Investment Strategy

In seeking to achieve its objective, the Fund invests primarily in common stocks of U.S. companies which Hillman Capital Management, Inc. (the “Advisor”) believes have qualitative and quantitative competitive advantages, as described below, and have temporarily fallen out of favor for reasons that are considered non-recurring or short-term; whose value is not currently well known; or whose value is not fully recognized by the public. As a matter of investment policy, the Fund will invest so that, under normal circumstances, at least 80% of the value of its total net assets is invested in publicly traded equity securities of various issuers, including common stock, preferred stock, and securities that may be converted into or are exercisable for common or preferred stock.

In selecting investments for the Fund, the Advisor first looks at qualitative measures of a company. Qualitative measures of a company include:

- dominance in a particular industry or niche market;
- management style and adaptability;
- strength of pricing and purchasing power;
- barriers to industry competition;
- strength of brand or franchise with commensurate brand loyalty; and
- quality of products and services.

If certain companies meet most or all of the qualitative measures, the Advisor then seeks to identify which of those companies possess certain positive quantitative measures and which of those companies the Advisor feels show superior prospects for growth. The Advisor may make investments without regard to market capitalization. These companies may, in the view of the Advisor, exhibit positive changes such as a promising new product, new distribution strategy, new manufacturing technology, new management team, or new management philosophy. These companies may also be responsible for technological breakthroughs and/or unique solutions to
market needs.

The quantitative measures of a company include:

- price-to-book ratio;
- present value of discounted projected cash flows;
- balance sheet strength;
- price-to-sales ratio;
- and price-to-earnings ratio.

The Advisor allocates a target percentage of total portfolio value to each security it purchases. Under normal market conditions, the Advisor intends to be fully invested in equities with the portfolio comprised of approximately 20 stocks. From time to time, the Fund may also focus the Fund’s assets in securities of one or more particular sectors of the economy and may at times invest more than 25% of the Fund’s net assets in a particular sector, such as the financial, healthcare, retail, and technology sectors. The Advisor may sell a portfolio holding if the Advisor believes that the price of the security is overvalued or to rebalance the security to the Advisor’s targeted percentage of total portfolio value for that security.