Global Defensive Equity

Atlas Capital Advisors LLC (the Portfolio Manager) uses a proprietary framework to evaluate expected returns, market sentiment and risks for the single country and US sector indices, which together comprise the global equity market. Based on this assessment, the Portfolio Manager adjusts the weight of portfolio holdings towards the countries and sectors with more favorable characteristics and away from those with less favorable characteristics. When the overall assessment of the risk/return profile of equity markets is favorable, the Portfolio Manager expects the portfolio to be fully invested in equity markets (which is generally the case over 75% of the time). If global economic data worsens and a substantial portion of the global equity market exhibits undesirable characteristics, the Portfolio Manager expects to de-risk the Strategy by allocating a portion of the Strategy to short-term fixed income. The degree of de-risking is a function of the proportion of the global equity market with an unfavorable assessment. The proportion of the Strategy’s investment in equities may go as low as 80% in the most negative scenario. The Strategy uses a consistent, systematic approach with a foundation in academic and Portfolio Manager proprietary research. The benchmark for the Strategy is the FTSE Global All Cap Net Tax (US Regulated Investment Company) Index. (1) Invest Globally: - Diversification across geographic markets provides the opportunity to benefit when there are attractive markets outside the home country. (2) Create alpha from beta management: - Return of any equity market index (the equity beta) can be achieved dynamically and cheaply via ETFs. - Additional return (alpha) can be generated from systematic beta management – informed choices about which stock markets to own and avoid. Generating alpha from beta management is often under-appreciated and under-utilized by investors. (3) Take risk where it is more likely to be rewarded: - Examine valuation, momentum, growth, risk and currency for each market. Allocate the risk budget primarily to favorable markets. (4) Defend against losses: - When too many equity markets turn bad, and the global economy is worsening, move assets to short-term fixed income to avoid losses for investors.

(1) Index assessment: Evaluate fifty-one segments of the global stock market (thirty-seven country indices, eleven US sector indices, international small cap, US small and mid-cap). Evaluation based on valuation, momentum, growth, risk and currency. (2) Economic assessment: The Portfolio Manager continually updates a dataset of the important economic data from the world’s largest economies and evaluates whether global economic data are improving or deteriorating, on average. (3) Allocation decision: Index and economic assessments lead to decision on equity weight in strategy (usually 100%) (4) Portfolio Weighting: Within the equity allocation of the Strategy, the weight to countries and sectors is set relative to the market capitalization weight of the benchmark, with more favorable indices given more weight than the benchmark and the less favorable indices with weights below the benchmark.

The portfolio is typically rebalanced monthly, using the process described above.

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