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Commentary Alternative Strategies Fund Fourth Quarter 2019 Commentary

The Litman Gregory Masters Alternative Strategies Fund (Institutional Share Class) gained 1.91% in the fourth quarter of 2019. During the same period, the Morningstar Multialternative category was up 1.65% and 3-month LIBOR returned 0.54%. For the full year, the fund was up 8.52% while the category and 3-month LIBOR were up 7.53% and 2.61%, respectively.

Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. To obtain the performance of the funds as of the most recently completed calendar month, please visit Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced. The gross and net expense ratios can be found in the most recent Summary Prospectus (4/30/2019).

Quarterly Review

The Alternative Strategies Fund returned 1.91% for the quarter. This gain resulted in full-year 2019 performance of 8.52%. This is the second-highest calendar-year return since the fund’s inception over eight years ago, trailing only the 9.41% gain achieved in 2012 when the fund benefited from the tailwind of extremely cheap non-agency residential mortgage-backed securities (NA RMBS). It is also a gratifying bounce-back from the slight negative performance in 2018 and was achieved without taking undue risk. Considering the myriad macro perils present, along with what we would consider quite stretched U.S. equity valuations and compressed credit spreads, we believe maintaining a generally cautious posture was (and is still) warranted.

As usual, our managers were selectively opportunistic, and the fund did benefit somewhat from a broad-based recovery in many asset classes. All things considered, we are pleased with the absolute performance, but more so when considering the relatively low level of risk assumed to produce it.

All five managers were positive during the quarter (and the year), which we don’t expect to always be the case, but we won’t complain too loudly when it happens. Despite the positive quarterly return for all, there was wide divergence in performance (as there should be for strategies that have differing return drivers). FPA achieved the highest performance, which is consistent with having the most equity market exposure in a strong quarter for the stock market, while DoubleLine posted the lowest return in the fourth quarter, but the second-highest for the year, continuing as a consistently strong performer. Although FPA was the largest contributor, the fund’s performance for the year was broad-based, with three managers producing returns (net of advisory fee) of more than 8% on their capital, and four managers contributing over one percentage point to the fund’s 2019 return.

Lest we alarm consistent readers of our quarterly attribution reports by sounding too upbeat, we note that despite the fund’s solid year, it slightly trailed the core bond index’s (Bloomberg Barclays U.S. Aggregate Bond Index, the “Agg”) surprisingly strong return of 8.7%, as Treasury yields dropped sharply on the year thanks to the Federal Reserve’s (The Fed’s) U-turn. Since inception, however, the fund’s cumulative return is over 70% more than the Agg with similar volatility and a slightly negative correlation.

We also prefer the fund’s risk/return profile compared to the Agg’s effective duration of almost 6 and yield of only about 2.3%. But in any given year, good investment decisions and sound portfolio construction can be trumped by simply owning duration and credit beta. While there are no guarantees in life or markets, we don’t expect this to be the case very frequently from the current starting point.

In closing, we would like to highlight to fellow shareholders that during the year, with the cooperation of our outstanding sub-advisors, we were able to reduce the fund’s fees significantly. The adjusted expense ratio (before variable investment related expenses) is now 1.28%. This is down from 1.47% prior to the fee reduction. (The net expense ratio, which includes investment expenses like shorting and interest expenses, was 1.36% at year-end, down from 1.54%.) We have always tried to provide a very strong and distinctive investment option at a very competitive fee, and we are happy to be able to improve the value proposition further through this fee reduction.

Litman Gregory Masters Alternative Strategies Fund Risk/Return Statistics 12/31/19 MASFX Bloomberg
Agg Bond
Multi-Alternatives Category
HFRX Global Hedge Fund Russell 1000
Annualized Return4.762.951.901.8115.91
Total Cumulative Return46.7427.1316.8115.94237.98
Annualized Std. Deviation3.122.883.393.6211.48
Sharpe Ratio (Annualized)1.270.790.370.321.29
Beta (to Russell 1000)0.23-
Correlation of MASFX to…1.00-0.120.800.720.78
Worst Drawdown-6.94-4.52-8.21-10.82-17.42
Worst 12-Month Return-4.49-2.47-6.08-8.19-7.21
% Positive 12-Month Periods0.870.780.770.670.95
Upside Capture (vs. Russell 1000)28.047.6821.6021.08100.00
Downside Capture (vs. Russell 1000)23.46-11.6536.8036.40100.00
Since inception (9/30/11).
Worst Drawdown based on weekly returns
Past performance is no guarantee of future results

Quarterly Portfolio Commentary

Performance of Managers

For the quarter, all five sub-advisors produced positive returns. FPA’s Contrarian Opportunity strategy returned 5.47%, the Water Island Arbitrage and Event-Driven strategy gained 2.12%, DCI’s Long-Short Credit strategy increased by 1.28%, the Loomis Sayles Absolute Return strategy gained 1.16%, and the DoubleLine Opportunistic Income strategy returned 0.60%. (All returns are net of the management fee charged to the fund.)

Key performance drivers and positioning by strategy

DCI: The credit default swap (CDS) and bond sleeves both contributed about equally to the returns over the quarter, as well as for the year. Net beta effects were a small negative contributor, with the portfolio hedges performing as expected and the moves in the underlying credit (positive) and rates (negative) mostly offsetting. By design the portfolio construction is always focused on asset selection—favoring firms with lower default risk (as measured by DCI’s proprietary default probability model) and improving fundamentals—and is constructed to be roughly neutral to credit beta, which was underlined by the strategy performance in the divergent environments this year.

Market sentiment was strong over the quarter on rising expectations for a U.S.-China trade deal and some early signs of pick-up from the global manufacturing dip. Equities ended the period up more than 8 percentage points, oil prices soared 13%, and the VIX Index remained low. Longer-term yields climbed on the better news and the yield-curve steepened, with the U.S. 10-year Treasury yield ending the quarter up about 25 basis points (bps). High-yield credit spreads narrowed by about 42 bps.

Security-selection alpha in the portfolio delivered broad and steady gains over the quarter, rising each of the three months, and was well-balanced across the CDS and bond sleeves. Positioning in steel, rentals, and media led the way, with an added boost from longs in insurance, technology, and real estate investment trusts (REITS) and shorts in equipment and utilities, while the consumer segments (long durables and short retailers) contributed to partially offsetting losses.

DCI’s positioning rotated somewhat over the quarter, with a notable move from long to short in technology, and some closing of the short bias in resources and the long in non-bank financials. Their model now sees attractive short positions in retailers and technology against longs in media, finance companies, and insurance. As always, the credit selection portfolio favors improving fundamentals and strong credit quality.

DoubleLine: For the fourth quarter of 2019, the portfolio’s 0.6% gain outperformed the Bloomberg Barclays U.S. Aggregate Bond Index return of 0.18%. The yield curve steepened over this time period as 2-year U.S. Treasury rates declined 5 bps but 10-year U.S. Treasury rates rose 25 bps. The portfolio consistently maintained a shorter duration and higher yield than the index, which contributed to the quarter’s outperformance. In terms of sector performance, the best-performing allocations were bank loans, collateralized loan obligations (CLOs), and NA RMBS. Bank loans and CLOs benefited from an improving rate outlook after the Federal Reserve signaled that they were unlikely to provide any additional rate cuts over the next 12 months. The NA RMBS segment performed well thanks to low delinquency rates and strong investor demand.

The only sector within the portfolio that underperformed the index during the quarter was emerging-market corporate bonds. This sector benefited from a weakening U.S. dollar but suffered from some idiosyncratic credit events, causing its quarterly return to be roughly flat. The strategy ended the quarter with a duration of approximately 4.6 and a yield to maturity of 5.1%.

FPA: The portfolio performed well during the quarter, gaining over 5%, although it trailed the return of the U.S. equity market’s sharp fourth quarter performance of over 9% (which is not surprising given the portfolio’s lower risk exposure).

New long positions throughout the quarter included Alibaba equity, and credit exposures in McDermott International (letter of credit and delayed draw term loan), MediaCo Holding and Murray Energy (delayed draw term loans). There were no material increases to existing positions during the quarter.

New short exposures included index/sector shorts in the iShares Core S&P 500 ETF, iShares Russell 1000 ETF, iShares Dow Jones Financial Services ETF, Vanguard Financials ETF, and the Vanguard Utilities ETF, which were essentially replacements for short positions in ETFs with similar exposures where the portfolio managers were able to take tax losses.

Positions that were trimmed by more than 25% included Meggitt, Mohawk, and a number of financials (CIT Group, Jefferies Financial, LPL Financial, Signature Bank). In a related move, the short position in the SPDR Regional Banking ETF was cut back. The managers sold out of Mylan and the short-term loan to Barneys New York was paid off and the company liquidated.

FPA’s largest sector concentration remains in financials (despite some reductions in several positions), with communication services, information technology, and industrials following. These four sectors comprise over half of the equity portfolio. With volatility returning to the market, the portfolio managers continue to search for high-quality value opportunities. They also still view high-yield bonds as unattractive given historically low yields and spreads to Treasuries. However, private credit remains an area of active interest and modest investment activity. Gross long exposure to equities is 65.8% and net exposure is approximately 59.3%. Credit holdings are 4.9% of assets, while cash is approximately 34.9%.

Loomis Sayles: The Absolute Return strategy gained over 1% during the quarter. Investment grade (IG) corporates, including the ones held largely as reserves, contributed positively. Financial, consumer non-cyclical, and technology issues had the largest positive impact. A continuation of accommodative Fed policy and the search for yield, particularly among foreign investors, have been supportive of performance in fixed-income. The portfolio managers modestly reduced IG exposure during the quarter, expecting spreads to remain range bound and dominated by central bank actions. While the default outlook remains favorable, the investment team remains focused on idiosyncratic stories within the asset class.

High-yield corporate bonds were also contributors to performance as spreads tightened over the quarter. Ongoing central bank support, a relatively strong consumer, and the search for yield supported the sector. Consumer and technology issues were the major contributors. Persistent softness in manufacturing data and Brexit remain as macro risks, but the increasing likelihood of a trade deal between the United States and China represented a significant change in the macro risk landscape. Despite this, the continued trade policy uncertainty, along with interest rate volatility, and the prospect of the withdrawal of central bank stimulus, make a higher-volatility regime likely. The Loomis team sees little potential for further credit spread tightening, though they do expect defaults to remain low. While maintaining allocations to areas they like fundamentally, the team will likely steer the high-yield portfolio to a slightly higher average credit quality.

Emerging-market fixed-income assets posted solid results for the quarter as U.S. Treasury yields rose and credit spreads tightened. Although exposure in the portfolio was modest (<5%), it was a positive factor in quarterly performance, with Brazilian, Chinese, and Chilean names providing the most impact. Meanwhile, the allocation to income-yielding equities detracted from performance during the quarter. Consistent with most of the rest of the year, much of the negative performance can be attributed to energy-related longs and the S&P 500 futures hedge.

Water Island: The merger-arbitrage sleeve of the portfolio was the primary driver of returns, contributing 216 bps (with the overwhelming majority from equity-based merger arbitrage and a tiny fraction from credit-based merger arbitrage). Special situations also contributed to returns, adding 18 bps in performance (almost entirely from credit special situations).

The top contributor in the portfolio for the fourth quarter was a position in the merger between Allergan and AbbVie. In June 2019, Allergan and AbbVie—both U.S.-based pharmaceutical companies—announced their intent to merge, continuing a years-long trend of consolidation in the pharmaceutical industry. Under the terms of the agreement, AbbVie will pay $85.0 billion in cash and stock to acquire Allergan. In the fourth quarter, Allergan shareholders approved the transaction and another large pharmaceutical merger—Bristol-Myers Squibb’s acquisition of Celgene—was approved by U.S. regulators, giving the arbitrage community comfort that the divestitures proposed in the Allergan/AbbVie deal would satisfy regulators. These developments led to compression in the deal spread and gains for the portfolio during the quarter. Regulatory approvals from the European Union (EU) and the Federal Trade Commission were still pending as of year-end and Water Island expects the transaction to close in early 2020.

Conversely, the top detractor for the quarter was a special situations position in Axalta Coating Systems, a U.S.-based manufacturer and supplier of auto and industrial coatings. In June 2019, reports emerged that Axalta was in talks to review strategic options, including a potential sale of the company. The investment is predicated on the thesis that there are two paths to profit, regardless of whether a transaction comes to fruition or not. First, if an acquisition is announced, Water Island believes it will be at a premium in the range of 10%–15% above where shares currently trade. Second, if the company abandons its sale process, shares should re-rate higher as the company’s peers have rallied in the months since rumors emerged, while Axalta shares stalled due to the overhang of a potential acquisition. While the latter scenario may result in a longer timeline than a merger and acquisition (M&A) announcement and greater near-term volatility (which could be a potential buying opportunity), Water Island believes the company would be fairly valued in a range similar to the estimated 10%–15% takeout premium. In October, Axalta shares traded off when press reports suggested a takeover of the company would not result in a significant premium to the then current trading price, leading to small mark-to-market losses in the position. In December however, the company postponed its regularly held annual guidance call, which could be related to ongoing M&A discussions. For now, with both a sale and the re-rating scenario still on the table, Water Island believes downside in the position is limited, but they continue to monitor the situation and will likely trade opportunistically around it.

At the end of the third quarter of 2019, stemming from a U.S.-China trade war filled with intransigence and a Brexit process replete with dysfunction, prevailing opinion would have had one thinking a U.S. recession was imminent. Uncertainty and fears that valuations had peaked spread throughout the investing community. What a difference three months makes: President Trump messaged favorable developments in trade negotiations throughout the fourth quarter—most recently claiming he would sign a preliminary deal with China on January 15—and Prime Minister Boris Johnson won a decisive majority in the U.K. general election, all but assuring the United Kingdom’s exit from the EU within the next several months. By year-end, investors rotated into cyclical and value names, pushing U.S. equities to record highs, and Goldman Sachs economists nearly declared the U.S. economy recession-proof.

Newly announced deal flow stagnated in the third quarter amidst the widespread uncertainty. With some perceived clarity around trade and Brexit, consolidation activity swiftly resumed. By the end of the year, over $4 trillion in M&A transactions had been announced, essentially on par with the prior year’s total. With much of Europe in “wait and see” mode for the bulk of 2019 due to Brexit uncertainty, the vast majority of activity stemmed from the United States. Mega deals—that is, transactions valued at $10 billion or greater—were also a significant contributor to 2019 activity (accounting for 31% of total volume—the highest percentage on record according to Dealogic data). Water Island anticipates overall levels of deal flow to remain healthy throughout 2020, though there may be pockets of subdued activity in certain sectors (for example, in health care, where corporations may elect to hold off on making deals until they have further clarity on the Democratic primary and U.S. elections later in 2020). Private equity (PE) should continue to spur activity, with the amount of unspent cash at PE firms reaching an all-time high of $1.5 trillion by some measures, about half of which is earmarked for acquisitions in North America.

On the regulatory front, concerns around the security and privacy of user data have come to the forefront. Most notably, Google’s pending acquisition of Fitbit has experienced volatility on concerns that regulators may view Google as a less diligent steward of sensitive health data and attempt to block the transaction. In addition, the United Kingdom’s Competition and Markets Authority continues to expand its reach and take a more active role in the M&A approval process as Britain gets closer to exiting the EU.

At quarter-end, the portfolio’s allocation continued to be heavily weighted toward harder catalyst events. In the current environment of high valuations, low volatility, and ample macro risks, Water Island intends to be opportunistic around softer catalyst special situations. Although they see ample opportunity in this area, with a pipeline of spinoffs already announced for 2020 and healthy news flow around speculated M&A situations, these types of investments will likely become more attractive from a risk/reward perspective if the market experiences a pullback or encounters increased volatility.

In the meantime, the managers have found several attractive opportunities to overweight merger-arbitrage positions in definitive, announced transactions where the team sees avenues to profit through tangential catalysts even in the event of a deal break. As always, they will actively manage risk, attempting to isolate the portfolio from external forces as much as possible in order to generate returns based on the outcomes of idiosyncratic corporate events rather than the direction of broader markets.

Strategy Allocations

The fund’s capital is allocated according to its strategic target allocations: 25% to DoubleLine, 19% each to DCI, Loomis Sayles, and Water Island, and 18% to FPA. We use the fund’s daily cash flows to bring the manager allocations toward their targets when differences in shorter-term relative performance cause divergences.

Sub-Advisor Portfolio Composition as of December 31, 2019
(Exposures may not add up to total due to rounding)

DCI Long-Short Credit Strategy

Bond Portfolio Top 5 Sector Long Exposures as of 12/31/19
Consumer Discretionary17.9%
High Tech10.9%
Consumer Non-Discretionary9.9%
CDS Portfolio Statistics: LongShort
Number of Issuers9376
Average Credit Duration (yrs.)4.74.7
Spread88 bps97 bps

DoubleLine Opportunistic Income Strategy

Sector Exposures as of 12/31/19
Agency Inverse Floaters7.0%
Agency Inverse Interest-Only5.5%
Agency CMO8.5%
Agency PO2.6%
Collateralized Loan Obligations5.8%
Commercial MBS9.7%
Bank Loan5.3%
Emerging Markets5.1%
High Yield/Other0.2%
Non-Agency Residential MBS48.5%

FPA Contrarian Opportunity Strategy

Asset Class Exposures as of 12/31/19
U.S. Stocks44.5%
Foreign Stocks21.4%
Bonds and Loans5.0%
Limited Partnerships0.8%
Short Sales-6.5%

Loomis Sayles Absolute-Return Fixed-Income Strategy
Exposures as of 12/31/19

Long Total Short Total Net Exposure
Investment-Grade Corp.34.9%-0.6%34.4%
High-Yield Corporate8.2%0.0%8.2%
Emerging Market3.8%0.0%3.8%
Bank Loans3.2%0.0%3.2%
Dividend Equity1.9%-0.1%1.8%
Global Credit0.9%0.0%0.9%
Global Rates2.3%-3.0%-0.7%
Risk Management0.0%-1.1%-1.1%
Cash & Equivalents10.1%0.0%10.1%

Water Island Arbitrage and Event-Driven Strategy
Sub-Strategy Long Exposures as of 12/31/19

Long Short Net
Merger Arbitrage – Equity74.2%-10.5%63.7%
Merger Arbitrage – Credit6.9%-0.3%6.6%
Total Merger-Related81.0%-10.8%70.3%
Special Situations – Equity1.9%-0.7%1.2%
Special Situations – Credit2.7%-0.1%2.6%
Total Special-Situations4.7%-0.8%3.8%


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The fund’s investment objectives, risks, charges, and expenses must be considered carefully before investing. The statutory and summary prospectus contains this and other important information about the investment company, and it may be obtained by calling 1-800-960-0188. Read it carefully before investing.

Although the managers actively manage risk to reduce portfolio volatility, there is no guarantee that the fund will always maintain its targeted risk level, especially over shorter time periods and loss of principal is possible. The performance goals are not guaranteed, are subject to change, and should not be considered a predictor of investment return. All investments involve the risk of loss and no measure of performance is guaranteed. The fund aims to deliver its return over a full market cycle, which is likely to include periods of both up and down markets.

Though not an international fund, the fund may invest in foreign securities. Investing in foreign securities exposes investors to economic, political and market risks, and fluctuations in foreign currencies. Investments in debt securities typically decrease when interest rates rise. This risk is usually greater for longer-term debt securities. Investments in mortgage-backed securities include additional risks that investor should be aware of including credit risk, prepayment risk, possible illiquidity, and default, as well as increased susceptibility to adverse economic developments. Investments in lower-rated and non-rated securities present a greater risk of loss to principal and interest than higher-rated securities. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management, and the risk that a position could not be closed when most advantageous. The fund may make short sales of securities, which involves the risk that losses may exceed the original amount invested. Multi-investment management styles may lead to higher transaction expenses compared to single investment management styles. Outcomes depend on the skill of the sub-advisors and advisor and the allocation of assets amongst them.

Investing in derivatives could lose more than the amount invested. The fund may make short sales of securities, which involves the risk that losses may exceed the original amount invested. Merger arbitrage investments risk loss if a proposed reorganization in which the fund invests is renegotiated or terminated.

Diversification does not assure a profit nor protect against loss in a declining market.

Leverage may cause the effect of an increase or decrease in the value of the portfolio securities to be magnified and the fund to be more volatile than if leverage was not used.

Alpha is an annualized return measure of how much better or worse a fund’s performance is relative to an index of funds in the same category, after allowing for differences in risk.

Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.

Correlation is a statistical measure of how two securities move in relation to each other.

Credit Default Swap (CDS) A credit default swap (CDS) is a financial derivative or contract that allows an investor to “swap” or offset their credit risk with that of another investor. For example, if a lender is worried that a borrower is going to default on a loan, the lender could use a CDS to offset or swap that risk.

Duration is a commonly used measure of the potential volatility of the price of a debt security, or the aggregate market value of a portfolio of debt securities, prior to maturity. Securities with a longer duration generally have more volatile prices than securities of comparable quality with a shorter duration.

basis point is a value equaling one on-hundredth of a percent (1/100 of 1%)

Collateralized Loan Obligation (CLO) is a security backed by a pool of debt, often low-rated corporate loans. Collateralized loan obligations (CLOs) are similar to collateralized mortgage obligations, except for the different type of underlying loan.

Market capitalization (or market cap) is the total value of the issued shares of a publicly traded company; it is equal to the share price times the number of shares outstanding.

Mortgage-backed security (MBS) is a type of asset-backed security that is secured by a mortgage or collection of mortgages.

Mortgage Real Estate Investment Trusts mREITs deal in investment and ownership of property mortgages; they loan money for mortgages to owners of real estate, or purchase existing mortgages or mortgage-backed securities.

Standard deviation is a statistical measure of the historical volatility of a mutual fund or portfolio, usually computed using 36 monthly returns.

Sharpe ratio is the measure of a fund’s return relative to its risk. The Sharpe ratio uses standard deviation to measure a fund’s risk-adjusted returns. The higher a fund’s Sharpe ratio, the better a fund’s returns have been relative to the risk it has taken on. Because it uses standard deviation, the Sharpe ratio can be used to compare risk-adjusted returns across all fund categories.

A short sale is the sale of an asset or stock the seller does not own.  It is generally a transaction in which an investor sells borrowed securities in anticipation of a price decline; the seller is then required to return an equal number of shares at some point in the future. Contrastingly, a seller owns the security or stock in a long position.

Upside/downside capture is a statistical measure that shows whether a given fund has outperformed–gained more or lost less than–a broad market benchmark during periods of market strength and weakness, and if so, by how much.

The Bloomberg Barclays Aggregate Bond Index is a market capitalization-weighted index, meaning the securities in the index are weighted according to the market size of each bond type. Most U.S. traded investment grade bonds are represented. The index includes US Treasury Securities (non TIPS), Government agency bonds, Mortgage backed bonds, Corporate bonds, and a small amount of foreign bonds traded in U.S.

LIBOR stands for London Interbank Offered Rate. It’s an index that is used to set the cost of various variable-rate loans.

The Russell 1000 Index measures the performance of the large-cap segment of the U.S. equity universe. It includes approximately 1000 of the largest securities based on a combination of their market cap and current index membership. The Russell 1000 represents approximately 92% of the U.S. market.

The HFRX Global Hedge Fund Indexis designed to be representative of the overall composition of the hedge fund universe. It is comprised of all eligible hedge fund strategies; including but not limited to convertible arbitrage, distressed securities, equity hedge, equity market neutral, event driven, macro, merger arbitrage, and relative value arbitrage.

The VIX Index is a trademarked ticker symbol for the Chicago Board Options Exchange Market Volatility Index, a popular measure of the implied volatility of S&P 500 index options. Often referred to as the fear index or the fear gauge, it represents one measure of the market’s expectation of stock market volatility over the next 30 day period.

You cannot invest directly in an index.

Each Morningstar Category Average represents a universe of Funds with similar investment objectives. As of December 31, 2019, the Morningstar Multialternative Category average expenses were 2.00% gross and 1.59% net.

Fund holdings and/or sector allocations are subject to change at any time and are not recommendations to buy or sell any security.

As of December 31, 2019, the Litman Gregory Alternative Strategies Fund’s top 10 holdings were:

TIFFANY + CO 0.75%

Any tax or legal information provided is merely a summary of our understanding and interpretation of some of the current income tax regulations and it is not exhaustive. Investors must consult their tax advisor or legal counsel for advice and information concerning their particular situation. Neither the Funds nor any of its representatives may give legal or tax advice.

Mutual fund investing involves risk. Principal loss is possible.

Litman Gregory Fund Advisors, LLC has ultimate responsibility for the performance of the iMGP Funds due to its responsibility to oversee the funds’ investment managers and recommend their hiring, termination, and replacement.

The iMGP Funds are Distributed by ALPS Distributors, Inc. LGM000903 exp. 4/30/2020