chief Compliance Officer of The Advisors’ Inner Circle Fund, The Advisors’ Inner Circle Fund II, Bishop Street Funds, The KP Funds, Frost Family of Funds, The Advisors’ Inner Circle Fund III, Gallery Trust, Schroder Series Trust, Schroder Global Series Trust, Delaware Wilshire Private Markets Master Fund, Delaware Wilshire Private Markets Fund, Delaware Wilshire Private Markets Tender Fund, SEI Institutional Managed Trust, SEI Asset Allocation Trust, SEI Institutional International Trust, SEI Institutional Investments Trust, SEI Daily Income Trust, SEI Tax Exempt Trust, Adviser Managed Trust, New Covenant Funds, SEI Insurance Products Trust and SEI Catholic Values Trust. Chief Compliance Officer of O’Connor EQUUS (closed-end investment company) to 2016. Chief Compliance Officer of SEI Liquid Asset Trust to 2016. Chief Compliance Officer of Winton Series Trust to 2017. Chief Compliance Officer of Winton Diversified Opportunities Fund (closed-end investment company) to 2018.

Eric C. Griffith

(Born: 1969)

Vice President and Assistant Secretary

(since 2020)

Counsel at SEI Investments since 2019. Vice President and Assistant General Counsel, JPMorgan Chase & Co., from 2012 to 2018.

Matthew M. Maher

(Born: 1975)

Vice President and Assistant Secretary

(since 2018)

Counsel at SEI Investments since 2018. Attorney, Blank Rome LLP, from 2015 to 2018. Assistant Counsel & Vice President, Bank of New York Mellon, from 2013 to 2014. Attorney, Dilworth Paxson LLP, from 2006 to 2013.

Andrew Metzger

(Born: 1980)

 

Treasurer, Controller and Chief Financial Officer

(since 2021)

 

Director of Fund Accounting, SEI Investments, since 2020. Senior Director, Embark, from 2019 to 2020. Senior Manager, PricewaterhouseCoopers LLP, from 2002 to 2019.

Robert Morrow

(Born: 1968)

Vice President

(since 2017)

Account Manager, SEI Investments, since 2007.

Alexander F. Smith

(Born: 1977)

Vice President and Assistant Secretary

(since 2020)

Counsel at SEI Investments since 2020. Associate Counsel & Manager, Vanguard, 2012 to 2020. Attorney, Stradley Ronon Stevens & Young, LLP, 2008 to 2012.

Bridget E. Sudall

(Born: 1980)

Privacy Officer

(since 2015)

 

Anti-Money Laundering Officer

(since 2015)

Senior Associate and AML Officer, Morgan Stanley Alternative Investment Partners, from 2011 to 2015. Investor Services Team Lead, Morgan Stanley Alternative Investment Partners, from 2007 to 2011.

 

PURCHASING AND REDEEMING SHARES

 

Shares of the Funds are offered and redeemed on a
continuous basis. Purchases and redemptions may be made through the Transfer Agent on any day the New York Stock Exchange (the “NYSE”)
is open for business. Currently, the NYSE is closed for business when the following holidays are observed: New Year’s Day, Martin
Luther King Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.

 

It is currently the Trust’s policy to pay all
redemptions in cash. The Trust retains the right, however, to alter this policy to provide for redemptions in whole or in part by a distribution
in-kind of securities held by the Funds in lieu of cash. Shareholders may incur brokerage charges on the sale of any such securities so
received in payment of redemptions.

 

The Trust reserves the right to suspend the right
of redemption and/or to postpone the date of payment upon redemption for more than seven days during times when the NYSE is closed, other
than during customary weekends or holidays, for any period on which trading on the NYSE is restricted (as determined by the SEC by rule
or regulation), or during the existence of an emergency (as determined by the SEC by rule or regulation) as a result of which the disposal
or valuation of the Funds’ securities is not reasonably practicable, or for such other periods as the SEC has by order permitted.
The Trust also reserves the right to suspend sales of shares of the Funds for any period during which the NYSE, the Adviser, the Sub-Adviser,
the Administrator, the Transfer Agent and/or the Custodian are not open for business.

 

DETERMINATION OF NET ASSET VALUE

 

General Policy. The Funds adhere to Section
2(a)(41), and Rule 2a-4 thereunder, of the 1940 Act with respect to the valuation of portfolio securities. In general, securities for
which market quotations are readily available are valued at current market value, and all other securities are valued at fair value in
accordance with procedures adopted by the Board. In complying with the 1940 Act, the Trust relies on guidance provided by the SEC and
by the SEC staff in various interpretive letters and other guidance.

 

Equity Securities. Securities listed on a securities
exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ), including
securities traded over the counter, are valued at the last quoted sale price on an exchange or market (foreign or domestic) on which they
are traded on the valuation date (or at approximately 4:00 p.m. Eastern Time if such exchange is normally open at that time), or, if there
is no such reported sale on the valuation date, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official
Closing Price will be used. If such prices are not available or determined to not represent the fair value of the security as of the Funds’
pricing time, the security will be valued at fair value as determined in good faith using methods approved by the Board.

 

Money Market Securities and other Debt Securities.
If available, money market securities and other debt securities are priced based upon valuations provided by recognized independent,
third-party pricing agents. Such values generally reflect the last reported sales price if the security is actively traded. The third-party
pricing agents may also value debt securities by employing methodologies that utilize actual market transactions, broker-supplied valuations,
or other methodologies designed to identify the market value for such securities. Such methodologies generally consider such factors as
security prices, yields, maturities, call features, ratings and developments relating to specific securities in arriving at valuations.
Money market securities and other debt securities with remaining maturities of sixty days or less may be valued at their amortized cost,
which approximates market value. If such prices are not available or determined to not represent the fair value of the security as of
each Fund’s pricing time, the security will be valued at fair value as determined in good faith using methods approved by the Board.

 

Foreign Securities. The prices for foreign
securities are reported in local currency and converted to U.S. dollars using currency exchange rates. Exchange rates are provided daily
by recognized independent pricing agents.

 

Derivatives and Other Complex Securities. Exchange
traded options on securities and indices purchased by the Funds generally are valued at their last trade price or, if there is no last
trade price, the last bid price. Exchange traded options on securities and indices written by the Funds generally are valued at their
last trade price or, if there is no last trade price, the last asked price. In the case of options traded in the over-the-counter market,
if the OTC option is also an exchange traded option, the Funds will follow the rules regarding the valuation of exchange traded options.
If the OTC option is not also an exchange traded option, the Funds will value the option at fair value in accordance with procedures adopted
by the Board.

 

Futures and swaps cleared through a central clearing
house (“centrally cleared swaps”) are valued at the settlement price established each day by the board of the exchange on
which they are traded. The daily settlement prices for financial futures are provided by an independent source. On days when there is
excessive volume or market volatility, or the future or centrally cleared swap does not end trading by the time the Funds calculate net
asset value, the settlement price may not be available at the time at which each Fund calculates its net asset value. On such days, the
best available price (which is typically the last sales price) may be used to value a Fund’s futures or centrally cleared swaps
position.

 

Foreign currency forward contracts are valued at the
current day’s interpolated foreign exchange rate, as calculated using the current day’s spot rate, and the thirty, sixty,
ninety and one-hundred eighty day forward rates provided by an independent source.

 

If available, non-centrally cleared swaps, collateralized
debt obligations, collateralized loan obligations and bank loans are priced based on valuations provided by an independent third party
pricing agent. If a price is not available from an independent third party pricing agent, the security will be valued at fair value as
determined in good faith using methods approved by the Board.

 

Use of Third-Party Independent Pricing Agents and
Independent Brokers.
Pursuant to contracts with the Administrator, prices for most securities held by the Funds are provided daily
by third-party independent pricing agents that are approved by the Board. The valuations provided by third-party independent pricing agents
are reviewed daily by the Administrator.

 

If a security price cannot be obtained from an independent,
third-party pricing agent, the Administrator shall seek to obtain a bid price from at least one independent broker.

 

Fair Value Procedures. Securities for which
market prices are not “readily available” or which cannot be valued using the methodologies described above are valued in
accordance with Fair Value Procedures established by the Board and implemented through the Fair Value Pricing Committee. The members of
the Fair Value Pricing Committee report, as necessary, to the Board regarding portfolio valuation determinations. The Board, from time
to time, will review these methods of valuation and will recommend changes which may be necessary to assure that the investments of the
Funds are valued at fair value.

 

Some of the more common reasons that may necessitate
a security being valued using Fair Value Procedures include: the security’s trading has been halted or suspended; the security has
been de-listed from a national exchange; the security’s primary trading market is temporarily closed at a time when under normal
conditions it would be open; the security has not been traded for an extended period of time; the security’s primary pricing source
is not able or willing to provide a price; trading of the security is subject to local government-imposed restrictions; or a significant
event with respect to a security has occurred after the close of the market or exchange on which the security principally trades and before
the time the Funds calculate net asset value. When a security is valued in accordance with the Fair Value Procedures, the Fair Value Pricing
Committee will determine the value after taking into consideration relevant information reasonably available to the Fair Value Pricing
Committee.

 

Fair Valuation of Foreign Securities Based on U.S.
Market Movements.
A third party fair valuation vendor provides a fair value for foreign securities held by the Funds based on certain
factors and methodologies (involving, generally, tracking valuation correlations between the U.S. market and each foreign security) applied
by the fair valuation vendor in the event that there are movements in the U.S. market that exceed a specific threshold that has been established
by the Fair Value Pricing Committee. The Fair Value Pricing Committee has also established a “confidence interval” that is
used to determine the level of correlation between the value of a foreign security and movements in the U.S. market that is required for
a particular security to be fair valued when the threshold is exceeded. In the event that the threshold established by the Fair Value
Pricing Committee is exceeded on a specific day, a Fund values the foreign securities in its portfolio that exceed the applicable “confidence
interval” based upon the fair values provided by the fair valuation vendor. In such event, it is not necessary to hold a Fair Value
Pricing Committee meeting. In the event that the Adviser believes that the fair values provided by the fair valuation vendor are not reliable,
the Adviser can contact the Administrator and request that a meeting of the Fair Value Pricing Committee be held.

 

[TAXES]

 

The following is only a summary of certain additional
U.S. federal income tax considerations generally affecting the Funds and their shareholders that is intended to supplement the discussion
contained in the Prospectus. No attempt is made to present a detailed explanation of the tax treatment of the Funds or their shareholders,
and the discussion here and in the Prospectus is not intended as a substitute for careful tax planning. Shareholders are urged to consult
their tax advisors with specific reference to their own tax situations, including their state, local, and foreign tax liabilities.

 

The following general discussion of certain federal
income tax consequences is based on the Code and the regulations issued thereunder as in effect on the date of this SAI. New legislation,
as well as administrative changes or court decisions, may significantly change the conclusions expressed herein, and may have a retroactive
effect with respect to the transactions contemplated herein.

 

Qualification as a Regulated Investment Company.
Each Fund has elected and intends to qualify each year to be treated as a RIC. By following such a policy, each Fund expects to eliminate
or reduce to a nominal amount the federal taxes to which it may be subject. If a Fund qualifies as a RIC, it will generally not be subject
to federal income taxes on the net investment income and net realized capital gains that it timely distributes to its shareholders. The
Board reserves the right not to maintain the qualification of a Fund as a RIC if it determines such course of action to be beneficial
to shareholders.

 

In order to qualify as a RIC under the Code, each
Fund must distribute annually to its shareholders at least 90% of its net investment income (which, includes dividends, taxable interest,
and the excess of net short-term capital gains over net long-term capital losses, less operating expenses) and at least 90% of its net
tax exempt interest income, for each tax year, if any (the “Distribution Requirement”) and also must meet certain additional
requirements. Among these requirements are the following: (i) at least 90% of each Fund’s gross income each taxable year must be
derived from dividends, interest, payments with respect to certain securities loans, and gains from the sale or other disposition of stock,
securities, or foreign currencies, or other income (including but not limited to gains from options, futures or forward contracts) derived
with respect to its business of investing in such stock, securities, or currencies, and net income derived from an interest in a qualified
publicly traded partnership (the “Qualifying Income Test”); and (ii) at the close of each quarter of each Fund’s taxable
year: (A) at least 50% of the value of each Fund’s total assets must be represented by cash and cash items, U.S. government securities,
securities of other RICs and other securities, with such other securities limited, in respect to any one issuer, to an amount not greater
than 5% of the value of each Fund’s total assets and that does not represent more than 10% of the outstanding voting securities
of such issuer, including the equity securities of a qualified publicly traded partnership, and (B) not more than 25% of the value of
each Fund’s total assets is invested, including through corporations in which the Fund owns a 20% or more voting stock interest,
in the securities (other than U.S. government securities or securities of other RICs) of any one issuer or the securities (other than
the securities of another RIC) of two or more issuers that a Fund controls and which are engaged in the same or similar trades or businesses
or related trades or businesses, or the securities of one or more qualified publicly traded partnerships (the “Asset Test”).

 

Although each Fund intends to distribute substantially
all of its net investment income and may distribute its capital gains for any taxable year, each Fund will be subject to federal income
taxation to the extent any such income or gains are not distributed. Each Fund is treated as a separate corporation for federal income
tax purposes. A Fund therefore is considered to be a separate entity in determining its treatment under the rules for RICs described herein.
Losses in one Fund do not offset gains in another and the requirements (other than certain organizational requirements) for qualifying
RIC status are determined at the Fund level rather than at the Trust level.

 

If a Fund fails to satisfy the Qualifying Income or
Asset Tests in any taxable year, such Fund may be eligible for relief provisions if the failures are due to reasonable cause and not willful
neglect and if a penalty tax is paid with respect to each failure to satisfy the applicable requirements. Additionally, relief is provided
for certain de minimis failures of the diversification requirements where the Fund corrects the failure within a specified period.
If a Fund fails to maintain qualification as a RIC for a tax year, and the relief provisions are not available, such Fund will be subject
to federal income tax at the regular corporate rate (currently 21%) without any deduction for distributions to shareholders. In such case,
its shareholders would be taxed as if they received ordinary dividends, although corporate shareholders could be eligible for the dividends
received deduction (subject to certain limitations) and individuals may be able to benefit from the lower tax rates available to qualified
dividend income. In addition, a Fund could be required to recognize unrealized gains, pay substantial taxes and interest, and make substantial
distributions before requalifying as a RIC.

 

A Fund may elect to treat part or all of any “qualified
late year loss” as if it had been incurred in the succeeding taxable year in determining the Fund’s taxable income, net capital
gain, net short-term capital gain, and earnings and profits. The effect of this election is to treat any such “qualified late year
loss” as if it had been incurred in the succeeding taxable year in characterizing Fund distributions for any calendar year. A “qualified
late year loss” generally includes net capital loss, net long-term capital loss, or net short-term capital loss incurred after October
31 of the current taxable year (commonly referred to as “post-October losses”) and certain other late-year losses.

 

The treatment of capital loss carryovers for the Funds
is similar to the rules that apply to capital loss carryovers of individuals, which provide that such losses are carried over indefinitely.
If a Fund has a “net capital loss” (that is, capital losses in excess of capital gains), the excess of the Fund’s net
short-term capital losses over its net long-term capital gains is treated as a short-term capital loss arising on the first day of the
Fund’s next taxable year, and the excess (if any) of the Fund’s net long-term capital losses over its net short-term capital
gains is treated as a long-term capital loss arising on the first day of the Fund’s next taxable year. The carryover of capital
losses may be limited under the general loss limitation rules if a Fund experiences an ownership change as defined in the Code.

 

Federal Excise Tax. Notwithstanding the Distribution
Requirement described above, which generally requires a Fund to distribute at least 90% of its annual investment company taxable income
and the excess of its exempt interest income (but does not require any minimum distribution of net capital gain), a Fund will be subject
to a nondeductible 4% federal excise tax to the extent it fails to distribute, by the end of the calendar year at least 98% of its ordinary
income and 98.2% of its capital gain net income (the excess of short- and long-term capital gains over short- and long-term capital losses)
for the one-year period ending on October 31 of such year (including any retained amount from the prior calendar year on which a Fund
paid no federal income tax). The Funds intend to make sufficient distributions to avoid liability for federal excise tax, but can make
no assurances that such tax will be completely eliminated. The Funds may in certain circumstances be required to liquidate Fund investments
in order to make sufficient distributions to avoid federal excise tax liability at a time when the Adviser might not otherwise have chosen
to do so, and liquidation of investments in such circumstances may affect the ability of the Funds to satisfy the requirement for qualification
as RICs.

 

Distributions to Shareholders. The Funds receive
income generally in the form of dividends and interest on investments. This income, plus net short-term capital gains, if any, less expenses
incurred in the operation of a Fund, constitutes the Fund’s net investment income from which dividends may be paid to you. Any distributions
by a Fund from such income will be taxable to you as ordinary income or at the lower capital gains rates that apply to individuals receiving
qualified dividend income, whether you take them in cash or in additional shares.

 

Distributions by the Funds are currently eligible
for the reduced maximum tax rate to individuals of 20% (lower rates apply to individuals in lower tax brackets) to the extent that the
Funds receive qualified dividend income on the securities they hold and the Funds report the distributions as qualified dividend income.
Qualified dividend income is, in general, dividend income from taxable domestic corporations and certain foreign corporations (e.g., foreign
corporations incorporated in a possession of the United States or in certain countries with a comprehensive tax treaty with the United
States, or the stock of which is readily tradable on an established securities market in the United States). A dividend will not be treated
as qualified dividend income to the extent that: (i) the shareholder has not held the shares on which the dividend was paid for more than
60 days during the 121-day period that begins on the date that is 60 days before the date on which the shares become “ex-dividend”
(which is the day on which declared distributions (dividends or capital gains) are deducted from each Fund’s assets before it calculates
the net asset value) with respect to such dividend, (ii) each Fund has not satisfied similar holding period requirements with respect
to the securities it holds that paid the dividends distributed to the shareholder, (iii) the shareholder is under an obligation (whether
pursuant to a short sale or otherwise) to make related payments with respect to substantially similar or related property, or (iv) the
shareholder elects to treat such dividend as investment income under section 163(d)(4)(B) of the Code. Therefore, if you lend your shares
in a Fund, such as pursuant to a securities lending arrangement, you may lose the ability to treat dividends (paid while the shares are
held by the borrower) as qualified dividend income. Distributions that a Fund receives from an ETF, an underlying fund taxable as a RIC
or from a REIT will be treated as qualified dividend income only to the extent so reported by such ETF, underlying fund or REIT. The Funds’
investment strategies may limit their ability to make distributions eligible for the lower tax rates applicable to qualified dividend
income.

 

Distributions by the Funds of their net short-term
capital gains will be taxable as ordinary income. Capital gain distributions consisting of a Fund’s net capital gains will be taxable
as long-term capital gains for individual shareholders currently set at a maximum rate of 20% regardless of how long you have held your
shares in such Fund. Distributions from capital gains are generally made after applying any available capital loss carryforwards.

 

In the case of corporate shareholders, Fund distributions
(other than capital gain distributions) generally qualify for the dividends received deduction to the extent such distributions are so
reported and do not exceed the gross amount of qualifying dividends received by a Fund for the year. Generally, and subject to certain
limitations (including certain holding period limitations), a dividend will be treated as a qualifying dividend if it has been received
from a domestic corporation. The Funds’ investment strategies may limit their ability to make distributions eligible for the dividends
received deduction for corporate shareholders.

 

To the extent that a Fund makes a distribution of
income received by such Fund in lieu of dividends (a “substitute payment”) with respect to securities on loan pursuant to
a securities lending transaction, such income will not constitute qualified dividend income to individual shareholders and will not be
eligible for the dividends received deduction for corporate shareholders.

 

If a Fund’s distributions exceed its taxable
income and capital gains realized during a taxable year, all or a portion of the distributions made in the same taxable year may be recharacterized
as a return of capital to shareholders. A return of capital distribution will generally not be taxable, but will reduce each shareholder’s
cost basis in a Fund and result in a higher reported capital gain or lower reported capital loss when those shares on which the distribution
was received are sold.

 

A dividend or distribution received shortly after
the purchase of shares reduces the net asset value of the shares by the amount of the dividend or distribution and, although in effect
a return of capital, will be taxable to the shareholder. If the net asset value of shares were reduced below the shareholder’s cost
by dividends or distributions representing gains realized on sales of securities, such dividends or distributions would be a return of
investment though taxable to the shareholder in the same manner as other dividends or distributions.

 

The Funds (or their administrative agent) will inform
you of the amount of your ordinary income dividends, qualified dividend income and capital gain distributions, if any, and will advise
you of their tax status for federal income tax purposes shortly after the close of each calendar year. If you have not held Fund shares
for a full year, the Funds may designate and distribute to you, as ordinary income, qualified dividend income or capital gain, a percentage
of income that is not equal to the actual amount of such income earned during the period of your investment in the Funds.

 

Dividends declared to shareholders of record in October,
November or December and actually paid in January of the following year will be treated as having been received by shareholders on December
31 of the calendar year in which declared. Under this rule, therefore, a shareholder may be taxed in one year on dividends or distributions
actually received in January of the following year.

 

Sales, Exchanges or Redemptions. Any gain or
loss recognized on a sale, exchange or redemption of shares of a Fund by a shareholder who is not a dealer in securities will generally,
for individual shareholders, be treated as a long-term capital gain or loss if the shares have been held for more than twelve months and
otherwise will be treated as a short-term capital gain or loss. However, if shares on which a shareholder has received a long-term capital
gain distribution are subsequently sold, exchanged or redeemed and such shares have been held for six months or less, any loss recognized
will be treated as a long-term capital loss to the extent of the long-term capital gain distribution. In addition, the loss realized on
a sale or other disposition of shares will be disallowed to the extent a shareholder repurchases (or enters into a contract to or option
to repurchase) shares within a period of 61 days (beginning 30 days before and ending 30 days after the disposition of the shares). This
loss disallowance rule will apply to shares received through the reinvestment of dividends during the 61-day period. For tax purposes,
an exchange of your Fund shares for shares of a different fund is the same as a sale.

 

U.S. individuals with income exceeding $200,000 ($250,000
if married and filing jointly) are subject to a 3.8% tax on their “net investment income,” including interest, dividends,
and capital gains (including any capital gains realized on the sale or exchange of shares of a Fund).

 

The Funds (or their administrative agent) must report
to the Internal Revenue Service (“IRS”) and furnish to Fund shareholders the cost basis information for purchases of Fund
shares. In addition to the requirement to report the gross proceeds from the sale of Fund shares, a Fund is also required to report the
cost basis information for such shares and indicate whether these shares had a short-term or long-term holding period. For each sale of
Fund shares, a Fund will permit shareholders to elect from among several IRS-accepted cost basis methods, including the average cost basis
method. In the absence of an election, a Fund will use the average cost basis method as its default cost basis method. The cost basis
method elected by a Fund shareholder (or the cost basis method applied by default) for each sale of Fund shares may not be changed after
the settlement date of each such sale of Fund shares. Fund shareholders should consult their tax advisors to determine the best IRS-accepted
cost basis method for their tax situation and to obtain more information about how cost basis reporting applies to them. Shareholders
also should carefully review the cost basis information provided to them by the Funds and make any additional basis, holding period or
other adjustments that are required when reporting these amounts on their federal income tax returns.

 

Tax Treatment of Complex Securities. The Funds
may invest in complex securities and these investments may be subject to numerous special and complex tax rules. These rules could affect
a Fund’s ability to qualify as a RIC, affect whether gains and losses recognized by the Funds are treated as ordinary income or
capital gain, accelerate the recognition of income to the Funds and/or defer the Funds’ ability to recognize losses, and, in limited
cases, subject the Funds to U.S. federal income tax on income from certain of their foreign securities. In turn, these rules may affect
the amount, timing or character of the income distributed to you by the Funds and may require the Funds to sell securities to mitigate
the effect of these rules and prevent disqualification of a Fund as a RIC at a time when the Adviser might not otherwise have chosen to
do so.

 

Each Fund is required for federal income tax purposes
to mark-to-market and recognize as income for each taxable year its net unrealized gains and losses on certain futures and options contracts
subject to section 1256 of the Code (“Section 1256 Contracts”) as of the end of the year as well as those actually realized
during the year. Gain or loss from Section 1256 Contracts on broad-based indexes required to be marked to market will be 60% long-term
and 40% short-term capital gain or loss. Application of this rule may alter the timing and character of distributions to shareholders.
A Fund may be required to defer the recognition of losses on Section 1256 Contracts to the extent of any unrecognized gains on offsetting
positions held by the Fund. These provisions may also require a Fund to mark-to-market certain types of positions in its portfolio (i.e.,
treat them as if they were closed out), which may cause the Fund to recognize income without receiving cash with which to make distributions
in amounts necessary to satisfy the Distribution Requirement and for avoiding the excise tax discussed above. Accordingly, in order to
avoid certain income and excise taxes, a Fund may be required to liquidate its investments at a time when the Adviser might not otherwise
have chosen to do so.

 

In general, for purposes of the Qualifying Income
Test described above, income derived from a partnership will be treated as qualifying income only to the extent such income is attributable
to items of income of the partnership that would be qualifying income if realized directly by a Fund. However, 100% of the net income
derived from an interest in a “qualified publicly traded partnership” (generally, a partnership (i) interests in which are
traded on an established securities market or are readily tradable on a secondary market or the substantial equivalent thereof, (ii) that
derives at least 90% of its income from the passive income sources specified in Code section 7704(d), and (iii) that generally derives
less than 90% of its income from the same sources as described in the Qualifying Income Test) will be treated as qualifying income. In
addition, although in general the passive loss rules of the Code do not apply to RICs, such rules do apply to a RIC with respect to items
attributable to an interest in a qualified publicly traded partnership.

 

The Funds may invest in certain MLPs, which may be
treated as “qualified publicly traded partnerships.” Income from qualified publicly traded partnerships is qualifying income
for purposes of the Qualifying Income Test, but a Fund’s investment in one or more of such “qualified publicly traded partnerships”
is limited under the Asset Test to no more than 25% of the value of the Fund’s assets. The Funds will monitor their investments
in such qualified publicly traded partnerships in order to ensure compliance with the Qualifying Income and Asset Tests. MLPs and other
partnerships that the Funds may invest in will deliver Schedules K-1 to the Funds to report their share of income, gains, losses, deductions
and credits of the MLP or other partnership. These Schedules K-1 may be delayed and may not be received until after the time that a Fund
issues its tax reporting statements. As a result, a Fund may at times find it necessary to reclassify the amount and character of its
distributions to you after it issues you your tax reporting statement.

 

“Qualified publicly traded partnership income”
within the meaning of Section 199A(e)(5) of the Code is eligible for a 20% deduction by non-corporate taxpayers. Qualified publicly traded
partnership income is generally income of a “publicly traded partnership” that is not treated as a corporation for U.S. federal
income tax purposes that is effectively connected with such entity’s trade or business, but does not include certain investment
income. A “publicly traded partnership” for purposes of this deduction is not necessarily the same as a “qualified publicly
traded partnership,” as defined above. This deduction, if allowed in full, equates to a maximum effective tax rate of 29.6% (37%
top rate applied to income after 20% deduction). The Code does not contain a provision permitting a RIC, such as a Fund, to pass the special
character of this income through to its shareholders. Currently, direct investors in entities that generate “qualified publicly
traded partnership income” will enjoy the lower rate, but investors in RICs that invest in such entities will not. It is uncertain
whether future technical corrections or administrative guidance will address this issue to enable a Fund to pass through the special character
of “qualified publicly traded partnership income” to shareholders.

 

A Fund may invest in REITs. Investments in REIT equity
securities may require a Fund to accrue and distribute income not yet received. To generate sufficient cash to make the requisite distributions,
such Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that it otherwise would
have continued to hold. A Fund’s investments in REIT equity securities may at other times result in the Fund’s receipt of
cash in excess of the REIT’s earnings; if the Fund distributes these amounts, these distributions could constitute a return of capital
to the Fund’s shareholders for federal income tax purposes. Dividends paid by a REIT, other than capital gain distributions, will
be taxable as ordinary income up to the amount of the REIT’s current and accumulated earnings and profits. Capital gain dividends
paid by a REIT to a Fund will be treated as long-term capital gains by a Fund and, in turn, may be distributed by the Fund to its shareholders
as a capital gain distribution. Dividends received by a Fund from a REIT generally will not constitute qualified dividend income or qualify
for the dividends received deduction. If a REIT is operated in a manner such that it fails to qualify as a REIT, an investment in the
REIT would become subject to double taxation, meaning the taxable income of the REIT would be subject to federal income tax at the regular
corporate rate without any deduction for dividends paid to shareholders and the dividends would be taxable to shareholders as ordinary
income (or possibly as qualified dividend income) to the extent of the REIT’s current and accumulated earnings and profits.

 

“Qualified REIT dividends” (i.e., ordinary
REIT dividends other than capital gain dividends and portions of REIT dividends designated as qualified dividend income eligible for capital
gain tax rates) are eligible for a 20% deduction by non-corporate taxpayers. This deduction, if allowed in full, equates to a maximum
effective tax rate of 29.6% (37% top rate applied to income after 20% deduction). Distributions by a Fund to its shareholders that are
attributable to qualified REIT dividends received by the Fund and which the Fund properly reports as “section 199A dividends,”
are treated as “qualified REIT dividends” in the hands of non-corporate shareholders. A section 199A dividend is treated as
a qualified REIT dividend only if the shareholder receiving such dividend holds the dividend-paying RIC shares for at least 46 days of
the 91-day period beginning 45 days before the shares become ex-dividend, and is not under an obligation to make related payments with
respect to a position in substantially similar or related property. A Fund is permitted to report such part of its dividends as section
199A dividends as are eligible, but is not required to do so.

 

REITs in which a Fund invests often do not provide
complete and final tax information to the Fund until after the time that the Fund issues a tax reporting statement. As a result, a Fund
may at times find it necessary to reclassify the amount and character of its distributions to you after it issues your tax reporting statement.
When such reclassification is necessary, a Fund (or its administrative agent) will send you a corrected, final Form 1099-DIV to reflect
the reclassified information. If you receive a corrected Form 1099-DIV, use the information on this corrected form, and not the information
on the previously issued tax reporting statement, in completing your tax returns.

 

If a Fund owns shares in certain foreign investment
entities, referred to as “passive foreign investment companies” or “PFICs,” the Fund will generally be subject
to one of the following special tax regimes: (i) the Fund may be liable for U.S. federal income tax, and an additional interest charge,
on a portion of any “excess distribution” from such foreign entity or any gain from the disposition of such shares, even if
the entire distribution or gain is paid out by the Fund as a dividend to its shareholders; (ii) if the Fund were able and elected to treat
a PFIC as a “qualified electing fund” or “QEF,” the Fund would be required each year to include in income, and
distribute to shareholders in accordance with the distribution requirements set forth above, the Fund’s pro rata share of the ordinary
earnings and net capital gains of the PFIC, whether or not such earnings or gains are distributed to the Fund; or (iii) the Fund may be
entitled to mark-to-market annually shares of the PFIC, and in such event would be required to distribute to shareholders any such mark-to-market
gains in accordance with the distribution requirements set forth above. Such Fund intends to make the appropriate tax elections, if possible,
and take any additional steps that are necessary to mitigate the effect of these rules. Amounts included in income each year by a Fund
arising from a QEF election will be “qualifying income” under the Qualifying Income Test (as described above) even if not
distributed to the Fund, if the Fund derives such income from its business of investing in stock, securities or currencies.

 

Certain Foreign Currency Tax Issues. A Fund’s
transactions in foreign currencies and forward foreign currency contracts will generally be subject to special provisions of the Code
that, among other things, may affect the character of gains and losses realized by the Fund (i.e., may affect whether gains or losses
are ordinary or capital), accelerate recognition of income to the Fund and defer losses. These rules could therefore affect the character,
amount and timing of distributions to shareholders. These provisions also may require a Fund to mark-to-market certain types of positions
in its portfolio (i.e., treat them as if they were closed out) which may cause the Fund to recognize income without receiving cash with
which to make distributions in amounts necessary to satisfy the Distribution Requirements and for avoiding the excise tax described above.
Each Fund intends to monitor its transactions, intends to make the appropriate tax elections, and intends to make the appropriate entries
in its books and records when it acquires any foreign currency or forward foreign currency contract in order to mitigate the effect of
these rules so as to prevent disqualification of the Fund as a RIC and minimize the imposition of income and excise taxes.

 

The U.S. Treasury Department has authority to issue
regulations that would exclude foreign currency gains from the Qualifying Income Test described above if such gains are not directly related
to a Fund’s business of investing in stock or securities (or options and futures with respect to stock or securities). Accordingly,
regulations may be issued in the future that could treat some or all of a Fund’s non-U.S. currency gains as non-qualifying income,
thereby potentially jeopardizing the Fund’s status as a RIC for all years to which the regulations are applicable.

 

Foreign Taxes. Dividends and interest received
by a Fund may be subject to income, withholding or other taxes imposed by foreign countries and U.S. possessions that would reduce the
yield on the Fund’s stocks or securities. Tax conventions between certain countries and the United States may reduce or eliminate these
taxes. Foreign countries generally do not impose taxes on capital gains with respect to investments by foreign investors.

 

If more than 50% of the value of a Fund’s total
assets at the close of its taxable year consists of stocks or securities of foreign corporations, the Fund will be eligible to and intends
to file an election with the IRS that may enable shareholders, in effect, to receive either the benefit of a foreign tax credit, or a
deduction from such taxes, with respect to any foreign and U.S. possessions income taxes paid by the Fund, subject to certain limitations.
Pursuant to the election, a Fund will treat those taxes as dividends paid to its shareholders. Each such shareholder will be required
to include a proportionate share of those taxes in gross income as income received from a foreign source and must treat the amount so
included as if the shareholder had paid the foreign tax directly. The shareholder may then either deduct the taxes deemed paid by him
or her in computing his or her taxable income or, alternatively, use the foregoing information in calculating any foreign tax credit they
may be entitled to use against the shareholders’ federal income tax. If a Fund makes the election, the Fund (or its administrative
agent) will report annually to its shareholders the respective amounts per share of the Fund’s income from sources within, and taxes
paid to, foreign countries and U.S. possessions. If the Fund does not hold sufficient foreign securities to meet the above threshold,
then shareholders will not be entitled to claim a credit or further deduction with respect to foreign taxes paid by the Fund.

 

A shareholder’s ability to claim a foreign tax
credit or deduction in respect of foreign taxes paid by a Fund may be subject to certain limitations imposed by the Code, which may result
in a shareholder not receiving a full credit or deduction (if any) for the amount of such taxes. In particular, shareholders must hold
their Fund shares (without protection from risk of loss) on the ex-dividend date and for at least 15 additional days during the 30-day
period surrounding the ex-dividend date to be eligible to claim a foreign tax credit with respect to a given dividend. Shareholders who
do not itemize on their federal income tax returns may claim a credit (but no deduction) for such foreign taxes. Even if a Fund were eligible
to make such an election for a given year, it may determine not to do so. Shareholders that are not subject to U.S. federal income tax,
and those who invest in a Fund through tax-advantaged accounts (including those who invest through individual retirement accounts or other
tax-advantaged retirement plans), generally will receive no benefit from any tax credit or deduction passed through by the Fund.

 

Foreign tax credits, if any, received by a Fund as
a result of an investment in another RIC (including an ETF which is taxable as a RIC) will not be passed through to you unless the Fund
qualifies as a “qualified fund-of-funds” under the Code. If a Fund is a “qualified fund-of-funds” it will be eligible
to file an election with the IRS that will enable the Fund to pass along these foreign tax credits to its shareholders. A Fund will be
treated as a “qualified fund-of-funds” under the Code if at least 50% of the value of the Fund’s total assets (at the
close of each quarter of the Fund’s taxable year) is represented by interests in other RICs.

 

Tax-Exempt Shareholders. Certain tax-exempt
shareholders, including qualified pension plans, individual retirement accounts, salary deferral arrangements, 401(k)s, and other tax-exempt
entities, generally are exempt from federal income taxation except with respect to their unrelated business taxable income (“UBTI”).
Tax-exempt entities are not permitted to offset losses from one trade or business against the income or gain of another trade or business.
Certain net losses incurred prior to January 1, 2018 are permitted to offset gain and income created by an unrelated trade or business,
if otherwise available. Under current law, the Funds generally serve to block UBTI from being realized by their tax-exempt shareholders.
However, notwithstanding the foregoing, the tax-exempt shareholder could realize UBTI by virtue of an investment in a Fund where, for
example: (i) the Fund invests in residual interests of Real Estate Mortgage Investment Conduits (“REMICs”), (ii) the Fund
invests in a REIT that is a taxable mortgage pool (“TMP”) or that has a subsidiary that is a TMP or that invests in the residual
interest of a REMIC, or (iii) shares in the Fund constitute debt-financed property in the hands of the tax-exempt shareholder within the
meaning of section 514(b) of the Code. Charitable remainder trusts are subject to special rules and should consult their tax advisor.
The IRS has issued guidance with respect to these issues and prospective shareholders, especially charitable remainder trusts, are strongly
encouraged to consult their tax advisors regarding these issues.

 

A Fund’s shares held in a tax-qualified retirement
account will generally not be subject to federal taxation on income and capital gains distributions from the Fund until a shareholder
begins receiving payments from their retirement account. Because each shareholder’s tax situation is different, shareholders should
consult their tax advisor about the tax implications of an investment in the Funds.

 

Backup Withholding. A Fund will be required
in certain cases to withhold at a 24% withholding rate and remit to the U.S. Treasury the amount withheld on amounts payable to any shareholder
who: (i) has provided the Fund either an incorrect tax identification number or no number at all; (ii) is subject to backup withholding
by the IRS for failure to properly report payments of interest or dividends; (iii) has failed to certify to the Fund that such shareholder
is not subject to backup withholding; or (iv) has failed to certify to the Fund that the shareholder is a U.S. person (including a resident
alien).

 

Non-U.S. Investors. Any non-U.S. investors
in the Funds may be subject to U.S. withholding and estate tax and are encouraged to consult their tax advisors prior to investing in
the Funds. Foreign shareholders (i.e., nonresident alien individuals and foreign corporations, partnerships, trusts and estates) are generally
subject to U.S. withholding tax at the rate of 30% (or a lower tax treaty rate) on distributions derived from taxable ordinary income.
A Fund may, under certain circumstances, report all or a portion of a dividend as an “interest-related dividend” or a “short-term
capital gain dividend,” which would generally be exempt from this 30% U.S. withholding tax, provided certain other requirements
are met. Short-term capital gain dividends received by a nonresident alien individual who is present in the U.S. for a period or periods
aggregating 183 days or more during the taxable year are not exempt from this 30% withholding tax. Gains realized by foreign shareholders
from the sale or other disposition of shares of a Fund generally are not subject to U.S. taxation, unless the recipient is an individual
who is physically present in the U.S. for 183 days or more per year. Foreign shareholders who fail to provide an applicable IRS form may
be subject to backup withholding on certain payments from a Fund. Backup withholding will not be applied to payments that are subject
to the 30% (or lower applicable treaty rate) withholding tax described above. Different tax consequences may result if the foreign shareholder
is engaged in a trade or business within the United States. In addition, the tax consequences to a foreign shareholder entitled to claim
the benefits of a tax treaty may be different than those described above.

 

Under legislation generally known as “FATCA”
(the Foreign Account Tax Compliance Act), the Funds are required to withhold 30% of certain ordinary dividends they pay to shareholders
that fail to meet prescribed information reporting or certification requirements. In general, no such withholding will be required with
respect to a U.S. person or non-U.S. person that timely provides the certifications required by the Funds or their agent on a valid IRS
Form W-9 or applicable series of IRS Form W-8, respectively. Shareholders potentially subject to withholding include foreign financial
institutions (“FFIs”), such as non-U.S. investment funds, and non-financial foreign entities (“NFFEs”). To avoid
withholding under FATCA, an FFI generally must enter into an information sharing agreement with the IRS in which it agrees to report certain
identifying information (including name, address, and taxpayer identification number) with respect to its U.S. account holders (which,
in the case of an entity shareholder, may include its direct and indirect U.S. owners), and an NFFE generally must identify and provide
other required information to the Funds or other withholding agent regarding its U.S. owners, if any. Such non-U.S. shareholders also
may fall into certain exempt, excepted or deemed compliant categories as established by regulations and other guidance. A non-U.S. shareholder
resident or doing business in a country that has entered into an intergovernmental agreement with the U.S. to implement FATCA will be
exempt from FATCA withholding provided that the shareholder and the applicable foreign government comply with the terms of the agreement.

 

A non-U.S. entity that invests in a Fund will need
to provide such Fund with documentation properly certifying the entity’s status under FATCA in order to avoid FATCA withholding.
Non-U.S. investors in the Funds should consult their tax advisors in this regard.

 

Tax Shelter Reporting Regulations. Under U.S.
Treasury regulations, generally, if a shareholder recognizes a loss of $2 million or more for an individual shareholder or $10 million
or more for a corporate shareholder, the shareholder must file with the IRS a disclosure statement on Form 8886. Direct shareholders of
portfolio securities are in many cases excepted from this reporting requirement, but under current guidance, shareholders of a RIC such
as a Fund are not excepted. Future guidance may extend the current exception from this reporting requirement to shareholders of most or
all RICs. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the taxpayer’s
treatment of the loss is proper. Shareholders should consult their tax advisors to determine the applicability of these regulations in
light of their individual circumstances.

 

State Taxes. Depending upon state and local
law, distributions by a Fund to its shareholders and the ownership of such shares may be subject to state and local taxes. Rules of state
and local taxation of dividend and capital gains distributions from RICs often differ from the rules for federal income taxation described
above. It is expected that a Fund will not be liable for any corporate tax in Delaware if it qualifies as a RIC for federal income tax
purposes.

 

Many states grant tax-free status to dividends paid
to you from interest earned on direct obligations of the U.S. government, subject in some states to minimum investment requirements that
must be met by a Fund. Investment in Ginnie Mae or Fannie Mae securities, banker’s acceptances, commercial paper, and repurchase
agreements collateralized by U.S. government securities do not generally qualify for such tax-free treatment. The rules on exclusion of
this income are different for corporate shareholders. Shareholders are urged to consult their tax advisors regarding state and local taxes
applicable to an investment in a Fund.

 

FUND TRANSACTIONS

 

Brokerage Transactions. Generally, equity securities,
both listed and over-the-counter, are bought and sold through brokerage transactions for which commissions are payable. Purchases from
underwriters will include the underwriting commission or concession, and purchases from dealers serving as market makers will include
a dealer’s mark-up or reflect a dealer’s mark-down. Money market securities and other debt securities are usually bought and
sold directly from the issuer or an underwriter or market maker for the securities. Generally, the Funds will not pay brokerage commissions
for such purchases. When a debt security is bought from an underwriter, the purchase price will usually include an underwriting commission
or concession. The purchase price for securities bought from dealers serving as market makers will similarly include the dealer’s
mark up or reflect a dealer’s mark down. When the Funds execute transactions in the over-the-counter market, they will generally
deal with primary market makers unless prices that are more favorable are otherwise obtainable.

 

In addition, the Adviser and the Sub-Adviser may place
a combined order for two or more accounts it manages, including the Funds, engaged in the purchase or sale of the same security if, in
its judgment, joint execution is in the best interest of each participant and will result in best price and execution. Transactions involving
commingled orders are allocated in a manner deemed equitable to each account or fund. Although it is recognized that, in some cases, the
joint execution of orders could adversely affect the price or volume of the security that a particular account or the Funds may obtain,
it is the opinion of the Adviser and the Sub-Adviser that the advantages of combined orders outweigh the possible disadvantages of combined
orders.

 

Brokerage Selection. The Trust does not expect
to use one particular broker or dealer, and when one or more brokers is believed capable of providing the best combination of price and
execution, the Adviser and the Sub-Adviser may select a broker based upon brokerage or research services provided to the Adviser and the
Sub-Adviser. The Adviser and the Sub-Adviser may pay a higher commission than otherwise obtainable from other brokers in return for such
services only if a good faith determination is made that the commission is reasonable in relation to the services provided.

 

Section 28(e) of the 1934 Act permits the Adviser
and the Sub-Adviser, under certain circumstances, to cause the Funds to pay a broker or dealer a commission for effecting a transaction
in excess of the amount of commission another broker or dealer would have charged for effecting the transaction in recognition of the
value of brokerage and research services provided by the broker or dealer. In addition to agency transactions, the Adviser and the Sub-Adviser
may receive brokerage and research services in connection with certain riskless principal transactions, in accordance with applicable
SEC guidance. Brokerage and research services include: (1) furnishing advice as to the value of securities, the advisability of investing
in, purchasing or selling securities, and the availability of securities or purchasers or sellers of securities; (2) furnishing analyses
and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy, and the performance of accounts;
and (3) effecting securities transactions and performing functions incidental thereto (such as clearance, settlement, and custody). In
the case of research services, the Adviser and the Sub-Adviser believe that access to independent investment research is beneficial to
its investment decision-making processes and, therefore, to the Funds.

 

To the extent that research services may be a factor
in selecting brokers, such services may be in written form or through direct contact with individuals and may include information as to
particular companies and securities as well as market, economic, or institutional areas and information which assists in the valuation
and pricing of investments. Examples of research-oriented services for which the Adviser and the Sub-Adviser might utilize Fund commissions
include research reports and other information on the economy, industries, sectors, groups of securities, individual companies, statistical
information, political developments, technical market action, pricing and appraisal services, credit analysis, risk measurement analysis,
performance and other analysis. The Adviser and the Sub-Adviser may use research services furnished by brokers in servicing all client
accounts and not all services may necessarily be used by the Adviser and the Sub-Adviser in connection with the Funds or any other specific
client account that paid commissions to the broker providing such services. Information so received by the Adviser and the Sub-Adviser
will be in addition to and not in lieu of the services required to be performed by the Adviser under the Advisory Agreement or the Sub-Adviser
under the Sub-Advisory Agreement. Any advisory or other fees paid to the Adviser and the Sub-Adviser are not reduced as a result of the
receipt of research services.

 

In some cases the Adviser and the Sub-Adviser may
receive a service from a broker that has both a “research” and a “non-research” use. When this occurs, the Adviser
and the Sub-Adviser make a good faith allocation, under all the circumstances, between the research and non-research uses of the service.
The percentage of the service that is used for research purposes may be paid for with client commissions, while the Adviser and the Sub-Adviser
will use their own funds to pay for the percentage of the service that is used for non-research purposes. In making this good faith allocation,
the Adviser and the Sub-Adviser face a potential conflict of interest, but the Adviser and the Sub-Adviser believe that its allocation
procedures are reasonably designed to ensure that it appropriately allocates the anticipated use of such services to their research and
non-research uses.

 

From time to time, the Adviser and the Sub-Adviser
may purchase new issues of securities for clients, including the Funds, in a fixed price offering. In these situations, the seller may
be a member of the selling group that will, in addition to selling securities, provide the Adviser and the Sub-Adviser with research services.
FINRA has adopted rules expressly permitting these types of arrangements under certain circumstances. Generally, the seller will provide
research “credits” in these situations at a rate that is higher than that which is available for typical secondary market
transactions. These arrangements may not fall within the safe harbor of Section 28(e).

 

Brokerage with Fund Affiliates. The Funds may
execute brokerage or other agency transactions through registered broker-dealer affiliates of either the Funds, the Adviser or the Sub-Adviser
for a commission in conformity with the 1940 Act and rules promulgated by the SEC. The 1940 Act requires that commissions paid to the
affiliate by the Funds for exchange transactions not exceed “usual and customary” brokerage commissions. The rules define
“usual and customary” commissions to include amounts which are “reasonable and fair compared to the commission, fee
or other remuneration received or to be received by other brokers in connection with comparable transactions involving similar securities
being purchased or sold on a securities exchange during a comparable period of time.” The Trustees, including those who are not
“interested persons” of the Funds, have adopted procedures for evaluating the reasonableness of commissions paid to affiliates
and review these procedures periodically.

 

Securities of “Regular Broker-Dealers.”
The Funds are required to identify any securities of their “regular brokers and dealers” (as such term is defined in the
1940 Act) that the Funds held during their most recent fiscal year. Because the Funds are new, as of the date of this SAI, the Funds did
not hold any securities of their “regular brokers or dealers.”

 

Portfolio Turnover Rates. Portfolio turnover
is calculated by dividing the lesser of total purchases or sales of portfolio securities for the fiscal year by the monthly average value
of portfolio securities owned during the fiscal year. Excluded from both the numerator and denominator are amounts relating to securities
whose maturities at the time of acquisition were one year or less. Instruments excluded from the calculation of portfolio turnover generally
would include the futures contracts in which the Funds may invest since such contracts generally have remaining maturities of less than
one year. The Funds may at times hold investments in other short-term instruments, such as repurchase agreements, which are excluded for
purposes of computing portfolio turnover.

 

PORTFOLIO HOLDINGS

 

The Board has approved a policy and procedures that
govern the timing and circumstances regarding the disclosure of Fund portfolio holdings information to shareholders and third parties.
These policies and procedures are designed to ensure that disclosure of information regarding the Funds’ portfolio securities is
in the best interests of the Funds’ shareholders, and include procedures to address conflicts between the interests of the Funds’
shareholders, on the one hand, and those of the Adviser, the Sub-Adviser, principal underwriter or any affiliated person of the Funds,
the Adviser, the Sub-Adviser, or the Funds’ principal underwriter, on the other. Pursuant to such procedures, the Board has authorized
the Adviser’s Chief Compliance Officer (the “Authorized Person”) to authorize the release of the Funds’ portfolio
holdings, as necessary, in conformity with the foregoing principles. The Authorized Person, either directly or through reports by the
Trust’s Chief Compliance Officer, reports quarterly to the Board regarding the operation and administration of such policies and
procedures.

 

Pursuant to applicable law, the Funds are required
to disclose their complete portfolio holdings quarterly, within 60 days of the end of each fiscal quarter (currently, each January 31,
April 30, July 31, and October 31). Each Fund discloses a complete or summary schedule of investments (which includes the Fund’s
50 largest holdings in unaffiliated issuers and each investment in unaffiliated issuers that exceeds one percent of the Fund’s net
asset value (“Summary Schedule”)) in its Semi-Annual and Annual Reports which are distributed to Fund shareholders. Each Fund’s
complete schedule of investments following the first and third fiscal quarters will be available in quarterly holdings reports filed with
the SEC as exhibits to Form N-PORT, and each Fund’s complete schedule of investments following the second and fourth fiscal quarters will
be available in shareholder reports filed with the SEC on Form N-CSR.

 

Complete schedules of investments filed with the SEC
on Form N-CSR and as exhibits to Form N-PORT are not distributed to Fund shareholders but are available, free of charge, on the SEC’s
website at www.sec.gov. Should a Fund include only a Summary Schedule rather than a complete schedule of investments in its Semi-Annual
and Annual Reports, its complete schedule of investments will be available without charge, upon request, by calling [Telephone].

 

In addition to the quarterly portfolio holdings disclosure
required by applicable law, within 10 days of the end of each month, each Fund will post its holdings on the internet at [BarrowHanley.com].
The Adviser may exclude any portion of the Fund’s portfolio holdings from such publication when deemed in the best interest of the
Fund. The portfolio holdings information placed on the Funds’ website generally will remain there until replaced by new postings
as described above.

 

In addition to information provided to shareholders
and the general public, portfolio holdings information may be disclosed as frequently as daily to the Funds’ Adviser, Sub-Adviser,
Administrator, Custodian, Transfer Agent, financial printer, pricing vendors, liquidity analytics vendors, class action reclaim vendors
and foreign tax reclaim vendors and other vendors that provide the Adviser or Sub-Adviser with various middle office, back office, client
reporting and portfolio analytics services in connection with their services to the Funds. From time to time rating and ranking organizations,
such as S&P, Lipper and Morningstar, Inc., may request non-public portfolio holdings information in connection with rating the Funds.
Similarly, institutional investors, financial planners, pension plan sponsors and/or their consultants or other third-parties may request
portfolio holdings information in order to assess the risks of the Funds’ portfolios along with related performance attribution
statistics. The lag time for such disclosures will vary. The Funds believe that these third parties have legitimate objectives in requesting
such portfolio holdings information.

 

The Funds’ policies and procedures provide that
the Authorized Person may authorize disclosure of non-public portfolio holdings information to such parties at differing times and/or
with different lag times. Prior to making any disclosure to a third party, the Authorized Person must determine that such disclosure serves
a reasonable business purpose, is in the best interests of a Fund’s shareholders and that to the extent conflicts between the interests
of the Fund’s shareholders and those of the Adviser, the Sub-Adviser, principal underwriter, or any affiliated person of the Fund
exist, such conflicts are addressed. Portfolio holdings information may be disclosed no more frequently than monthly to ratings agencies,
consultants and other qualified financial professionals or individuals. The disclosures will not be made sooner than three days after
the date of the information. The Trust’s Chief Compliance Officer will regularly review these arrangements and will make periodic
reports to the Board regarding disclosure pursuant to such arrangements.

 

The Funds require any third party receiving non-public
holdings information to enter into a confidentiality agreement with the Adviser. The confidentiality agreement provides, among other things,
that non-public portfolio holdings information will be kept confidential and that the recipient has a duty not to trade on the non-public
information and will use such information solely to analyze and rank the Funds, or to perform due diligence and asset allocation, depending
on the recipient of the information.

 

The Trust’s policies and procedures prohibit
any compensation or other consideration from being paid to or received by any party in connection with the disclosure of portfolio holdings
information, including the Funds, the Adviser, the Sub-Adviser and their affiliates or recipients of the Funds’ portfolio holdings
information.

 

The Adviser or the Sub-Adviser may manage other accounts
that are not subject to these policies and procedures with investment objectives and strategies that are substantially similar to those
of a Fund. Because the portfolio holdings of such accounts may be substantially similar, and in some cases nearly identical, to those
of a Fund, an investor in such an account may be able to infer the portfolio holdings of a Fund from the portfolio holdings of the account.

 

DESCRIPTION OF SHARES

 

The Declaration of Trust authorizes the issuance of
an unlimited number of funds and shares of each fund, each of which represents an equal proportionate interest in that fund with each
other share. Shares are entitled upon liquidation to a pro rata share in the net assets of the fund. Shareholders have no preemptive rights.
The Declaration of Trust provides that the Trustees may create additional series or classes of shares. All consideration received by the
Trust for shares of any additional fund and all assets in which such consideration is invested would belong to that fund and would be
subject to the liabilities related thereto. Share certificates representing shares will not be issued. The Funds’ shares, when issued,
are fully paid and non-assessable.

 

LIMITATION OF TRUSTEES’ LIABILITY

 

The Declaration of Trust provides that a Trustee shall
be liable only for his or her own willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee, and shall not be liable for errors of judgment or mistakes of fact or law. The Trustees shall not be
responsible or liable in any event for any neglect or wrongdoing of any officer, agent, employee, investment adviser or principal underwriter
of the Trust, nor shall any Trustee be responsible for the act or omission of any other Trustee. The Declaration of Trust also provides
that the Trust shall indemnify each person who is, or has been, a Trustee, officer, employee or agent of the Trust, and any person who
is serving or has served at the Trust’s request as a Trustee, officer, employee or agent of another organization in which the Trust
has any interest as a shareholder, creditor or otherwise to the extent and in the manner provided in the By-Laws. However, nothing in
the Declaration of Trust shall protect or indemnify a Trustee against any liability for his or her willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the office of Trustee. Nothing contained in this section attempts
to disclaim a Trustee’s individual liability in any manner inconsistent with the federal securities laws.

 

PROXY VOTING

 

The Board has delegated the responsibility for decisions
regarding proxy voting for securities held by the Funds to the Adviser. The Adviser has delegated the responsibility for decisions regarding
proxy voting for securities held by Funds to the Sub-Adviser. The Sub-Adviser will vote such proxies in accordance with its proxy voting
policies and procedures, which are included in Appendix B to this SAI.

 

The Trust is required to disclose annually the Funds’
complete proxy voting record during the most recent 12-month period ended June 30 on Form N-PX. This voting record is available: (i) without
charge, upon request, by calling [Telephone]; and (ii) on the SEC’s website at https://www.sec.gov.

 

CODES OF ETHICS

 

The Board, on behalf of the Trust, has adopted a Code
of Ethics pursuant to Rule 17j-1 under the 1940 Act. In addition, the Adviser, the Sub-Adviser, the Administrator and the Distributor
have adopted Codes of Ethics pursuant to Rule 17j-1. These Codes of Ethics apply to the personal investing activities of trustees, officers
and certain employees (“Access Persons”). Rule 17j-1 and the Codes of Ethics are designed to prevent unlawful practices in
connection with the purchase or sale of securities by Access Persons. Under each Code of Ethics, Access Persons are permitted to invest
in securities, including securities that may be purchased or held by the Funds, but are required to report their personal securities transactions
for monitoring purposes. In addition, certain Access Persons are required to obtain approval before investing in initial public offerings
or private placements or are prohibited from making such investments. Copies of these Codes of Ethics are on file with the SEC, and are
available to the public.

 

PRINCIPAL SHAREHOLDERS AND CONTROL PERSONS

 

Because the Funds are new, as of the date of this
SAI, the Funds did not have any principal shareholders or control persons to report.

 

APPENDIX A

 

DESCRIPTION OF RATINGS

 

Description of Ratings

 

The following descriptions of securities ratings have
been published by Moody’s Investors Services, Inc. (“Moody’s”), S&P Global Ratings (“S&P”),
and Fitch Ratings (“Fitch”), respectively.

 

Description of Moody’s Global Ratings

 

Ratings assigned on Moody’s global long-term
and short-term rating scales are forward-looking opinions of the relative credit risks of financial obligations issued by non-financial
corporates, financial institutions, structured finance vehicles, project finance vehicles, and public sector entities. Long-term ratings
are assigned to issuers or obligations with an original maturity of one year or more and reflect both on the likelihood of a default or
impairment on contractual financial obligations and the expected financial loss suffered in the event of default or impairment. Short-term
ratings are assigned for obligations with an original maturity of thirteen months or less and reflect both on the likelihood of a default
or impairment on contractual financial obligations and the expected financial loss suffered in the event of default or impairment.

 

Description of Moody’s Global Long-Term Ratings

 

Aaa Obligations rated Aaa are judged to be
of the highest quality, subject to the lowest level of credit risk.

 

Aa Obligations rated Aa are judged to be of
high quality and are subject to very low credit risk.

 

A Obligations rated A are judged to be upper-medium
grade and are subject to low credit risk.

 

Baa Obligations rated Baa are judged to be
medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.

 

Ba Obligations rated Ba are judged to be speculative
and are subject to substantial credit risk.

 

B Obligations rated B are considered speculative
and are subject to high credit risk.

 

Caa Obligations rated Caa are judged to be
speculative of poor standing and are subject to very high credit risk.

 

Ca Obligations rated Ca are highly speculative
and are likely in, or very near, default, with some prospect of recovery of principal and interest.

 

C Obligations rated C are the lowest rated
and are typically in default, with little prospect for recovery of principal or interest.

 

Note: Moody’s appends numerical modifiers
1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher
end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower
end of that generic rating category.

 

Hybrid Indicator (hyb)

 

The hybrid indicator (hyb) is appended to all ratings
of hybrid securities issued by banks, insurers, finance companies, and securities firms. By their terms, hybrid securities allow for the
omission of scheduled dividends, interest, or principal payments, which can potentially result in impairment if such an omission occurs.
Hybrid securities may also be subject to contractually allowable write-downs of principal that could result in impairment. Together with
the hybrid indicator, the long-term obligation rating assigned to a hybrid security is an expression of the relative credit risk associated
with that security.

 

Description of Moody’s Global Short-Term
Ratings

 

P-1 Issuers (or supporting institutions) rated
Prime-1 have a superior ability to repay short-term debt obligations.

 

P-2 Issuers (or supporting institutions) rated
Prime-2 have a strong ability to repay short-term debt obligations.

 

P-3 Issuers (or supporting institutions) rated
Prime-3 have an acceptable ability to repay short-term obligations.

 

NP Issuers (or supporting institutions) rated
Not Prime do not fall within any of the Prime rating categories.

 

Description of Moody’s U.S. Municipal Short-Term
Obligation Ratings

 

The Municipal Investment Grade (“MIG”)
scale is used to rate U.S. municipal cash flow notes, bond anticipation notes and certain other short-term obligations, which typically
mature in three years or less. Under certain circumstances, the MIG scale is used to rate bond anticipation notes with maturities of up
to five years.

 

Moody’s U.S. municipal short-term obligation
ratings are as follows:

 

MIG 1 This designation denotes superior credit
quality. Excellent protection is afforded by established cash flows, highly reliable liquidity support, or demonstrated broad-based access
to the market for refinancing.

 

MIG 2 This designation denotes strong credit
quality. Margins of protection are ample, although not as large as in the preceding group.

 

MIG 3 This designation denotes acceptable credit
quality. Liquidity and cash-flow protection may be narrow, and market access for refinancing is likely to be less well-established.

 

SG This designation denotes speculative-grade
credit quality. Debt instruments in this category may lack sufficient margins of protection.

 

Description of Moody’s Demand Obligation
Ratings

 

In the case of variable rate demand obligations (“VRDOs”),
a two-component rating is assigned. The components are a long-term rating and a short-term demand obligation rating. The long-term rating
addresses the issuer’s ability to meet scheduled principal and interest payments. The short-term demand obligation rating addresses
the ability of the issuer or the liquidity provider to make payments associated with the purchase-price-upon-demand feature (“demand
feature”) of the VRDO. The short-term demand obligation rating uses the Variable Municipal Investment Grade (“VMIG”)
scale. VMIG ratings with liquidity support use as an input the short-term counterparty risk assessment of the support provider, or the
long-term rating of the underlying obligor in the absence of third party liquidity support. Transitions of VMIG ratings of demand obligations
with conditional liquidity support differ from transitions on the Prime scale to reflect the risk that external liquidity support will
terminate if the issuer’s long-term rating drops below investment grade. The VMIG short-term demand obligation rating is typically
assigned if the frequency of the demand feature is less than every three years. If the frequency of the demand feature is less than three
years but the purchase price is payable only with remarketing proceeds, the short-term demand obligation rating is “NR”.

 

Moody’s demand obligation ratings are as follows:

 

VMIG 1 This designation denotes superior credit
quality. Excellent protection is afforded by the superior short-term credit strength of the liquidity provider and structural and legal
protections that ensure the timely payment of purchase price upon demand.

 

VMIG 2 This designation denotes strong credit
quality. Good protection is afforded by the strong short-term credit strength of the liquidity provider and structural and legal protections
that ensure the timely payment of purchase price upon demand.

 

VMIG 3 This designation denotes acceptable
credit quality. Adequate protection is afforded by the satisfactory short-term credit strength of the liquidity provider and structural
and legal protections that ensure the timely payment of purchase price upon demand.

 

SG This designation denotes speculative-grade
credit quality. Demand features rated in this category may be supported by a liquidity provider that does not have a sufficiently strong
short-term rating or may lack the structural or legal protections necessary to ensure the timely payment of purchase price upon demand.

 

Description of S&P’s Issue Credit Ratings

 

An S&P issue credit rating is a forward-looking
opinion about the creditworthiness of an obligor with respect to a specific financial obligation, a specific class of financial obligations,
or a specific financial program (including ratings on medium-term note programs and commercial paper programs). It takes into consideration
the creditworthiness of guarantors, insurers, or other forms of credit enhancement on the obligation and takes into account the currency
in which the obligation is denominated. The opinion reflects S&P’s view of the obligor’s capacity and willingness to meet
its financial commitments as they come due, and this opinion may assess terms, such as collateral security and subordination, which could
affect ultimate payment in the event of default.

 

Issue credit ratings can be either long-term or short-term.
Short-term issue credit ratings are generally assigned to those obligations considered short-term in the relevant market, typically with
an original maturity of no more than 365 days. Short-term issue credit ratings are also used to indicate the creditworthiness of an obligor
with respect to put features on long-term obligations. S&P would typically assign a long-term issue credit rating to an obligation
with an original maturity of greater than 365 days. However, the ratings S&P assigns to certain instruments may diverge from these
guidelines based on market practices. Medium-term notes are assigned long-term ratings.

 

Issue credit ratings are based, in varying degrees,
on S&P’s analysis of the following considerations:

 

• The likelihood of payment—the capacity
and willingness of the obligor to meet its financial commitments on an obligation in accordance with the terms of the obligation;

 

• The nature and provisions of the financial
obligation, and the promise S&P imputes; and

 

• The protection afforded by, and relative position
of, the financial obligation in the event of a bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other
laws affecting creditors’ rights.

 

An issue rating is an assessment of default risk but
may incorporate an assessment of relative seniority or ultimate recovery in the event of default. Junior obligations are typically rated
lower than senior obligations, to reflect lower priority in bankruptcy, as noted above. (Such differentiation may apply when an entity
has both senior and subordinated obligations, secured and unsecured obligations, or operating company and holding company obligations.)

 

NR indicates that a rating has not been assigned or
is no longer assigned.

 

Description of S&P’s Long-Term Issue
Credit Ratings*

 

AAA An obligation rated ‘AAA’ has
the highest rating assigned by S&P. The obligor’s capacity to meet its financial commitments on the obligation is extremely
strong.

 

AA An obligation rated ‘AA’ differs
from the highest-rated obligations only to a small degree. The obligor’s capacity to meet its financial commitments on the obligation
is very strong.

 

A An obligation rated ‘A’ is somewhat
more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories.
However, the obligor’s capacity to meet its financial commitments on the obligation is still strong.

 

BBB An obligation rated ‘BBB’ exhibits
adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to weaken the obligor’s
capacity to meet its financial commitments on the obligation.

 

BB; B; CCC; CC; and C Obligations rated ‘BB’,
‘B’, ‘CCC’, ‘CC’, and ‘C’ are regarded as having significant speculative characteristics.
‘BB’ indicates the least degree of speculation and ‘C’ the highest. While such obligations will likely have some
quality and protective characteristics, these may be outweighed by large uncertainties or major exposure to adverse conditions.

 

BB An obligation rated ‘BB’ is
less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business,
financial, or economic conditions that could lead to the obligor’s inadequate capacity to meet its financial commitments on the
obligation.

 

B An obligation rated ‘B’ is more
vulnerable to nonpayment than obligations rated ‘BB’, but the obligor currently has the capacity to meet its financial commitments
on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor’s capacity or willingness
to meet its financial commitments on the obligation.

 

CCC An obligation rated ‘CCC’ is
currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet
its financial commitments on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitments on the obligation.

 

CC An obligation rated ‘CC’ is
currently highly vulnerable to nonpayment. The ‘CC’ rating is used when a default has not yet occurred but S&P expects
default to be a virtual certainty, regardless of the anticipated time to default.

 

C An obligation rated ‘C’ is currently
highly vulnerable to nonpayment, and the obligation is expected to have lower relative seniority or lower ultimate recovery compared with
obligations that are rated higher.

 

D An obligation rated ‘D’ is in
default or in breach of an imputed promise. For non-hybrid capital instruments, the ‘D’ rating category is used when payments
on an obligation are not made on the date due, unless S&P believes that such payments will be made within five business days in the
absence of a stated grace period or within the earlier of the stated grace period or 30 calendar days. The ‘D’ rating also
will be used upon the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual
certainty, for example due to automatic stay provisions. A rating on an obligation is lowered to ‘D’ if it is subject to a
distressed debt restructuring.

 

*Ratings from ‘AA’ to ‘CCC’
may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the rating categories.

 

Description of S&P’s Short-Term Issue
Credit Ratings

 

A-1 A short-term obligation rated ‘A-1’
is rated in the highest category by S&P. The obligor’s capacity to meet its financial commitments on the obligation is strong.
Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor’s capacity to meet
its financial commitments on these obligations is extremely strong.

 

A-2 A short-term obligation rated ‘A-2’
is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating
categories. However, the obligor’s capacity to meet its financial commitments on the obligation is satisfactory.

 

A-3 A short-term obligation rated ‘A-3’
exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to weaken an obligor’s
capacity to meet its financial commitments on the obligation.

 

B A short-term obligation rated ‘B’
is regarded as vulnerable and has significant speculative characteristics. The obligor currently has the capacity to meet its financial
commitments; however, it faces major ongoing uncertainties that could lead to the obligor’s inadequate capacity to meet its financial
commitments.

 

C A short-term obligation rated ‘C’
is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to
meet its financial commitments on the obligation.

 

D A short-term obligation rated ‘D’
is in default or in breach of an imputed promise. For non-hybrid capital instruments, the ‘D’ rating category is used when
payments on an obligation are not made on the date due, unless S&P believes that such payments will be made within any stated grace
period. However, any stated grace period longer than five business days will be treated as five business days. The ‘D’ rating
also will be used upon the filing of a bankruptcy petition or the taking of a similar action and where default on an obligation is a virtual
certainty, for example due to automatic stay provisions. A rating on an obligation is lowered to ‘D’ if it is subject to a
distressed debt restructuring.

 

Description of S&P’s Municipal Short-Term
Note Ratings

 

An S&P U.S. municipal note rating reflects S&P’s
opinion about the liquidity factors and market access risks unique to the notes. Notes due in three years or less will likely receive
a note rating. Notes with an original maturity of more than three years will most likely receive a long-term debt rating. In determining
which type of rating, if any, to assign, S&P’s analysis will review the following considerations:

 

• Amortization schedule—the larger the
final maturity relative to other maturities, the more likely it will be treated as a note; and

 

• Source of payment—the more dependent
the issue is on the market for its refinancing, the more likely it will be treated as a note.

 

S&P’s municipal short-term note ratings
are as follows:

 

SP-1 Strong capacity to pay principal and interest.
An issue determined to possess a very strong capacity to pay debt service is given a plus (+) designation.

 

SP-2 Satisfactory capacity to pay principal
and interest, with some vulnerability to adverse financial and economic changes over the term of the notes.

 

SP-3 Speculative capacity to pay principal
and interest.

 

D ‘D’ is assigned upon failure
to pay the note when due, completion of a distressed debt restructuring, or the filing of a bankruptcy petition or the taking of similar
action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions.

 

Description of Fitch’s Credit Ratings

 

Fitch’s credit ratings relating to issuers are
an opinion on the relative ability of an entity to meet financial commitments, such as interest, preferred dividends, repayment of principal,
insurance claims or counterparty obligations. Credit ratings relating to securities and obligations of an issuer can include a recovery
expectation. Credit ratings are used by investors as indications of the likelihood of receiving the money owed to them in accordance with
the terms on which they invested.

 

The terms “investment grade” and “speculative
grade” have established themselves over time as shorthand to describe the categories ‘AAA’ to ‘BBB’ (investment
grade) and ‘BB’ to ‘D’ (speculative grade). The terms investment grade and speculative grade are market conventions
and do not imply any recommendation or endorsement of a specific security for investment purposes. Investment grade categories indicate
relatively low to moderate credit risk, while ratings in the speculative categories either signal a higher level of credit risk or that
a default has already occurred.

 

For the convenience of investors, Fitch may also include
issues relating to a rated issuer that are not and have not been rated on its web page. Such issues are also denoted as ‘NR’.

 

Fitch’s credit ratings do not directly address
any risk other than credit risk. In particular, ratings do not deal with the risk of a market value loss on a rated security due to changes
in interest rates, liquidity and other market considerations. However, in terms of payment obligation on the rated liability, market risk
may be considered to the extent that it influences the ability of an issuer to pay upon a commitment.

 

Ratings nonetheless do not reflect market risk to
the extent that they influence the size or other conditionality of the obligation to pay upon a commitment (for example, in the case of
index-linked bonds).

 

In the default components of ratings assigned to individual
obligations or instruments, the agency typically rates to the likelihood of non-payment or default in accordance with the terms of that
instrument’s documentation. In limited cases, Fitch may include additional considerations (i.e. rate to a higher or lower standard
than that implied in the obligation’s documentation).

 

Note: The modifiers “+” or “-”
may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to the ‘AAA’
ratings and ratings below the ‘CCC’ category. For the short-term rating category of ‘F1’, a ‘+’ may
be appended.

 

Description of Fitch’s Long-Term Corporate
Finance Obligations Ratings

 

AAA Highest credit quality. ‘AAA’
ratings denote the lowest expectation of credit risk. They are assigned only in cases of exceptionally strong capacity for payment of
financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.

 

AA Very high credit quality. ‘AA’
ratings denote expectations of very low credit risk. They indicate very strong capacity for payment of financial commitments. This capacity
is not significantly vulnerable to foreseeable events.

 

A High credit quality. ‘A’ ratings
denote expectations of low credit risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless,
be more vulnerable to adverse business or economic conditions than is the case for higher ratings.

 

BBB Good credit quality. ‘BBB’
ratings indicate that expectations of credit risk are currently low. The capacity for payment of financial commitments is considered adequate,
but adverse business or economic conditions are more likely to impair this capacity.

 

BB Speculative. ‘BB’ ratings indicate
an elevated vulnerability to credit risk, particularly in the event of adverse changes in business or economic conditions over time; however,
business or financial alternatives may be available to allow financial commitments to be met.

 

B Highly speculative. ‘B’ ratings
indicate that material credit risk is present.

 

CCC Substantial credit risk. ‘CCC’
ratings indicate that substantial credit risk is present.

 

CC Very high levels of credit risk. ‘CC’
ratings indicate very high levels of credit risk.