Note 1 – Organization
Bridgehampton Value Strategies Fund (the ‘‘Fund’’) was organized as a non-diversified series of Investment Managers Series Trust, a Delaware statutory trust (the “Trust”) which is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund’s primary investment objective is to seek higher returns and lower volatility than the S&P 500 Index over a 3-5 year time horizon. The Fund commenced investment operations on June 29, 2012.
The Fund commenced operations on June 29, 2012, prior to which its only activity was the receipt of a $1,000 investment from principals of the Fund’s advisor and a $19,753,858 transfer of the Fund in exchange for the net assets of the Bridgehampton Multi-Strategy Fund, LLC., a Delaware limited liability company (the “Company”). This exchange was nontaxable, whereby the Fund issued 790,180 shares for the net assets of the Company on June 29, 2012. Cash and the investment portfolio of the Company with a fair value of $21,331,274 on long securities and $3,153,865 on securities sold short (identified cost of investment transferred were $21,199,781 on long securities and $2,987,831 on securities sold short) were the primary assets received by the Fund. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received from the Company was carried forward to align ongoing reporting of the Fund’s realized and unrealized gains and losses with amount distributable to shareholders for tax purposes.
Note 2 – Accounting Policies
The following is a summary of the significant accounting policy consistently followed by the Fund in the preparation of its financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates.
(a) Valuation of Investments
The Fund values equity securities at the last reported sale price on the principal exchange or in the principal over the counter (“OTC”) market in which such securities are traded, as of the close of regular trading on the NYSE on the day the securities are being valued or, if there are no sales, at the mean between the last available bid and asked prices on that day. Securities traded on the NASDAQ are valued at the NASDAQ Official Closing Price (“NOCP”). All other types of securities, including restricted securities and securities for which market quotations are not readily available, are valued at fair value as determined in accordance with procedures established in good faith by the Board of Trustees. Short-term securities with remaining maturities of sixty days or less are valued at amortized cost, which approximates market value.
A Fund’s assets generally are valued at their market value. If a market quotation is not readily available for a portfolio security, the security will be valued at fair value (the amount which the Fund might reasonably expect to receive for the security upon its current sale) as determined in good faith by the Fund’s advisor, subject to review and approval by the Valuation Committee, pursuant to procedures adopted by the Board of Trustees. The actions of the Valuation Committee are subsequently reviewed by the Board at its next regularly scheduled board meeting. The Valuation Committee meets as needed. The Valuation Committee is comprised of all the Trustees but action may be taken by any one of the Trustees.
(b) Options
The Fund may write or purchase options contracts primarily to enhance the Fund’s returns and reduce volatility. In addition, the Fund may utilize options in an attempt to generate gains from option premiums or to reduce overall portfolio risk. When the Fund writes or purchases an option, an amount equal to the premium received or paid by the Fund is recorded as a liability or an asset and is subsequently adjusted to the current market value of the option written or purchased. Premiums received or paid from writing or purchasing options which expire unexercised are
Bridgehampton Value Strategies Fund
NOTES TO SCHEDULE OF INVESTMENTS - Continued
November 30, 2012 (Unaudited)
treated by the Fund on the expiration date as realized gains or losses. The difference between the premium and the amount paid or received on affecting a closing purchase or sale transaction, including brokerage commissions, is also treated as a realized gain or loss. If an option is exercised, the premium paid or received is added to the cost of the purchase or proceeds from the sale in determining whether the Fund has realized a gain or a loss on investment transactions. The Fund, as writer of an option, may have no control over whether the underlying securities may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the security underlying the written option. The Fund, as a purchaser of an option, bears the risk that the counterparties to the option may not have the ability to meet the terms of the option contracts.
(c) Short Sales
Short sales are transactions under which the Fund sells a security it does not own. To complete such a transaction, the Fund must borrow the security to make delivery to the buyer. The Fund then is obligated to replace the security borrowed by purchasing the security at the market price at the time of 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 dividend or interest that accrue during the period of the loan which is recorded as an expense on the Statement of Operations. To borrow the security, the Fund also may be required to pay a premium or an interest fee, which would decrease proceeds 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. A gain, limited to the price at which the Fund sells the security short, or a loss, potentially unlimited in size, will be recognized upon the closing of a short sale. The Fund may not always be able to borrow a security or to close out a short position at a particular time or at an acceptable price. If the price of the borrowed security increases between the date of the short sale and the date on which the Fund replaces the security, the Fund will experience a loss. The Fund’s loss on a short sale is limited only by the maximum attainable price of the security (which could be limitless) less the price the Fund paid for the security at the time it was borrowed.
(d) Foreign Currency Translation
The Fund’s records are maintained in U.S. dollars. The value of securities, currencies and other assets and liabilities denominated in currencies other than U.S. dollars are translated into U.S. dollars based upon foreign exchange rates prevailing at the end of the reporting period. The currencies are translated into U.S. dollars by using the exchange rates quoted prior to when the Fund’s net asset value is next determined. Purchases and sales of investment securities, income and expenses are translated on the respective dates of such transactions.
The Fund does not isolate that portion of its net realized and unrealized gains and losses on investments resulting from changes in foreign exchange rates from the impact arising from changes in market prices. Such fluctuations are included with net realized and unrealized gain or loss from investments and foreign currency.
Net realized foreign currency transaction gains and losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the differences between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency translation gains and losses arise from changes in the value of assets and liabilities, other than investments in securities, resulting from changes in the exchange rates.
(e) Investment Transactions, Investment Income and Expenses
Investment transactions are accounted for on the trade date. Realized gains and losses on investments are determined on the identified cost basis. Dividend income is recorded net of applicable withholding taxes on the ex-dividend date and interest income is recorded on an accrual basis. Withholding taxes on foreign dividends have been provided for in accordance with the company’s understanding of the applicable country’s tax rules and rates. Discounts or premiums on debt securities are accreted or amortized to interest income over the lives of the respective
Bridgehampton Value Strategies Fund
NOTES TO SCHEDULE OF INVESTMENTS - Continued
November 30, 2012 (Unaudited)
securities using the effective interest method. Expenses incurred by the Trust with respect to more than one fund are allocated in proportion to the net assets of each fund except where allocation of direct expenses to each fund or an alternative allocation method can be more appropriately made.
The Fund incurred offering costs of approximately $45,029, which are being amortized over a one-year period from June 29, 2012 (commencement of operations).
In conjunction with the use of short sales the Fund may be required to maintain collateral in various forms. At November 30, 2012 such collateral is denoted in the Fund’s Schedule of Investments.
(f) Federal Income Taxes
The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its net investment income and any net realized gains to its shareholders. Therefore, no provision is made for federal income or excise taxes. Due to the timing of dividend distributions and the differences in accounting for income and realized gains and losses for financial statement and federal income tax purposes, the fiscal year in which amounts are distributed may differ from the year in which the income and realized gains and losses are recorded by the Fund.
Accounting for Uncertainty in Income Taxes
(the “Income Tax Statement”) requires an evaluation of tax positions taken (or expected to be taken) in the course of preparing a Fund’s tax returns to determine whether these positions meet a “more-likely-than-not” standard that, based on the technical merits, have a more than fifty percent likelihood of being sustained by a taxing authority upon examination. A tax position that meets the “more-likely-than-not” recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statements of Operations.
The Income Tax Statement requires management of the Fund to analyze tax positions taken in the prior three open tax years, if any, and tax positions expected to be taken in the Fund’s current tax year, as defined by the IRS statute of limitations for all major jurisdictions, including federal tax authorities and certain state tax authorities. As of and during the period ended November 30, 2012, the Fund did not have a liability for any unrecognized tax benefits. The Fund has no examination in progress and is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
(g) Distributions to Shareholders
The Fund will make distributions of net investment income and capital gains, if any, at least annually. Distributions to shareholders are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.
The character of distributions made during the year from net investment income or net realized gain may differ from the characterization for federal income tax purposes due to differences in the recognition of income, expense and gain (loss) items for financial statement and tax purposes. Where appropriate, reclassifications between net asset accounts are made for such differences that are permanent in nature.
Note 3 – Investment Advisory and Other Agreements
The Trust, on behalf of the Fund, entered into an Investment Advisory Agreement (the “Agreement”) with Bridgehampton Capital Management LLC (the “Advisor”). Under the terms of the Agreement, the Fund pays a monthly investment advisory fee to the Advisor at the annual rate of 1.50% of the Fund’s average daily net assets. The Advisor has contractually agreed to waive its fee and, if necessary, to absorb other operating expenses in order to limit total annual operating expenses (excluding taxes, leverage interest, brokerage commissions, dividend and interest
Bridgehampton Value Strategies Fund
NOTES TO SCHEDULE OF INVESTMENTS - Continued
November 30, 2012 (Unaudited)
expenses on short sales, acquired fund fees and expenses as determined in accordance with Form N-1A, expenses incurred in connection with any merger or reorganization, or extraordinary expenses such as litigation) to 1.99% of average daily net assets of the Fund. This agreement is effective until December 31, 2013 and is subject thereafter to annual re-approval of the agreement by the Advisor and the Trust’s Board of Trustees. This agreement may be terminated with the consent of the Trust’s Board of Trustees.
For the period June 29, 2012 (commencement of operations) through November 30, 2012, the Advisor waived $67,272 of its advisory fees. The Advisor may recover from the Fund fees and/or expenses previously waived and/or absorbed, if the Fund’s expense ratio, including the recovered expenses, falls below any current expense limit. The Advisor is permitted to seek reimbursement from the Fund for a period of three fiscal years following the fiscal year in which such reimbursements occurred. At November 30, 2012, the amount of these potentially recoverable expenses was $67,272.
Grand Distribution Services, LLC (“GDS”) serves as the Fund’s distributor; UMB Fund Services, Inc. (“UMBFS”), an affiliate of GDS, serves as the Fund’s fund accountant and co-administrator; and Mutual Fund Administration Corporation (“MFAC”) serves as the Fund’s other co-administrator. UMBFS also serves as the Fund’s transfer agent and UMB Bank, n.a., an affiliate of UMBFS, serves as the Fund’s custodian. On January 1, 2013, IMST Distributors, LLC, (“IMST Distributors”) will succeed GDS as the Distributors to the Funds. IMST Distributors is not affiliated with the Trust or any of its service providers.
Certain trustees and officers of the Trust are employees of UMBFS or MFAC. The Fund does not compensate trustees and officers affiliated with the Fund’s co-administrators. For the period ended November 30, 2012, the Fund’s allocated fees incurred for Trustees who are not affiliated with the Fund’s co-administrators are reported on the Statement of Operations.
Cipperman & Co. provides Chief Compliance Officer (“CCO”) services to the Trust. The Fund’s allocated fees incurred for CCO services for the period ended November 30, 2012, are reported on the Statement of Operations.
Note 4 – Federal Income Taxes
At November 30, 2012, the cost of securities and proceeds from securities sold short, on a tax basis and gross unrealized appreciation and depreciation on investments and securities sold short for federal income tax purposes were as follows:
Cost of investments
|
|
$
|
28,876,530
|
|
|
|
|
|
|
Proceeds from securities sold short
|
|
$
|
(4,646,765
|
)
|
|
|
|
|
|
Gross unrealized appreciation
|
|
$
|
2,648,383
|
|
Gross unrealized depreciation
|
|
|
(2,013,865
|
)
|
|
|
|
|
|
Net unrealized appreciation (depreciation) on investments and securities sold short
|
|
$
|
634,518
|
|
The difference between cost amounts for financial statement and federal income tax purposes is due primarily to timing differences in recognizing certain gains and losses in security transactions.
Note 5 –
Investment Transactions
For the period June 29, 2012 (commencement of operations) through November 30, 2012, purchases and sales of investments, excluding short-term investments, were $10,748,127 and $6,745,670, respectively.
Bridgehampton Value Strategies Fund
NOTES TO SCHEDULE OF INVESTMENTS - Continued
November 30, 2012 (Unaudited)
Note 6 – Indemnifications
In the normal course of business, the Fund enters into contracts that contain a variety of representations which provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. However, the Fund expects the risk of loss to be remote.
Note 7 – Fair Value Measurements and Disclosure
Fair Value Measurements and Disclosures
defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosure about fair value measurements. It also provides guidance on determining when there has been a significant decrease in the volume and level of activity for an asset or liability, when a transaction is not orderly, and how that information must be incorporated into a fair value measurement.
Under
Fair Value Measurements and Disclosures
, various inputs are used in determining the value of the Fund’s investments. These inputs are summarized into three broad Levels as described below:
|
·
|
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
|
|
·
|
Level 2 – Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
|
|
·
|
Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
|
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different Levels of the fair value hierarchy. In such cases, for disclosure purposes, the Level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest Level input that is significant to the fair value measurement in its entirety.
In addition, the Fund has adopted Accounting Standards Update No. 2011-04
Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs
which amends
Fair Value Measurements and Disclosures
to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and International Financial Reporting Standards. Enhanced disclosure is required to detail any transfers in to and out of Level 1 and Level 2 measurements and Level 2 and Level 3 measurements and the reasons for the transfers.
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities. The following is a summary of the inputs used, as of November 30, 2012, in valuing the Fund’s assets carried at fair value:
Bridgehampton Value Strategies Fund
NOTES TO SCHEDULE OF INVESTMENTS - Continued
November 30, 2012 (Unaudited)
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
2
|
|
|
Total
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stocks
1
|
|
$
|
16,403,337
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
16,403,337
|
|
Corporate Bonds
|
|
|
-
|
|
|
|
8,925,845
|
|
|
|
-
|
|
|
|
8,925,845
|
|
Exchange-Traded Funds
|
|
|
946,485
|
|
|
|
-
|
|
|
|
-
|
|
|
|
946,485
|
|
Purchased Options Contracts
|
|
|
422,265
|
|
|
|
-
|
|
|
|
-
|
|
|
|
422,265
|
|
Warrants
|
|
|
-
|
|
|
|
1,588
|
|
|
|
-
|
|
|
|
1,588
|
|
Short-Term Investments
|
|
|
2,965,914
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,965,914
|
|
Total Assets
|
|
$
|
20,738,001
|
|
|
$
|
8,927,433
|
|
|
$
|
-
|
|
|
$
|
29,665,434
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities Sold Short
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stocks
1
|
|
$
|
1,676,733
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,676,733
|
|
Exchange-Traded Funds
|
|
|
2,104,750
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,104,750
|
|
U.S. Treasury Securities
|
|
|
-
|
|
|
|
1,020,469
|
|
|
|
-
|
|
|
|
1,020,469
|
|
Total Liabilities
|
|
$
|
3,781,483
|
|
|
$
|
1,020,469
|
|
|
$
|
-
|
|
|
$
|
4,801,952
|
|
1
|
All common stocks held in the Fund are Level 1 securities. For a detailed break-out of common stocks by major industry classification, please refer to the Schedule of Investments.
|
2
|
The Fund did not hold any Level 3 securities at period end.
|
There were no transfers between Levels at period end.
Note 8 – Recently Issued Accounting Pronouncements
In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-11
Disclosures about Offsetting Assets and Liabilities
. The amendments in this ASU require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The ASU is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The guidance requires retrospective application for all comparative periods presented. Management is currently evaluating the impact ASU 2011-11 will have on the financial statement disclosures.
Bridgehampton Value Strategies Fund
SUPPLEMENTAL INFORMATION (Unaudited)
Board Consideration of Investment Advisory Agreement
(Unaudited)
At in-person meetings held on March 14-15, 2012 and June 20-21, 2012, the
Board of Trustees (the “
Board
”) of Investment Managers Series Trust (the “
Trust
”), including the trustees who are not “interested persons” of the Trust (the “
Independent Trustees
”) as defined in the Investment Company Act of 1940, as amended (the “
1940 Act
”), reviewed and unanimously approved the Investment Advisory Agreement (the “
Advisory
Agreement
”) between the Trust and Bridgehampton Capital Management LLC (the “
Investment Advisor
”) with respect to the Bridgehampton Value Strategies Fund
series of the Trust
(the “
Fund
”) for an initial two-year term. In approving the Advisory Agreement, the Board of Trustees, including the Independent Trustees, determined that approval of the Advisory Agreement is in the best interests of the Fund and its shareholders.
Background
In advance of the meeting, the Board
received information about the Fund and the Advisory Agreement from the Investment Advisor and from Mutual Fund Administration Corporation (“
MFAC
”) and UMB Fund Services, Inc., the Trust’s co-administrators, certain portions of which are discussed below.
The materials, among other things, included information about the Investment Advisor’s organization and financial condition; information regarding the background and experience of relevant personnel who would be providing services to the Fund and their compensation structure; a report comparing the proposed management fee and the estimated total expenses of the Fund compared to those of a group of comparable funds selected by Morningstar, Inc. from its multi alternative universe (the “
Peer Group
”); information about
the Investment Advisor’s
policies and procedures, including its code of ethics and compliance manual; and the performance of a private investment fund that was managed using the same strategy the Investment Advisor would use to manage the Fund (the “
MS
Fund
”). The Board also received a memorandum from the independent legal counsel to the Independent Trustees discussing the legal standards
under the 1940 Act and other applicable law
for their consideration of the proposed Advisory Agreement.
Before voting on the Advisory Agreement, the Independent Trustees met in
a private session with counsel at which no representatives of the Investment Advisor were present
.
In approving the Advisory Agreement, the Board and the Independent Trustees considered a variety of factors, including those discussed below. In their deliberations, the Board and the Independent Trustees did not identify any particular factor that was controlling, and each Trustee may have attributed different weights to the various factors. The Board also considered information given to them by representatives of the Investment Advisor in a presentation on the Investment Advisor’s investment philosophy, strategy and process at the Board meeting. The Board reviewed the materials and various matters concerning the Investment Advisor and the Fund.
Nature, Extent and Quality of Services
In reviewing the proposed investment advisory agreement for the proposed Fund, the Board discussed, among other things, the nature, extent and quality of the services to be provided by the Investment Advisor with respect to the Fund, as well as the qualifications, experience and responsibilities of the personnel who would be involved in the activities of the Fund. The Board also considered information included in the meeting materials regarding the performance of the MS Fund, which the Investment Advisor proposed to reorganize into the Fund, and noted that although the MS Fund had significantly underperformed compared to the S&P 500 Index in 2011 and slightly underperformed in 2006, the MS Fund had significantly outperformed the Index in 2007, 2008, 2009, 2010 and 2011. Based on its review, the Board and the Independent Trustees concluded that the Investment Advisor has the capabilities, resources and personnel necessary to manage the Fund.
Advisory Fee and Expense Ratio
With respect to the advisory fees expected to be paid by the Fund, the Board noted the meeting materials indicated that the advisory fees proposed to be paid by the Fund were higher than the median advisory fee of the funds in the Peer Group. The Trustees discussed with the Investment Advisor the possible implementation of advisory fee breakpoints; although the Investment Advisor did not wish to implement fee breakpoints in advance
Bridgehampton Value Strategies Fund
SUPPLEMENTAL INFORMATION (Unaudited)
of the commencement of the Fund’s operations, the Trustees determined that they could revisit the issue once the Fund commenced operations and the Fund’s assets had grown. The Board noted that the advisory fees paid by the MS Fund include a performance-based fee and are therefore generally higher than the advisory fees to be paid by the Fund. The Board also considered that although the proposed total expenses for the Fund were higher than the median expenses of the funds in the Peer Group, there were a number of funds with total expenses that were either higher than or very close to the Fund’s proposed total expenses. The Board and the Independent Trustees concluded that the proposed compensation payable to the Investment Advisor under the Advisory Agreement would be fair and reasonable in light of the services proposed to be provided by the Investment Advisor to the Fund.
Profitability and Economies of Scale
The Board also considered information relating to the estimated profitability to the
Investment Advisor
of its relationship with the Fund in its first year of operations, noting that
the Investment Advisor
anticipated waiving a portion of its advisory fees during that year, and determined that the estimated profitability was reasonable. The Board noted that during the Fund’s startup period, its asset levels would likely be too low to achieve significant economies of scale and that the matter of such economies would be reviewed in the future as Fund assets grow.
Conclusion
Based on these and other factors, the Board and the Independent Trustees concluded that approval of the Advisory Agreement is in the best interests of the Fund and its shareholders and, accordingly, approved the Advisory Agreement.
Bridgehampton Value Strategies Fund
For the Periods Ended November 30, 2012 (Unaudited)
Expense Example
As a shareholder of the Bridgehampton Value Strategies Fund (the “Fund”), you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Actual Performance example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from 6/29/12* to 11/30/12.
The Hypothetical (5% annual return before expenses) example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from 6/1/12 to 11/30/12.
Actual Expenses
The information in the row titled “Actual Performance” of the table below provides actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the appropriate row under the column titled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The information in the row titled “Hypothetical (5% annual return before expenses)” of the table below provides hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (load) or contingent deferred sales charges. Therefore, the information under the headings “Hypothetical (5% annual return before expenses)” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
|
Beginning
Account Value
|
Ending
Account Value
|
Expenses
Paid During Period
|
|
6/29/12*
|
11/30/12
|
6/29/12* – 11/30/12
|
Actual Performance**
|
$ 1,000.00
|
$ 1,057.20
|
$ 11.04
|
|
6/1/12
|
11/30/12
|
6/1/12 – 11/30/12
|
Hypothetical (5% annual return before expenses)^
|
$ 1,000.00
|
$ 1,014.26
|
$ 12.77
|
*
|
Commencement of Operations.
|
**
|
Expenses are equal to the Fund’s annualized expense ratio of 1.07% multiplied by the average account value over the period, multiplied by 155/365 (to reflect the since inception period). The expense ratio reflects an expense waiver. Assumes all dividends and distributions were reinvested.
|
^
|
Expenses are equal to the Fund’s annualized expense ratio of 1.07% multiplied by the average account value over the period, multiplied by 183/365 (to reflect the six month period). The expense ratio reflects an expense waiver. Assumes all dividends and distributions were reinvested.
|