485BPOS 1 milestone485b.htm GemCom, LLC


Securities Act Registration No. 333 -20635

Investment Company Act Registration No. 811 -08037


FORM N-1A

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549


REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933


Pre-Effective Amendment No.___

o

 


Post-Effective Amendment No. 63

x


and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY

ACT OF 1940


Amendment No.     64

x


ADVISORONE FUNDS

4020 South 147th Street

Omaha, NE 68137

(402) 493-3313

 Brian Nielsen, Secretary


Copies to:

 

 

James Ash, Esq

JoAnn Strasser,Esq.

Vice President Legal Administration

Thompson Hine LLP

Gemini Fund Services, LLC

41 South High Street, 17th floor

450 Wireless Blvd.

Columbus, Ohio 43215

Hauppauge, New York 11788-0132

 


It is proposed that this filing will become effective:

   

 

 

[ x ]

immediately upon filing pursuant to Rule 485, paragraph (b)

[   ]

on _______________ pursuant to Rule 485, paragraph (b)

[ ]

60 days after filing pursuant to Rule 485, paragraph (a) (i)

[   ]

on [date] pursuant to Rule 485, paragraph (a) (i)

[   ]

75 days after filing pursuant to Rule 485, paragraph (a) (ii)

[   ]

pursuant to Rule 485, paragraph (a) (ii)

[   ]

this post-effective amendment designates a new effective date for a previously filed post-effective amendment.

  

If appropriate, check the following box:

o  This post-effective amendment designates a new effective date for a previously filed post-effective amendment.


EXPLANATORY NOTE This Post-Effective Amendment No. 6 3 to the Registration Statement contains Prospectus es and Statement of Additional Information describing the Milestone Treasury Obligations Fund a series of the Registrant. This Post-Effective Amendment to the Registration Statement is organized as follows: (a) Prospectus es relating to the Milestone Treasury Obligations Fund (b) Statement of Additional Information relating to the Milestone Treasury Obligations Fund ; and (c) Part C Information relating to all series of the Registrant. The Prospectus and Statements of Additional Information for the other series of the Registrant are not affected hereby.




ADVISORONE FUNDS


Milestone Treasury Obligations Fund


Institutional

Class

Shares

MTIXX


PROSPECTUS January 20, 2012

As Amended March 19, 2012

4020 S. 147th Street

Omaha, NE 68137

www.advisoronefunds.com

(866) 811-0225




This Prospectus provides important information about the Fund that you should know before investing.  Please read it carefully and keep it for future reference.



These securities have not been approved or disapproved by the Securities and Exchange Commission nor has the Securities and Exchange Commission passed upon the accuracy or adequacy of this Prospectus.  Any representation to the contrary is a criminal offense.





TABLE OF CONTENTS

 

FUND SUMMARY

1

ADDITIONAL INFORMATION ABOUT
PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

3

Investment Strategies

3

Investment Risks

4

MANAGEMENT

4

Investment Adviser

4

Investment Adviser Portfolio Manager

5

HOW SHARES ARE PRICED

5

HOW TO PURCHASE SHARES

5

HOW TO REDEEM SHARES

7

TAX STATUS, DIVIDENDS AND DISTRIBUTIONS

9

FREQUENT PURCHASES AND REDEMPTIONS OF SHARES

10

HOUSEHOLDING

10

FINANCIAL HIGHLIGHTS

11

Privacy Notice

12




FUND SUMMARY


Investment Objective:

The Treasury Obligations Fund is a money market fund that seeks to provide its shareholders with the maximum current income that is consistent with the preservation of capital and the maintenance of liquidity.


Fees and Expenses of the Fund:

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.


Shareholder Fees
(fees paid directly from your investment)

Institutional
Class
Shares

Maximum Sales Charge (Load) Imposed on Purchases (as a % of offering price)

None

Maximum Deferred Sales Charge (Load)

None

Maximum Sales Charge (Load) Imposed on Reinvested Dividends

None

Redemption Fee

None

Exchange Fee

None

Annual Fund Operating Expenses
(expenses that you pay each year

as a percentage of the value of your investment)

 

Management Fees

0.10%

Distribution (12b-1) Fees

None

Other Expenses

0.24%

         Shareholder Servicing Fees

0.10%

         Remaining Other Expenses

0.14%

Total Annual Fund Operating Expenses

0.34%

Fee Waiver and Expense Reimbursements*

(0.14)%

Total Annual Fund Operating Expenses After Fee Waivers and Expense Reimbursements

0.20%

*The Fund's adviser has contractually agreed to waive its fees and/or reimburse expenses of the Fund, at least until March 31, 2013, to ensure that Total Annual Fund Operating Expenses After Fee Waiver and Reimbursement (exclusive of any taxes, interest, brokerage commissions, dividend expense on securities sold short, acquired fund fees and expenses, or extraordinary expenses such as litigation or reorganization costs) will not exceed 0.20% of the Fund’s average daily net assets for Institutional Class Shares of the Fund.  Additionally, the Fund's adviser has contractually agreed to waive its fees and/or reimburse expenses of the Fund, at least until March 31, 2013 to ensure that the daily yield will be at least zero for Institutional Class Shares of the Fund.   These fee waivers and expense reimbursements are subject to possible recoupment from the Fund in future years on a rolling three-year basis (within the three years after the fees have been waived or reimbursed) if such recoupment can be achieved within the foregoing expense limits.  These agreements may be terminated only by the Fund's Board of Trustees, on 60 days written notice to the Fund's adviser.


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 remain the same.  Although your actual costs may be higher or lower, based upon these assumptions your costs would be:


Year

Institutional Class Shares

1

$20

3

$95

5

$177

10

$417



Principal Investment Strategies:

As a fundamental policy, which cannot be changed without shareholder approval, the Fund invests only in:

 

·

U.S. Treasury obligations maturing in 397 days or less.

·

Repurchase agreements fully collateralized by U.S. Treasury obligations.

The Fund may invest in U.S. Treasury obligations or repurchase agreements without limit. Although the Fund intends to be fully invested in these instruments, it may hold a de minimis amount of cash for a short period prior to investment or payment of the proceeds of redemption.

The Fund will maintain an average maturity computed on a dollar-weighted basis of 60 days or less and a dollar-weighted average life of 120 days or less.

Principal Investment Risks:

Although the Fund invests in short-term Treasury obligations, an investment in the Fund is subject to risk even if all securities in the Fund are paid in full at maturity. All money market instruments, including U.S. Treasury obligations, can change in value in response to changes in interest rates, and a major change in rates could cause the share price to change. While U.S. Treasury obligations are backed by the full faith and credit of the U.S. government, an investment in the Fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation, U.S. government or any other government agency. Thus, while the Fund seeks to maintain a stable net asset value of $1.00 per share, there is no assurance that it will do so. It is possible to lose money by investing in the Fund.  If the seller of a repurchase agreement in which the Fund invests defaults on its obligation or declares bankruptcy, the Fund may experience delays in selling the securities underlying the repurchase agreement. As a result, the Fund may incur losses arising from a decline in the value of those securities, reduced levels of income, and expenses of enforcing its rights.


Performance:

The following bar chart and tables below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund from year to year and by showing how the Fund's average annual returns for one, five and ten years compare with those of a broad measure of market performance. Performance for the period prior to January 20, 2012 is that of the Treasury Obligations Portfolio, a series of The Milestone Funds, the predecessor of the Fund. Past performance (before and after taxes) does not necessarily indicate how the Fund will perform in the future. Updated performance information for AdvisorOne Funds is available at no cost by visiting www.advisoronefunds.com or by calling 1-866-811-0225.


Annual Returns for Years Ended December 31,

[institutionalshares004.gif]


Best Quarter

December 31, 2006

1.29%

Worst Quarter

March 31, 2011

0.00%*

                                                                                                                                * Less than 0.005%







Average Annual Total Returns

(For the periods ended December 31, 2011)


 

1 Year

5 years

10 Years

Institutional Class Shares

0.01%

1.32%

1.82%

Lipper U.S. Treasury Money Market Funds Index

0.01%

1.12%

1.46%

The Institutional Class Shares' seven-day current yield on December 3 0 , 2011 was 0.01%.


Investment Adviser:  CLS Investments, LLC.


Portfolio Manager:  Marc Pfeffer, Senior Portfolio Manager of the adviser serves as Portfolio Manager of the Fund.  Except for a three-year period during which Mr. Pfeffer worked at Bear Stearns & Co. Inc. (2001-2003), he has been the Portfolio Manager of the Fund, and its predecessor, since 1994.


Purchase and Sale of Fund Shares:  You may purchase and redeem shares of the Fund on any day that the New York Stock Exchange is open for trading, subject to certain restrictions described in the section titled "How Shares Are Priced" of the Fund's Prospectus.  


Purchases and redemptions may be made by mailing an application or redemption request to AdvisorOne Funds c/o Gemini Fund Services, LLC, 4020 South 147th Street, Suite 2, Omaha, Nebraska 68137, by calling 1-866-811-0225 or by visiting the Fund's website www.advisoronefunds.com.  You also may purchase and redeem shares through a financial intermediary.  


The minimum initial investment for Institutional Class Shares is $10,000,000; provided, that shareholders of funds that are a series of AdvisorOne Funds are not subject to any minimum initial investment when they sell such shares to exchange the proceeds for Institutional Class Shares.  There is no minimum subsequent investment.


Tax Information:  Dividends and capital gain distributions you receive from the Fund are taxable to you as either ordinary income or capital gains tax rates unless you are investing through a tax-free account.  However, these dividend and capital gain distributions may be taxable upon their eventual withdrawal from tax-deferred plans.


Payments to Broker-Dealers and Other Financial Intermediaries:  If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the 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 the Fund over another investment.  Ask your salesperson or visit your financial intermediary's web site for more information.


ADDITIONAL INFORMATION ABOUT PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

INVESTMENT OBJECTIVE

The Treasury Obligations Fund is a money market fund that seeks to provide its shareholders with the maximum current income that is consistent with the preservation of capital and the maintenance of liquidity.  The Fund's investment objective may be changed without shareholder approval by the Fund's Board of Trustees upon 60 days written notice to shareholders.


PRINCIPAL INVESTMENT STRATEGIES

U.S. Treasury obligations are securities issued by the United States Treasury, such as Treasury bills, notes and bonds that are fully guaranteed as to payment of principal and interest by the United States government.

Repurchase agreements are transactions in which the Fund purchases a security and simultaneously commits to resell that security to the seller at an agreed-upon price on an agreed-upon future date, normally one-to-seven days later. The resale price reflects a market rate of interest that is not related to the coupon rate or maturity of the purchased security.

The Fund enters into repurchase agreements with dealers that the adviser believes present minimal credit risks in accordance with guidelines established by the Board of Trustees of AdvisorOne Funds (the "Board"). The adviser monitors the credit-worthiness of sellers under the Board's general supervision. If a seller defaults on its repurchase obligation, however, the Fund might suffer a loss.

The Fund will make no investment unless the adviser first determines that the investment is eligible for purchase and presents minimal credit risks, pursuant to procedures adopted by the Board. The Fund's investments are subject to the restrictions imposed by Rule 2a-7 under the Investment Company Act of 1940, as amended.

The Fund may purchase U.S. Treasury obligations on a when-issued or forward commitment basis. The Fund may also invest up to 5% of its net assets in illiquid securities. Each of these investment techniques and their related risks are described in detail in the Statement of Additional Information.

PRINCIPAL INVESTMENT RISKS

If the seller of a repurchase agreement in which the Fund invests defaults on its obligation or declares bankruptcy, the Fund may experience delays in selling the securities underlying the repurchase agreement. As a result, the Fund may incur losses arising from a decline in the value of those securities, reduced levels of income, and expenses of enforcing its rights.


TEMPORARY DEFENSIVE POSITIONS

Under abnormal market or economic conditions, the Fund temporarily may hold up to 100% of its investable assets in cash. The Fund may also, under such circumstances, invest in other investment companies. For temporary or emergency purposes, the Fund may borrow up to 33 1/3% of its total assets. When taking such temporary positions, the Fund may not achieve its investment objective.

PORTFOLIO HOLDINGS DISCLOSURE

The Fund will disclose its complete portfolio holdings monthly on its website at www.advisoronefunds.com.  Additionally, the Fund discloses its complete portfolio holdings as of the end of its second fiscal quarter (May 31st) and its fiscal year (November 30th) in its reports to shareholders. The Fund sends reports to its existing shareholders no later than 60 days after the relevant fiscal period, and files these reports with the Securities and Exchange Commission (the "SEC") by the 70th day after the end of the relevant fiscal period.

The Fund files its complete portfolio holdings as of the end of its first and third fiscal quarters (February 28/29 and August 31, respectively) with the SEC on Form N-Q no later than 60 days after the relevant fiscal period.

You can find these filings on the SEC's website, www.sec.gov.

The Statement of Additional Information also describes the policies and procedures that relate to the disclosure of the Fund's portfolio holdings.


MANAGEMENT


Investment Adviser


CLS Investments, LLC ("CLS"), a Nebraska limited liability company, serves as investment adviser to the Fund. CLS (including its predecessor) has been an investment adviser to individuals, employee benefit plans, trusts, investment companies, and corporations since 1989. As of June 30, 2011, CLS managed approximately $9 billion in assets under management.  CLS maintains its principal offices at 4020 South 147th Street, Omaha, Nebraska 68137. CLS is an affiliate of Gemini Fund Services, LLC and Northern Lights Distributors, LLC.


Under the terms of its investment advisory agreement, CLS is responsible for formulating the Fund's investment program and for making day-to-day investment decisions and engaging in portfolio transactions. CLS also furnishes officers, provides office space, services and equipment and supervises all matters relating to the Fund's operations.


The Fund pays CLS a monthly fee at the annualized rate (expressed as a percentage of the Fund's average daily net assets) of 0.10%.


CLS has agreed to defer its advisory fee and reimburse Fund expenses to limit total operating expenses at least through March 31, 2013, so that direct expenses do not exceed 0.20% of the average daily net assets of Institutional Class shares of the Fund.  Additionally, the Fund's adviser has contractually agreed to waive its fees and/or reimburse expenses of the Fund, at least until March 31, 2013, to ensure that the daily yield will be at least zero for Institutional Class shares of the Fund.


Any deferral and reimbursement may be recouped by CLS from the Fund, to the extent that overall expenses fall below the preceding class-specific limits, within three years of when the amounts were deferred or reimbursed, including with respect to amounts waived or reimbursed by the predecessor fund's adviser pursuant to its expense limitation agreement with the predecessor fund.


Investment Adviser Portfolio Manager

Marc Pfeffer joined the adviser as a Senior Portfolio Manager in August 2011.  Previously, Mr. Pfeffer served as Chief Investment Officer of Milestone Capital Management, LLC ("Milestone") since 2004.  Mr. Pfeffer has over 23 years of money market fund investment experience and in addition to serving as Chief Investment Officer, was also head of the portfolio management and the research team at the predecessor Fund's adviser.  Before joining Milestone, Mr. Pfeffer was with Bear, Stearns & Co. Inc. and Goldman Sachs Asset Management ("GSAM").  At GSAM Mr. Pfeffer was responsible for managing six institutional money market portfolios which grew to over $3 billion in total assets as of November 1994. Mr. Pfeffer's portfolio management experience and expertise encompass all aspects of institutional money market fund management, including: portfolio composition and structure; liquidity credit analysis and risk management; compliance review and monitoring; fund administration, accounting, operations and controls.  Mr. Pfeffer holds a BS in Finance from the State University of New York at Buffalo, and an MBA from Fordham University.

The Fund's investment advisory agreement with the adviser is subject to the Board's annual review and approval.  A discussion regarding the basis for the Board's most recent approval of the advisory agreement on August 3, 2011 can be found in the December 20, 2011 Prospectus/Proxy Statement filed by AdvisorOne Funds with the SEC on December 23, 2011.


HOW SHARES ARE PRICED


The net asset value per share of the Fund is determined at 5:00 p.m. (Eastern Time) on each Fund Business Day. The net asset value is determined by subtracting total liabilities from total assets and dividing the remainder by the number of shares outstanding. The Fund's securities are valued at their amortized cost which does not take into account unrealized gains or losses on securities. This method involves initially valuing an instrument at its cost and thereafter assuming a constant amortization to maturity of any Investor paid or accreting discount received. The amortized cost method minimizes changes in the market value of the securities held by the Fund and helps it maintain a stable price of $1.00 per share.


HOW TO PURCHASE SHARES


Types of Accounts


If you are making an initial investment in the Fund, you will need to open an account. You may establish the following types of accounts:


·

Individual or Joint Ownership.  One person owns an individual account while two or more people own a joint account. We will treat each individual owner of a joint account as authorized to give instructions on purchases, sales and exchanges of shares without notice to the other owners. However, we will require each owner's signature guarantee for any transaction requiring a signature guarantee.


·

Gift or Transfer to Minors.  A Custodian maintains a Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) account for the benefit of a minor. To open an UGMA or UTMA account, you must include the minor's social security number on the application.


·

Trust.  A trust can open an account. You must include the name of each trustee, the name of the trust and the date of the trust agreement on the application.


·

Corporations, Partnerships and Other Legal Entities.  Corporations, partnerships and other legal entities may also open an account. A general partner of the partnership or an authorized officer of the corporation or other legal entity must sign the application and resolution form.


·

Retirement.  If you are eligible, you may set up your account under a tax-sheltered retirement plan, such as an Individual Retirement Account (IRA) or Roth IRA, Rollover IRA, SEP-IRA, SIMPLE IRA, Keogh Account, or other retirement plan. Your financial consultant can help you determine if you are eligible.


Shareholder Services


The Board has adopted a Shareholder Services Plan, which provides that AdvisorOne Funds (the “Trust”), on behalf of the Fund, may obtain the services of certain financial institutions, broker-dealers, and other financial intermediaries to act as shareholder servicing agents for their customers.  For these services, the Trust may pay the shareholder servicing agent a fee, up to the amount indicated below, based upon the average daily net assets of the shares owned by investors for which the shareholder servicing agent maintains a servicing relationship. Payments under the Shareholder Services Plan may vary and are determined by the Trust in its sole discretion, in amounts up to the amount indicated below.



Fees

Institutional Class Shares

Shareholder Servicing Fees

0.10%


Because these shareholder service fees are paid out of the Fund's assets on an ongoing basis, such fees may, over time, increase the cost of investing in the Fund.  Pursuant to the 1940 Act, you will have exclusive voting rights with respect to the Plan for Institutional Class Shares.


ADDITIONAL SHARE CLASSES

In addition to the Institutional Class Shares, the Fund also offers Financial Class Shares, Investor Class Shares and Premium Class Shares by separate prospectuses. For further information about these other classes of shares, please call (866) 811-0225.


Purchasing Shares


Good Order:  When making a purchase request, make sure your request is in good order.  "Good order" means your purchase request includes:


·

the name of the Fund

·

the dollar amount of shares to be purchased

·

a completed purchase application or investment stub

·

check payable to the applicable Fund


The minimum initial investment for Institutional Class Shares is $10,000,000.  However, shareholders of funds that are a series of AdvisorOne Funds are not subject to any minimum initial investment when they sell such shares to exchange the proceeds for Milestone Treasury Obligations Fund, Institutional shares.


AdvisorOne Funds or CLS may waive or lower the minimum in certain cases. You must complete and sign an application for each account you open.


The Fund and the Distributor each reserves the right to reject any purchase for any reason and to cancel any purchase due to non-payment. You must make all purchases in United States dollars and draw all checks on United States banks. If we cancel your purchase due to non-payment, you will be responsible for any loss the Fund incurs. We will not accept cash or third-party checks for the purchase of shares.


Method of Purchase


Purchase Procedures

 

 

Through a Financial Professional

Contact your financial consultant. Your financial consultant can tell you the time by which you must submit your order to begin receiving dividends that day. Your Financial Consultant must transmit the order to the Fund before 5:00 p.m. Eastern time).

 

 

Through Brokers

The Distributor authorizes certain securities dealers, banks or other financial service firms (collectively, "brokers") to purchase your shares. To receive that day's share price:

·

you must place your order with the broker before 5:00 p.m. Eastern time.

 

 

By Mail

To purchase Shares, send your completed application to:

AdvisorOne Funds

c/o Gemini Fund Services, LLC

4020 South 147th Street, Suite 2

  

Omaha, NE 68137                 

 Include with your application your check, payable to "AdvisorOne Funds"

 

 

By Wire

If you wish to wire money to make a subsequent investment in the Fund, please call 1-866-811-0225 for wiring instructions and to notify the Fund that a wire is coming.  Any commercial bank can transfer same-day funds by wire.  The Fund will normally accept wired funds for investment on the day received if they are received by the Fund's designated bank before the close of regular trading on the NYSE. Your bank may charge you for wiring same-day funds.

 

 

By Telephone     

You may make subsequent purchases in your account by telephoning 1-866-811-0225 between 8:30 a.m. and 5:00 p.m. Eastern time on any day the Fund is open. We will electronically transfer money from the bank account you designate on your Application to our account with AdvisorOne Funds. This investment option is only available if you have not declined or cancelled your telephone investment privilege.

 

 

IMPORTANT NOTES

Once you have requested a telephone transaction, and a confirmation number has been assigned, the transaction cannot be revoked. We reserve the right to refuse any purchase request.


HOW TO REDEEM SHARES


You have the right to sell ("redeem") all or any part of your shares subject to certain restrictions. Selling your shares in the Fund is referred to as a "redemption" because the Fund buys back its shares. We will redeem your shares at the NAV next computed following receipt of your redemption request in good order. See Redemption Procedures Request in Good Order.


We will mail your redemption proceeds to your address of record or transmit them electronically to your designated bank account. Except under certain extraordinary conditions, we will send your redemption to you within seven days after we receive your redemption request. If you purchase shares by check and, soon after, request a redemption, your redemption request will not be processed until the check used for your purchase has cleared (usually within 10 days).


The Fund cannot accept requests that specify a certain date for redemption or which specify any other special conditions.  Redemption proceeds must be payable to the registered shareholder(s) of the account or to a financial intermediary for the benefit of the registered shareholder(s) of the account.  Please call 1-866-811-0225 for further information.  We will not process your redemption request if it is not in good order.  We will notify you if your redemption request is not in good order.


If, as a result of your redemption, your account value drops below $2,500, we may redeem the remaining shares in your account.  We will notify you in writing of our intent to redeem your shares.  We will allow at least sixty days thereafter for you to make an additional investment to bring your account value up to at least the minimum amount before we will process the redemption.


Medallion Signature Guarantees


Your redemption request must be accompanied by a "medallion signature guarantee" under certain circumstances, such as sending the redemption proceeds to an address other than the address of record.


Third Party Transactions


If you buy and redeem shares of the Fund through a member of the Financial Industry Regulatory Authority, Inc. that member may charge a fee for that service.  The Fund has authorized one or more brokers to accept on its behalf purchase and redemption orders. Such brokers are authorized to designate intermediaries to accept orders on the Fund's behalf. The Fund will be deemed to have received the order when an authorized broker or a broker authorized designee accepts your order. Your order will be priced at the Fund's net asset value next computed after it is received by the authorized broker or broker authorized designee.


CLS may pay certain financial institutions (which may include banks, brokers, securities dealers and other industry professionals) a fee for providing distribution related services and/or for performing certain administrative and servicing functions for Fund shareholders and/or making the funds available for purchase on their platforms.  These payments are made from CLS and are not charged to the Fund, unless part of an approved Plan.


Redemptions in Kind


The Fund reserves the right to honor requests for redemption or repurchase orders by making payment in whole or in part in readily marketable securities ("redemption in kind") if the amount of such a request is large enough to affect operations (for example, if the request is greater than $250,000 or 1% of the Fund's assets). The securities will be chosen by the Fund and valued at the Fund's net asset value. A shareholder may incur transaction expenses in converting these securities to cash.


Method of

Redemption


Redemption Procedures

 

 

By Telephone     



You may authorize redemption of some or all shares in your account with the Fund by telephoning the Fund at 1-866-811-0225 between 8:30 a.m. and 5:00 p.m. Eastern time on any day the Fund is open.


You will NOT be eligible to use the telephone redemption service if you:

·

have declined or canceled your telephone investment privilege;

·

wish to redeem shares valued at $50,000 or greater or if you ask us to send the redemption proceeds to an address other than the address of record for the account;

·

must provide supporting legal documents such as a signature guarantee for redemption

·

have an account set up as a corporation, trust or partnership; or

·

wish to redeem from a retirement account.

 

 

By Mail         

If you are redeeming Shares, you may send your redemption request to:

AdvisorOne Funds

c/o Gemini Fund Services, LLC

4020 South 147th Street, Suite 2

Omaha, NE 68137

 

You must include the following information in your written request:

·

a letter of instruction stating the name of the Fund, the number of shares you are redeeming, the names in which the account is registered and your account number;

·

other supporting legal documents, if necessary, for redemption requests by corporations, trusts and partnerships;

·

a signature guarantee, if necessary.

 

 

By Wire          

You may request your redemption proceeds be wired directly to the bank account designated on your application. The Fund's transfer agent will charge you a $10.00 fee for each wire redemption. The transfer agent will deduct the fee directly from your account. Your bank may also impose a fee for the incoming wire.

 

 

Request in "Good Order"

For our mutual protection, all redemption requests must include:

·

your account number;

·

the amount of the transaction;

·

for mail request, signatures of all owners EXACTLY as registered on the account and signature guarantees, if required (signature guarantees can be obtained at most banks, credit unions, and licensed brokers); and

·

any supporting legal documentation that may be required.


Your redemption request will be processed at the next determined share price after we have received all required information.

 

 

IMPORTANT NOTE

Once we have processed your redemption request, and a confirmation number has been given, the transaction cannot be revoked.



Options For Redemption Proceeds


You may receive your redemption proceeds by check or by wire.


Check Redemptions:  Normally we will mail your check within two business days of a redemption.


Wire Redemptions:  Before you can receive redemption proceeds by wire, you must establish this option by completing a special form or the appropriate section of your account application.


You may request that your redemption proceeds be wired directly to your bank account.  AdvisorOne Funds' transfer agent imposes a $10.00 fee for each wire redemption and deducts the fee directly from your account.  Your bank may also impose a fee for the incoming wire.  The redemption proceeds must be paid to the same bank and account as designated on the application or in written instructions in proper form subsequently received by AdvisorOne Funds.


Telephone Redemptions and Exchanges  


We will automatically establish the telephone redemption option for your account, unless you instruct us otherwise in writing. Telephone redemptions are easy and convenient, but this account option involves a risk of loss from unauthorized or fraudulent transactions. We will take reasonable precautions to protect your account from fraud. You should do the same by keeping your account information private and by reviewing immediately any account statements and confirmations that you receive. Please contact us immediately about any transaction you believe to be unauthorized.


AdvisorOne Funds reserves the right to refuse a telephone redemption or exchange if the caller cannot provide:

 

·

the account number

·

the name and address exactly as registered on the account

·

the primary social security or employer identification number as registered on the account


We may also require a password from the caller.


AdvisorOne Funds will not be responsible for any account losses due to telephone fraud, so long as we have taken reasonable steps to verify the caller's identity. If you wish to cancel the telephone redemption feature for your account, please notify us in writing.


HOW TO EXCHANGE SHARES


The exchange privilege is a convenient way to buy shares in another fund in order to respond to changes in your investment goals or in market conditions. You may exchange your Institutional Class Shares for Class N shares of any fund that is a series of AdvisorOne Funds without paying any sales charge.


If you establish a new account by exchange, the exchanged shares must have a minimum value of $2,500.  


You may exchange shares either by telephone, if you have not canceled your telephone privilege, or in writing. Written requests for exchange must provide the following:


· current Funds name;

· account names and numbers;

· the amount you wish to exchange;

· specify the shareholder privileges you wish to retain (e.g., Telephone Privileges); and

· signatures of all registered owners.


To exchange shares by telephone, you should call 1-866-811-0225 between 8:30 a.m. and 4:00 p.m. Eastern time on any day the Fund is open. We will process telephone requests made after 4:00 p.m. Eastern time at the close of business on the next business day. You should notify the Fund in writing of all shareholder service privileges you wish to continue in any new account opened by a telephone exchange request. Please note that we will only accept exchanges if your ownership registrations in both accounts are identical.


We will value your exchanged shares at their respective net asset value next determined after the receipt of the exchange request. We will not impose an initial sales charge, redemption fee or penalty on exchanges. An exchange transaction is a sale and a purchase of shares for federal income tax purposes and may result in a capital gain or loss.

 

Systematic Exchange Program


The Systematic Exchange Program allows you to make regular, systematic exchanges from one AdvisorOne Fund account into an AdvisorOne Fund Milestone Treasury Obligations Fund Institutional Class Shares account. By setting up the program, you authorize the Fund and its agents to redeem a set dollar amount or number of shares from the first account and purchase Institutional Class Shares of the Milestone Treasury Obligations Fund.


To participate in the Systematic Exchange Program, you must have an initial account balance of $10,000 in the first account. Exchanges may be made on any day or days of your choice. If the amount remaining in the first account is less than the exchange amount you requested, then the remaining amount will be exchanged. At such time as the first account has a zero balance, your participation in the program will be terminated. You may also terminate the program by calling or writing the Fund. Once participation in the program has been terminated for any reason, to reinstate the program you must do so in writing; simply investing additional funds will not reinstate the program.


Exchanging Shares Purchased Through Your Financial Advisor. If fund shares were purchased through your Financial Advisor, initiate your exchange order by contacting your Financial Advisor.



Transferring Registration


You can transfer the registration of your shares in the Fund to another owner by completing a transfer form and sending it to the AdvisorOne Funds, 4020 South 147th Street, Suite 2, Omaha, Nebraska 68137.


TAX STATUS, DIVIDENDS AND DISTRIBUTIONS

 

DIVIDENDS

Dividends are declared daily and paid monthly, following the close of the last Fund Business Day of the month. Shares purchased by wire before 5:00 p.m. (Eastern Time) begin earning dividends that day. Dividends are automatically reinvested on payment dates in additional shares of the Fund unless cash payments are requested by contacting the Trust. The election to reinvest dividends and distributions or receive them in cash may be changed at any time upon written notice to the Transfer Agent. All dividends and other distributions are treated in the same manner for federal income tax purposes whether received in cash or reinvested in shares of the Fund. If no election is made, all dividends and distributions will be reinvested.

CAPITAL GAINS DISTRIBUTIONS

Net realized short-term capital gains, if any, will be distributed whenever the Trustees determine that such distributions would be in the best interest of the shareholders, which will be at least once per year. The Trust does not anticipate that the Fund will realize any long-term capital gains, but should they occur, they also will be distributed at least once every 12 months.

TAX MATTERS

Dividends paid by the Fund out of its net investment income (including realized net short-term capital gains) are taxable to the shareholders of the Fund as ordinary income. Distributions of net long-term capital gains, if any, realized by the Fund are taxable to the shareholders as long-term capital gains, regardless of the length of time the shareholder may have held shares in the Fund at the time of distribution. Distributions are subject to federal income tax when they are paid, whether received in cash or reinvested in shares of the Fund. Distributions declared in December and paid in January, however, are taxable as if paid on December 31st.

The Fund is required by federal law to withhold 28%, or such other amounts as required by federal law, of reportable payments (which may include dividends and capital gain distributions) paid to a non-corporate shareholder unless that shareholder certifies in writing that the social security or other taxpayer identification number provided is correct and that the shareholder is not subject to backup withholding for prior underreporting to the Internal Revenue Service.

Some states and localities do not tax dividends paid on shares of the Fund that are attributable to interest from U.S. Treasury obligations (but not necessarily interest earned on repurchase agreements).

Reports containing appropriate information with respect to the federal income tax status of dividends, distributions and redemptions, including the proportions attributable to capital gains and interest on U.S. Treasury obligations, paid during the year by the Fund will be mailed to shareholders shortly after the close of each calendar year.

The foregoing is only a summary of some of the tax considerations generally affecting the Fund and its shareholders. The Statement of Additional Information contains a more detailed discussion. Because other federal, state or local tax considerations may apply, investors are urged to consult their tax advisors.


FREQUENT PURCHASES AND REDEMPTIONS OF SHARES


To allow the adviser to manage the Fund most effectively, investors are encouraged to execute as many trades as possible before 2:30 p.m. To protect the Fund's performance and shareholders, the adviser discourages frequent trading in response to short-term market fluctuations. The Trust and the Transfer Agent each reserves the right to reject any purchase order for any reason. Because many investors acquire shares of money market funds as short-term investments, however, the Board has not adopted a policy with respect to frequent purchases and redemptions of the Fund's shares.


HOUSEHOLDING

To reduce expenses, we mail only one copy of the prospectus and each annual and semi-annual report to those addresses share by two or more accounts. If you wish to receive individual copies of these documents, please call the Fund at (866) 811-0225 between the hours of 8:30 a.m. and 7:00 p.m. Eastern Time on days the Fund is open for business or contact your financial institution. We will begin sending you individual copies thirty days after receiving your request.



FINANCIAL HIGHLIGHTS


The financial highlights table is intended to help you understand the Fund's financial performance over the past five years. The total returns in the tables represent the rate that an investor would have earned (or lost) on an investment in Institutional Class Shares of the Fund (assuming reinvestment of all dividends and distributions). For the fiscal years ended November 30, 2011, November 30, 2010, November 30, 2009, November 30, 2008, and November 30, 2007 , the information has been audited by Tait, Weller & Baker LLP, independent registered public accounting firm, whose report, along with the predecessor fund's financial statements, are included in the predecessor fund's Annual Report, which is available upon request.  



 

 

 

 

 

 

Institutional Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended November 30,

 

 

 

 

 

 

2011

 

2010

 

2009

 

2008

 

2007

 

Net asset value, beginning of year

 $       1.00

 

 $       1.00

 

 $   1.00

 

 $     1.00

 

 $        1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Activity from investment operations:

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

0.000

(1,2)

0.000

(2)

0.002

 

0.020

 

0.049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less distributions from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

(0.000)

(2)

(0.000)

(2)

(0.002)

 

(0.020)

 

(0.049)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net asset value, end of year

 

 $       1.00

 

 $       1.00

 

 $   1.00

 

 $     1.00

 

 $        1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total return

 

 

 

0.01%

 

0.01%

 

0.16%

 

1.99%

 

4.98%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets, at end of year (000s)

 

 $ 240,723

 

 $ 365,139

 

$657,906

 

 $606,165

 

 $1,381,619

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of gross expenses to average

 

 

 

 

 

 

 

 

 

 

 

 

net assets (3)

 

 

 

0.34%

 

0.35%

 

0.33%

 

0.30%

 

0.29%

 

Ratio of net expenses to average

 

 

 

 

 

 

 

 

 

 

 

 

net assets (4)

 

 

 

0.13%

 

0.19%

 

0.20%

 

0.20%

 

0.20%

 

Ratio of net investment income

 

 

 

 

 

 

 

 

 

 

 

 

 

to average net assets

 

 

 

0.00%

(5)

0.01%

 

0.17%

 

2.15%

 

4.85%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Per share amounts calculated using the average shares method, which more appropriately presents the per share data for the period.

 

(2)

Amount represents less than $0.01 per share.

 

 

 

 

 

 

(3)

Represents the ratio of expenses to average net assets absent fee waivers and/or expense reimbursements by the Advisor.

 

(4)

The adviser has agreed to waive additional fees in order to maintain a positive return. The additional waiver, 0.01% and 0.07%

 

 

for the periods ended November 30, 2010 and November 30, 2011, respectively, decreased the net expense ratio.

 

(5)

Less than 0.005%.

 

 

 

 

 

 

 

 

 




[institutionalshares006.jpg]                                                                                                             Rev. June 2011

FACTS

WHAT DOES ADVISORONE FUNDS ("ADVISORONE") DO WITH YOUR PERSONAL INFORMATION?

Why?

Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.

What?

The types of personal information we collect and share depend on the product or service you have with us. This information can include:

·

Social Security number

·

Employment information

·

Account balances

·

Account transactions

·

Income

·

Investment experience

When you are no longer our customer, we continue to share your information as described in this notice.

How?

All financial companies need to share a customer’s personal information to run their everyday business - to process transactions, maintain customer accounts, and report to credit bureaus. In the section below, we list the reasons financial companies can share their customer's personal information; the reasons AdvisorOne chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information

Does AdvisorOne share?

Can you limit this sharing?

For our everyday business purposes --
such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus

Yes

No

For our marketing purposes --
to offer our products and services to you

Yes

No

For joint marketing with other financial companies

Yes

No

For our affiliates’ everyday business purposes --
information about your transactions and experiences

Yes

No

For our affiliates’ everyday business purposes --
information about your creditworthiness

No

We don't share

For nonaffiliates to market to you

No

We don't share

Questions?

Call (866) 811-0225 or go to www.advisoronefunds.com

        

Page 2

 

 

 

 

 

 

 

 

 

Who we are

Who is providing this notice?

AdvisorOne Funds

What we do

How does AdvisorOne protect my personal information?

To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.

How does AdvisorOne collect my personal information?

We collect your personal information, for example, when you

·

open an account

·

give us your income information

·

provide employment information

·

provide account information

·

give us your contact information


We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.

Why can’t I limit all sharing?

Federal law gives you the right to limit only

·

sharing for affiliates’ everyday business purposes—information about your creditworthiness

·

affiliates from using your information to market to you

·

sharing for nonaffiliates to market to you

State laws and individual companies may give you additional rights to limit sharing.

Definitions

Affiliates

Companies related by common ownership or control. They can be financial and nonfinancial companies.

The following companies may be considered affiliates of AdvisorOne:

·

CLS Investments, LLC

·

NorthStar Financial Services Group, LLC

·

Gemcom, LLC

·

Gemini Fund Services, LLC

·

Northern Lights Compliance Services, LLC

·

Northern Lights Distributors, LLC

·

Orion Advisor Services, LLC

·

Constellation Trust Company

Nonaffiliates

Companies not related by common ownership or control. They can be financial and nonfinancial companies.

·

AdvisorOne does not share with nonaffiliates so they can market to you.

Joint marketing

A formal agreement between nonaffiliated financial companies that together market financial products and services to you.

·

Our joint marketing partners include other financial service companies.





WHERE TO GO FOR MORE INFORMATION


You will find more information about the Fund in the following documents:

Annual and Semi-annual Reports: Our annual and semi-annual reports list the holdings in the Fund, describe the Fund's performance, include financial statements for the Fund, and discuss the market conditions and strategies that significantly affected the Fund's performance during the last fiscal year.

Statement of Additional Information ("SAI"): The Statement of Additional Information contains additional and more detailed information about the Fund.


The SAI is incorporated by reference into (and is thus a part of) this Prospectus.


There are three ways to get a copy of these documents:

1. Call or write for one, and a copy will be sent without charge.


      AdvisorOne Funds

      c/o Gemini Fund Services, LLC

      4020 South 147th Street, Suite 2

      Omaha, NE 68137

      1-866-811-0225


The Prospectus, Annual Report, Semi-Annual Report and holdings information are available at www.AdvisorOneFunds.com.


2. Write to the Public Reference Room of the Securities and Exchange Commission ("SEC") and ask them to mail you a copy. Or, you may e-mail your request to publicinfo@sec.gov. The SEC charges a fee for this service.


You can also go to the Public Reference Room and copy the documents while you are there. The SEC is located at 100 F Street, NE, Washington, DC 20549-0102.


You may get information about the Public Reference Room and its business hours by writing or calling the number below.


      Public Reference Room - U.S. Securities and Exchange Commission

      100 F Street, N.W.

      Washington, D.C. 20549-0102

      1-202-551-8090


3. Go to the SEC's website (www.sec.gov) and download a free text-only version.

 

If you are a current Fund shareholder and would like information about your account, account transactions, or account statements, please call us at 1-866-811-0225.


If you purchased your shares through a financial institution, you may contact that institution for more information.


The AdvisorOne Funds' Investment Company Act File Number is 811-08037.


1-866-811-0225

www.AdvisorOneFunds.com



www.advisoronefunds.com
4020 S.
147th Street • Omaha, NE 68137
(866) 811-0225

Distributed by Northern Lights Distributors, LLC
Member FINRA

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




ADVISORONE FUNDS


Milestone Treasury Obligations Fund


Investor

Class

Shares

MTOXX

 


PROSPECTUS January 20, 2012

As amended March 19, 2012


4020 S. 147th Street

Omaha, NE 68137

www.advisoronefunds.com

(866) 811-0225




This Prospectus provides important information about the Fund that you should know before investing.  Please read it carefully and keep it for future reference.



These securities have not been approved or disapproved by the Securities and Exchange Commission nor has the Securities and Exchange Commission passed upon the accuracy or adequacy of this Prospectus.  Any representation to the contrary is a criminal offense.





TABLE OF CONTENTS

 

FUND SUMMARY

1

ADDITIONAL INFORMATION ABOUT
PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

3

Investment Strategies

3

Investment Risks

4

MANAGEMENT

4

Investment Adviser

4

Investment Adviser Portfolio Manager

5

HOW SHARES ARE PRICED

5

HOW TO PURCHASE SHARES

5

HOW TO REDEEM SHARES

7

TAX STATUS, DIVIDENDS AND DISTRIBUTIONS

9

FREQUENT PURCHASES AND REDEMPTIONS OF SHARES

10

HOUSEHOLDING

10

FINANCIAL HIGHLIGHTS

11

Privacy Notice

12





FUND SUMMARY


Investment Objective:

The Treasury Obligations Fund is a money market fund that seeks to provide its shareholders with the maximum current income that is consistent with the preservation of capital and the maintenance of liquidity.


Fees and Expenses of the Fund:

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.


Shareholder Fees
(fees paid directly from your investment)

Investor
Class
Shares

Maximum Sales Charge (Load) Imposed on Purchases (as a % of offering price)

None

Maximum Deferred Sales Charge (Load)

None

Maximum Sales Charge (Load) Imposed on Reinvested Dividends

None

Redemption Fee

None

Exchange Fee

None

Annual Fund Operating Expenses
(expenses that you pay each year

as a percentage of the value of your investment)

 

Management Fees

0.10%

Distribution (12b-1) Fees

None

Other Expenses

0.45%

         Shareholder Servicing Fees

0.25%

         Remaining Other Expenses

0.20%

Total Annual Fund Operating Expenses

0.55%

Fee Waiver and Expense Reimbursements*

(0.10)%

Total Annual Fund Operating Expenses After Fee Waivers and Expense Reimbursements

0.45%

*The Fund's adviser has contractually agreed to waive its fees and/or reimburse expenses of the Fund, at least until March 31, 2013 to ensure that Total Annual Fund Operating Expenses After Fee Waiver and Reimbursement (exclusive of any taxes, interest, brokerage commissions, dividend expense on securities sold short, acquired fund fees and expenses, or extraordinary expenses such as litigation or reorganization costs) will not exceed 0.45% of the Fund’s average daily net assets for Investor Class Shares of the Fund.  Additionally, the Fund's adviser has contractually agreed to waive its fees and/or reimburse expenses of the Fund, at least until March 31, 2013 to ensure that the daily yield will be at least zero for Investor Class Shares of the Fund.  These fee waivers and expense reimbursements are subject to possible recoupment from the Fund in future years on a rolling three-year basis (within the three years after the fees have been waived or reimbursed) if such recoupment can be achieved within the foregoing expense limits.  These agreements may be terminated only by the Fund's Board of Trustees, on 60 days written notice to the Fund' adviser.


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 remain the same.  Although your actual costs may be higher or lower, based upon these assumptions your costs would be:


Year

Investor Class Shares

1

$46

3

$166

5

$297

10

$680


Principal Investment Strategies:

As a fundamental policy, which cannot be changed without shareholder approval, the Fund invests only in:

 

·

U.S. Treasury obligations maturing in 397 days or less.

·

Repurchase agreements fully collateralized by U.S. Treasury obligations.

The Fund may invest in U.S. Treasury obligations or repurchase agreements without limit. Although the Fund intends to be fully invested in these instruments, it may hold a de minimis amount of cash for a short period prior to investment or payment of the proceeds of redemption.

The Fund will maintain an average maturity computed on a dollar-weighted basis of 60 days or less and a dollar-weighted average life of 120 days or less.

 

Principal Investment Risks:

Although the Fund invests in short-term Treasury obligations, an investment in the Fund is subject to risk even if all securities in the Fund are paid in full at maturity. All money market instruments, including U.S. Treasury obligations, can change in value in response to changes in interest rates, and a major change in rates could cause the share price to change. While U.S. Treasury obligations are backed by the full faith and credit of the U.S. government, an investment in the Fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation, U.S. government or any other government agency. Thus, while the Fund seeks to maintain a stable net asset value of $1.00 per share, there is no assurance that it will do so. It is possible to lose money by investing in the Fund.  If the seller of a repurchase agreement in which the Fund invests defaults on its obligation or declares bankruptcy, the Fund may experience delays in selling the securities underlying the repurchase agreement. As a result, the Fund may incur losses arising from a decline in the value of those securities, reduced levels of income, and expenses of enforcing its rights.


Performance:


The following bar chart and tables below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund from year to year and by showing how the Fund's average annual returns for one, five and ten years compare with those of a broad measure of market performance. Performance for the period prior to January 20, 2012 is that of the Treasury Obligations Portfolio, a series of The Milestone Funds, the predecessor of the Fund. Past performance (before and after taxes) does not necessarily indicate how the Fund will perform in the future. Updated performance information for AdvisorOne Funds is available at no cost by visiting www.advisoronefunds.com or by calling 1-866-811-0225.


Annual Returns for Years Ended December 31,

[investorshares004.gif] 



Best Quarter

December 31, 2006

1.23%

Worst Quarter

March 31, 2011

0.00%*

                                                                                                                                                                                          *Less than 0.005%





Average Annual Total Returns

(For the periods ended December 31, 2011)


 

1 Year

5 years

10 Years

Investor Class Shares

0.01%

1.20%

1.63%

Lipper U.S. Treasury Money Market Funds Index

0.01%

1.12%

1.46%


The Investor Class Shares' seven-day current yield on December 30, 2011 was 0.01%.

Investment Adviser:  CLS Investments, LLC.


Portfolio Manager:  Marc Pfeffer, Senior Portfolio Manager of the adviser serves as Portfolio Manager of the Fund.  Except for a three-year period during which Mr. Pfeffer worked at Bear Stearns & Co. Inc. (2001-2003), he has been the Portfolio Manager of the Fund, and its predecessor, since 1994.


Purchase and Sale of Fund Shares:  You may purchase and redeem shares of the Fund on any day that the New York Stock Exchange is open for trading, subject to certain restrictions described in the section titled "How Shares Are Priced" of the Fund's Prospectus.  


Purchases and redemptions may be made by mailing an application or redemption request to AdvisorOne Funds c/o Gemini Fund Services, LLC, 4020 South 147th Street, Suite 2, Omaha, Nebraska 68137, by calling 1-866-811-0225 or by visiting the Fund's website www.advisoronefunds.com.  You also may purchase and redeem shares through a financial intermediary.  


The minimum initial investment for Investor Class Shares is $1,000,000.  There is no minimum subsequent investment.


Tax Information:  Dividends and capital gain distributions you receive from the Fund are taxable to you as either ordinary income or capital gains tax rates unless you are investing through a tax-free account.  However, these dividend and capital gain distributions may be taxable upon their eventual withdrawal from tax-deferred plans.


Payments to Broker-Dealers and Other Financial Intermediaries:  If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the 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 the Fund over another investment.  Ask your salesperson or visit your financial intermediary's web site for more information.


ADDITIONAL INFORMATION ABOUT PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

INVESTMENT OBJECTIVE

The Treasury Obligations Fund is a money market fund that seeks to provide its shareholders with the maximum current income that is consistent with the preservation of capital and the maintenance of liquidity.  The Fund's investment objective may be changed without shareholder approval by the Fund's Board of Trustees upon 60 days written notice to shareholders.

PRINCIPAL INVESTMENT STRATEGIES

U.S. Treasury obligations are securities issued by the United States Treasury, such as Treasury bills, notes and bonds that are fully guaranteed as to payment of principal and interest by the United States government.

Repurchase agreements are transactions in which the Fund purchases a security and simultaneously commits to resell that security to the seller at an agreed-upon price on an agreed-upon future date, normally one-to-seven days later. The resale price reflects a market rate of interest that is not related to the coupon rate or maturity of the purchased security.

The Fund enters into repurchase agreements with dealers that the adviser believes present minimal credit risks in accordance with guidelines established by the Board of Trustees of AdvisorOne Funds (the "Board"). The adviser monitors the credit-worthiness of sellers under the Board's general supervision. If a seller defaults on its repurchase obligation, however, the Fund might suffer a loss.

The Fund will make no investment unless the adviser first determines that the investment is eligible for purchase and presents minimal credit risks, pursuant to procedures adopted by the Board. The Fund's investments are subject to the restrictions imposed by Rule 2a-7 under the Investment Company Act of 1940, as amended.

The Fund may purchase U.S. Treasury obligations on a when-issued or forward commitment basis. The Fund may also invest up to 5% of its net assets in illiquid securities. Each of these investment techniques and their related risks are described in detail in the Statement of Additional Information.

PRINCIPAL INVESTMENT RISKS

If the seller of a repurchase agreement in which the Fund invests defaults on its obligation or declares bankruptcy, the Fund may experience delays in selling the securities underlying the repurchase agreement. As a result, the Fund may incur losses arising from a decline in the value of those securities, reduced levels of income, and expenses of enforcing its rights.

TEMPORARY DEFENSIVE POSITIONS

Under abnormal market or economic conditions, the Fund temporarily may hold up to 100% of its investable assets in cash. The Fund may also, under such circumstances, invest in other investment companies. For temporary or emergency purposes, the Fund may borrow up to 33 1/3% of its total assets. When taking such temporary positions, the Fund may not achieve its investment objective.

PORTFOLIO HOLDINGS DISCLOSURE

The Fund will disclose its complete portfolio holdings monthly on its website at www.advisoronefunds.com.  Additionally, the Fund discloses its complete portfolio holdings as of the end of its second fiscal quarter (May 31st) and its fiscal year (November 30th) in its reports to shareholders. The Fund sends reports to its existing shareholders no later than 60 days after the relevant fiscal period, and files these reports with the Securities and Exchange Commission (the "SEC") by the 70th day after the end of the relevant fiscal period.

The Fund files its complete portfolio holdings as of the end of its first and third fiscal quarters (February 28/29 and August 31, respectively) with the SEC on Form N-Q no later than 60 days after the relevant fiscal period.

You can find these filings on the SEC's website, www.sec.gov.

The Statement of Additional Information also describes the policies and procedures that relate to the disclosure of the Fund's portfolio holdings.


MANAGEMENT


Investment Adviser


CLS Investments, LLC ("CLS"), a Nebraska limited liability company, serves as investment adviser to the Fund. CLS (including its predecessor) has been an investment adviser to individuals, employee benefit plans, trusts, investment companies, and corporations since 1989. As of June 30, 2011, CLS managed approximately $9 billion in assets under management.  CLS maintains its principal offices at 4020 South 147th Street, Omaha, Nebraska 68137. CLS is an affiliate of Gemini Fund Services, LLC and Northern Lights Distributors, LLC.


Under the terms of its investment advisory agreement, CLS is responsible for formulating the Fund's investment program and for making day-to-day investment decisions and engaging in portfolio transactions. CLS also furnishes officers, provides office space, services and equipment and supervises all matters relating to the Fund's operations.


The Fund pays CLS a monthly fee at the annualized rate (expressed as a percentage of the Fund's average daily net assets) of 0.10%.


CLS has agreed to defer its advisory fee and reimburse Fund expenses to limit total operating expenses at least through March 31, 2013, so that direct expenses do not exceed 0.45% of the Fund’s average daily net assets of Investor Class shares of the Fund.  Additionally, the Fund's adviser has contractually agreed to waive its fees and/or reimburse expenses of the Fund, at least until March 31, 2013, to ensure that the daily yield will be at least zero for Investor Class shares of the Fund.


Any deferral and reimbursement may be recouped by CLS from the Fund, to the extent that overall expenses fall below the preceding class-specific limits, within three years of when the amounts were deferred or reimbursed, including with respect to amounts waived or reimbursed by the predecessor fund's adviser pursuant to its expense limitation agreement with the predecessor fund.



Investment Adviser Portfolio Manager

Marc Pfeffer joined the adviser as a Senior Portfolio Manager in August 2011.  Previously, Mr. Pfeffer served as Chief Investment Officer of Milestone Capital Management, LLC ("Milestone") since 2004.  Mr. Pfeffer has over 23 years of money market fund investment experience and in addition to serving as Chief Investment Officer, was also head of the portfolio management and the research team at the predecessor Fund's adviser.  Before joining Milestone, Mr. Pfeffer was with Bear, Stearns & Co. Inc. and Goldman Sachs Asset Management ("GSAM").  At GSAM Mr. Pfeffer was responsible for managing six institutional money market portfolios which grew to over $3 billion in total assets as of November 1994. Mr. Pfeffer's portfolio management experience and expertise encompass all aspects of institutional money market fund management, including: portfolio composition and structure; liquidity credit analysis and risk management; compliance review and monitoring; fund administration, accounting, operations and controls.  Mr. Pfeffer holds a BS in Finance from the State University of New York at Buffalo, and an MBA from Fordham University.

The Fund's investment advisory agreement with the adviser is subject to the Board's annual review and approval.  A discussion regarding the basis for the Board's most recent approval of the advisory agreement on August 3, 2011 can be found in the December 20, 2011 Prospectus/Proxy Statement filed by AdvisorOne Funds with the SEC on December 23, 2011.


HOW SHARES ARE PRICED


The net asset value per share of the Fund is determined at 5:00 p.m. (Eastern Time) on each Fund Business Day. The net asset value is determined by subtracting total liabilities from total assets and dividing the remainder by the number of shares outstanding. The Fund's securities are valued at their amortized cost which does not take into account unrealized gains or losses on securities. This method involves initially valuing an instrument at its cost and thereafter assuming a constant amortization to maturity of any Investor paid or accreting discount received. The amortized cost method minimizes changes in the market value of the securities held by the Fund and helps it maintain a stable price of $1.00 per share.


HOW TO PURCHASE SHARES


Types of Accounts


If you are making an initial investment in the Fund, you will need to open an account. You may establish the following types of accounts:


·

Individual or Joint Ownership.  One person owns an individual account while two or more people own a joint account. We will treat each individual owner of a joint account as authorized to give instructions on purchases, sales and exchanges of shares without notice to the other owners. However, we will require each owner's signature guarantee for any transaction requiring a signature guarantee.


·

Gift or Transfer to Minors.  A Custodian maintains a Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) account for the benefit of a minor. To open an UGMA or UTMA account, you must include the minor's social security number on the application.


·

Trust.  A trust can open an account. You must include the name of each trustee, the name of the trust and the date of the trust agreement on the application.


·

Corporations, Partnerships and Other Legal Entities.  Corporations, partnerships and other legal entities may also open an account. A general partner of the partnership or an authorized officer of the corporation or other legal entity must sign the application and resolution form.


·

Retirement.  If you are eligible, you may set up your account under a tax-sheltered retirement plan, such as an Individual Retirement Account (IRA) or Roth IRA, Rollover IRA, SEP-IRA, SIMPLE IRA, Keogh Account, or other retirement plan. Your financial consultant can help you determine if you are eligible.


Shareholder Services


The Board has adopted a Shareholder Services Plan, which provides that AdvisorOne Funds (the “Trust”), on behalf of the Fund, may obtain the services of certain financial institutions, broker-dealers, and other financial intermediaries to act as shareholder servicing agents for their customers.  For these services, the Trust may pay the shareholder servicing agent a fee, up to the amount indicated below, based upon the average daily net assets of the shares owned by investors for which the shareholder servicing agent maintains a servicing relationship. Payments under the Shareholder Services Plan may vary and are determined by the Trust in its sole discretion, in amounts up to the amount indicated below.



Fees

Investor Class Shares

Shareholder Servicing Fees

0.25%


Because these shareholder service fees are paid out of the Fund's assets on an ongoing basis, such fees may, over time, increase the cost of investing in the Fund.  Pursuant to the 1940 Act, you will have exclusive voting rights with respect to the Plan for Investor Class Shares.


ADDITIONAL SHARE CLASSES


In addition to the Investor Class Shares, the Fund also offers Financial Class Shares, Institutional Class Shares and Premium Class Shares by separate prospectuses. For further information about these other classes of shares, please call (866) 811-0225.


Purchasing Shares


Good Order:  When making a purchase request, make sure your request is in good order.  "Good order" means your purchase request includes:


·

the name of the Fund

·

the dollar amount of shares to be purchased

·

a completed purchase application or investment stub

·

check payable to the applicable Fund


The minimum initial investment for Investor Class Shares is $1,000,000.

AdvisorOne Funds or CLS may waive or lower the minimum in certain cases. You must complete and sign an application for each account you open.


The Fund and the Distributor each reserves the right to reject any purchase for any reason and to cancel any purchase due to non-payment. You must make all purchases in United States dollars and draw all checks on United States banks. If we cancel your purchase due to non-payment, you will be responsible for any loss the Fund incurs. We will not accept cash or third-party checks for the purchase of shares.


Method of Purchase


Purchase Procedures

 

 

Through a Financial Professional

Contact your financial consultant. Your financial consultant can tell you the time by which you must submit your order to begin receiving dividends that day. Your Financial Consultant must transmit the order to the Fund before 5:00 p.m. Eastern time).

 

 

Through Brokers

The Distributor authorizes certain securities dealers, banks or other financial service firms (collectively, "brokers") to purchase your shares. To receive that day's share price:

·

you must place your order with the broker before 5:00 p.m. Eastern time.

 

 

By Mail

To purchase Shares, send your completed application to:

AdvisorOne Funds

c/o Gemini Fund Services, LLC

4020 South 147th Street, Suite 2

  

Omaha, NE 68137                 

 Include with your application your check, payable to "AdvisorOne Funds"

 

 

By Wire

If you wish to wire money to make a subsequent investment in the Fund, please call 1-866-811-0225 for wiring instructions and to notify the Fund that a wire is coming.  Any commercial bank can transfer same-day funds by wire.  The Fund will normally accept wired funds for investment on the day received if they are received by the Fund's designated bank before the close of regular trading on the NYSE. Your bank may charge you for wiring same-day funds.

 

 

By Telephone     

You may make subsequent purchases in your account by telephoning 1-866-811-0225 between 8:30 a.m. and 5:00 p.m. Eastern time on any day the Fund is open. We will electronically transfer money from the bank account you designate on your Application to our account with AdvisorOne Funds. This investment option is only available if you have not declined or cancelled your telephone investment privilege.

 

 

IMPORTANT NOTES

Once you have requested a telephone transaction, and a confirmation number has been assigned, the transaction cannot be revoked. We reserve the right to refuse any purchase request.


HOW TO REDEEM SHARES


You have the right to sell ("redeem") all or any part of your shares subject to certain restrictions. Selling your shares in the Fund is referred to as a "redemption" because the Fund buys back its shares. We will redeem your shares at the NAV next computed following receipt of your redemption request in good order. See Redemption Procedures Request in Good Order.


We will mail your redemption proceeds to your address of record or transmit them electronically to your designated bank account. Except under certain extraordinary conditions, we will send your redemption to you within seven days after we receive your redemption request. If you purchase shares by check and, soon after, request a redemption, your redemption request will not be processed until the check used for your purchase has cleared (usually within 10 days).


The Fund cannot accept requests that specify a certain date for redemption or which specify any other special conditions.  Redemption proceeds must be payable to the registered shareholder(s) of the account or to a financial intermediary for the benefit of the registered shareholder(s) of the account.  Please call 1-866-811-0225 for further information.  We will not process your redemption request if it is not in good order.  We will notify you if your redemption request is not in good order.


If, as a result of your redemption, your account value drops below $2,500, we may redeem the remaining shares in your account.  We will notify you in writing of our intent to redeem your shares.  We will allow at least sixty days thereafter for you to make an additional investment to bring your account value up to at least the minimum amount before we will process the redemption.


Medallion Signature Guarantees


Your redemption request must be accompanied by a "medallion signature guarantee" under certain circumstances, such as sending the redemption proceeds to an address other than the address of record.


Third Party Transactions


If you buy and redeem shares of the Fund through a member of the Financial Industry Regulatory Authority, Inc. that member may charge a fee for that service.  The Fund has authorized one or more brokers to accept on its behalf purchase and redemption orders. Such brokers are authorized to designate intermediaries to accept orders on the Fund's behalf. The Fund will be deemed to have received the order when an authorized broker or a broker authorized designee accepts your order. Your order will be priced at the Fund's net asset value next computed after it is received by the authorized broker or broker authorized designee.


CLS may pay certain financial institutions (which may include banks, brokers, securities dealers and other industry professionals) a fee for providing distribution related services and/or for performing certain administrative and servicing functions for Fund shareholders and/or making the funds available for purchase on their platforms.  These payments are made from CLS and are not charged to the Fund, unless part of an approved Plan.


Redemptions in Kind


The Fund reserves the right to honor requests for redemption or repurchase orders by making payment in whole or in part in readily marketable securities ("redemption in kind") if the amount of such a request is large enough to affect operations (for example, if the request is greater than $250,000 or 1% of the Fund's assets). The securities will be chosen by the Fund and valued at the Fund's net asset value. A shareholder may incur transaction expenses in converting these securities to cash.


Method of

Redemption


Redemption Procedures

 

 

By Telephone     



You may authorize redemption of some or all shares in your account with the Fund by telephoning the Fund at 1-866-811-0225 between 8:30 a.m. and 5:00 p.m. Eastern time on any day the Fund is open.


You will NOT be eligible to use the telephone redemption service if you:

·

have declined or canceled your telephone investment privilege;

·

wish to redeem shares valued at $50,000 or greater or if you ask us to send the redemption proceeds to an address other than the address of record for the account;

·

must provide supporting legal documents such as a signature guarantee for redemption

·

have an account set up as a corporation, trust or partnership; or

·

wish to redeem from a retirement account.

 

 

By Mail         

If you are redeeming Shares, you may send your redemption request to:

AdvisorOne Funds

c/o Gemini Fund Services, LLC

4020 South 147th Street, Suite 2

Omaha, NE 68137

 

You must include the following information in your written request:

·

a letter of instruction stating the name of the Fund, the number of shares you are redeeming, the names in which the account is registered and your account number;

·

other supporting legal documents, if necessary, for redemption requests by corporations, trusts and partnerships;

·

a signature guarantee, if necessary.

 

 

By Wire          

You may request your redemption proceeds be wired directly to the bank account designated on your application. The Fund's transfer agent will charge you a $10.00 fee for each wire redemption. The transfer agent will deduct the fee directly from your account. Your bank may also impose a fee for the incoming wire.

 

 

Request in "Good Order"

For our mutual protection, all redemption requests must include:

·

your account number;

·

the amount of the transaction;

·

for mail request, signatures of all owners EXACTLY as registered on the account and signature guarantees, if required (signature guarantees can be obtained at most banks, credit unions, and licensed brokers); and

·

any supporting legal documentation that may be required.


Your redemption request will be processed at the next determined share price after we have received all required information.

 

 

IMPORTANT NOTE

Once we have processed your redemption request, and a confirmation number has been given, the transaction cannot be revoked.





Options For Redemption Proceeds


You may receive your redemption proceeds by check or by wire.


Check Redemptions:  Normally we will mail your check within two business days of a redemption.


Wire Redemptions:  Before you can receive redemption proceeds by wire, you must establish this option by completing a special form or the appropriate section of your account application.


You may request that your redemption proceeds be wired directly to your bank account.  AdvisorOne Funds' transfer agent imposes a $10.00 fee for each wire redemption and deducts the fee directly from your account.  Your bank may also impose a fee for the incoming wire.  The redemption proceeds must be paid to the same bank and account as designated on the application or in written instructions in proper form subsequently received by AdvisorOne Funds.


Telephone Redemptions and Exchanges  


We will automatically establish the telephone redemption option for your account, unless you instruct us otherwise in writing. Telephone redemptions are easy and convenient, but this account option involves a risk of loss from unauthorized or fraudulent transactions. We will take reasonable precautions to protect your account from fraud. You should do the same by keeping your account information private and by reviewing immediately any account statements and confirmations that you receive. Please contact us immediately about any transaction you believe to be unauthorized.


AdvisorOne Funds reserves the right to refuse a telephone redemption or exchange if the caller cannot provide:

 

·

the account number

·

the name and address exactly as registered on the account

·

the primary social security or employer identification number as registered on the account


We may also require a password from the caller.


AdvisorOne Funds will not be responsible for any account losses due to telephone fraud, so long as we have taken reasonable steps to verify the caller's identity. If you wish to cancel the telephone redemption feature for your account, please notify us in writing.


HOW TO EXCHANGE SHARES


The exchange privilege is a convenient way to buy shares in another fund in order to respond to changes in your investment goals or in market conditions. You may exchange your Investor Class Shares for Class N shares of any fund that is a series of AdvisorOne Funds without paying any sales charge.


If you establish a new account by exchange, the exchanged shares must have a minimum value of $2,500.  


You may exchange shares either by telephone, if you have not canceled your telephone privilege, or in writing. Written requests for exchange must provide the following:


· current Funds name;

· account names and numbers;

· the amount you wish to exchange;

· specify the shareholder privileges you wish to retain (e.g., Telephone Privileges); and

· signatures of all registered owners.


To exchange shares by telephone, you should call 1-866-811-0225 between 8:30 a.m. and 4:00 p.m. Eastern time on any day the Fund is open. We will process telephone requests made after 4:00 p.m. Eastern time at the close of business on the next business day. You should notify the Fund in writing of all shareholder service privileges you wish to continue in any new account opened by a telephone exchange request. Please note that we will only accept exchanges if your ownership registrations in both accounts are identical.


We will value your exchanged shares at their respective net asset value next determined after the receipt of the exchange request. We will not impose an initial sales charge, redemption fee or penalty on exchanges. An exchange transaction is a sale and a purchase of shares for federal income tax purposes and may result in a capital gain or loss.

 

Systematic Exchange Program


The Systematic Exchange Program allows you to make regular, systematic exchanges from one AdvisorOne Fund account into an AdvisorOne Fund Milestone Treasury Obligations Fund Institutional Class Shares account. By setting up the program, you authorize the Fund and its agents to redeem a set dollar amount or number of shares from the first account and purchase Institutional Class Shares of the Milestone Treasury Obligations Fund.


To participate in the Systematic Exchange Program, you must have an initial account balance of $10,000 in the first account. Exchanges may be made on any day or days of your choice. If the amount remaining in the first account is less than the exchange amount you requested, then the remaining amount will be exchanged. At such time as the first account has a zero balance, your participation in the program will be terminated. You may also terminate the program by calling or writing the Fund. Once participation in the program has been terminated for any reason, to reinstate the program you must do so in writing; simply investing additional funds will not reinstate the program.


Exchanging Shares Purchased Through Your Financial Advisor. If fund shares were purchased through your Financial Advisor, initiate your exchange order by contacting your Financial Advisor.



Transferring Registration


You can transfer the registration of your shares in the Fund to another owner by completing a transfer form and sending it to the AdvisorOne Funds, 4020 South 147th Street, Suite 2, Omaha, Nebraska 68137.


TAX STATUS, DIVIDENDS AND DISTRIBUTIONS


DIVIDENDS

Dividends are declared daily and paid monthly, following the close of the last Fund Business Day of the month. Shares purchased by wire before 5:00 p.m. (Eastern Time) begin earning dividends that day. Dividends are automatically reinvested on payment dates in additional shares of the Fund unless cash payments are requested by contacting the Trust. The election to reinvest dividends and distributions or receive them in cash may be changed at any time upon written notice to the Transfer Agent. All dividends and other distributions are treated in the same manner for federal income tax purposes whether received in cash or reinvested in shares of the Fund. If no election is made, all dividends and distributions will be reinvested.


CAPITAL GAINS DISTRIBUTIONS

Net realized short-term capital gains, if any, will be distributed whenever the Trustees determine that such distributions would be in the best interest of the shareholders, which will be at least once per year. The Trust does not anticipate that the Fund will realize any long-term capital gains, but should they occur, they also will be distributed at least once every 12 months.

TAX MATTERS

Dividends paid by the Fund out of its net investment income (including realized net short-term capital gains) are taxable to the shareholders of the Fund as ordinary income. Distributions of net long-term capital gains, if any, realized by the Fund are taxable to the shareholders as long-term capital gains, regardless of the length of time the shareholder may have held shares in the Fund at the time of distribution. Distributions are subject to federal income tax when they are paid, whether received in cash or reinvested in shares of the Fund. Distributions declared in December and paid in January, however, are taxable as if paid on December 31st.

The Fund is required by federal law to withhold 28%, or such other amounts as required by federal law, of reportable payments (which may include dividends and capital gain distributions) paid to a non-corporate shareholder unless that shareholder certifies in writing that the social security or other taxpayer identification number provided is correct and that the shareholder is not subject to backup withholding for prior underreporting to the Internal Revenue Service.

Some states and localities do not tax dividends paid on shares of the Fund that are attributable to interest from U.S. Treasury obligations (but not necessarily interest earned on repurchase agreements).

Reports containing appropriate information with respect to the federal income tax status of dividends, distributions and redemptions, including the proportions attributable to capital gains and interest on U.S. Treasury obligations, paid during the year by the Fund will be mailed to shareholders shortly after the close of each calendar year.

The foregoing is only a summary of some of the tax considerations generally affecting the Fund and its shareholders. The Statement of Additional Information contains a more detailed discussion. Because other federal, state or local tax considerations may apply, investors are urged to consult their tax advisors.


FREQUENT PURCHASES AND REDEMPTIONS OF SHARES


To allow the adviser to manage the Fund most effectively, investors are encouraged to execute as many trades as possible before 2:30 p.m. To protect the Fund's performance and shareholders, the adviser discourages frequent trading in response to short-term market fluctuations. The Trust and the Transfer Agent each reserves the right to reject any purchase order for any reason. Because many investors acquire shares of money market funds as short-term investments, however, the Board has not adopted a policy with respect to frequent purchases and redemptions of the Fund's shares.


HOUSEHOLDING

To reduce expenses, we mail only one copy of the prospectus and each annual and semi-annual report to those addresses share by two or more accounts. If you wish to receive individual copies of these documents, please call the Fund at (866) 811-0225 between the hours of 8:30 a.m. and 7:00 p.m. Eastern Time on days the Fund is open for business or contact your financial institution. We will begin sending you individual copies thirty days after receiving your request.



FINANCIAL HIGHLIGHTS


The financial highlights table is intended to help you understand the Fund's financial performance over the past five years. The total returns in the tables represent the rate that an investor would have earned (or lost) on an investment in Investor Class Shares of the Fund (assuming reinvestment of all dividends and distributions). For the fiscal years ended November 30, 2011, November 30, 2010, November 30, 2009, November 30, 2008, and November 30, 2007 , the information has been audited by Tait, Weller & Baker LLP, independent registered public accounting firm, whose report, along with the predecessor fund's financial statements, are included in the predecessor fund's Annual Report, which is available upon request.  

 

 

 

 

 

 

Investor Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended November 30,

 

 

 

 

 

 

2011

 

2010

 

2009

 

2008

 

2007

 

Net asset value, beginning of year

 $       1.00

 

 $     1.00

 

 $     1.00

 

 $     1.00

 

 $   1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Activity from investment operations:

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

0.000

(1,2)

0.000

(2)

0.000

(2)

0.017

 

0.046

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less distributions from:

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

(0.000)

(2)

(0.000)

(2)

(0.000)

(2)

(0.017)

 

(0.046)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net asset value, end of year

 $       1.00

 

 $     1.00

 

 $     1.00

 

 $     1.00

 

 $   1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total return

 

 

 

0.01%

 

0.01%

 

0.02%

 

1.74%

 

4.71%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets, at end of year (000s)

 $   53,492

 

 $ 52,814

 

 $ 93,669

 

 $164,936

 

 $304,798

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of gross expenses to average

 

 

 

 

 

 

 

 

 

 

 

net assets (3)

 

 

 

0.55%

 

0.59%

 

0.53%

 

0.47%

 

0.48%

 

Ratio of net expenses to average

 

 

 

 

 

 

 

 

 

 

 

net assets (4)

 

 

 

0.13%

 

0.19%

 

0.35%

 

0.45%

 

0.45%

 

Ratio of net investment income

 

 

 

 

 

 

 

 

 

 

 

to average net assets

 

0.00%

(5)

0.00%

(5)

0.02%

 

1.92%

 

4.62%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Per share amounts calculated using the average shares method, which more appropriately presents the per share data for the period.

 

(2)

Amount represents less than $0.01 per share.

 

 

 

 

 

 

 

(3)

Represents the ratio of expenses to average net assets absent fee waivers and/or expense reimbursements by the Advisor.

 

(4)

The adviser has agreed to waive additional fees in order to maintain a positive return. The additional waiver, 0.10%, 0.26% and 0.32%

 

 

for the periods ended November 30, 2009 through November 30, 2011, respectively, decreased the net expense ratio.

 

(5)

Less than 0.005%.

 

 

 

 

 

 

 

 

 

 


I




[institutionalshares006.jpg]                                                                                                             Rev. June 2011

FACTS

WHAT DOES ADVISORONE FUNDS ("ADVISORONE") DO WITH YOUR PERSONAL INFORMATION?

Why?

Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.

What?

The types of personal information we collect and share depend on the product or service you have with us. This information can include:

·

Social Security number

·

Employment information

·

Account balances

·

Account transactions

·

Income

·

Investment experience

When you are no longer our customer, we continue to share your information as described in this notice.

How?

All financial companies need to share a customer’s personal information to run their everyday business - to process transactions, maintain customer accounts, and report to credit bureaus. In the section below, we list the reasons financial companies can share their customer's personal information; the reasons AdvisorOne chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information

Does AdvisorOne share?

Can you limit this sharing?

For our everyday business purposes --
such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus

Yes

No

For our marketing purposes --
to offer our products and services to you

Yes

No

For joint marketing with other financial companies

Yes

No

For our affiliates’ everyday business purposes --
information about your transactions and experiences

Yes

No

For our affiliates’ everyday business purposes --
information about your creditworthiness

No

We don't share

For nonaffiliates to market to you

No

We don't share

Questions?

Call (866) 811-0225 or go to www.advisoronefunds.com

        

Page 2

 

 

 

 

 

 

 

 

 

Who we are

Who is providing this notice?

AdvisorOne Funds

What we do

How does AdvisorOne protect my personal information?

To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.

How does AdvisorOne collect my personal information?

We collect your personal information, for example, when you

·

open an account

·

give us your income information

·

provide employment information

·

provide account information

·

give us your contact information


We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.

Why can’t I limit all sharing?

Federal law gives you the right to limit only

·

sharing for affiliates’ everyday business purposes—information about your creditworthiness

·

affiliates from using your information to market to you

·

sharing for nonaffiliates to market to you

State laws and individual companies may give you additional rights to limit sharing.

Definitions

Affiliates

Companies related by common ownership or control. They can be financial and nonfinancial companies.

The following companies may be considered affiliates of AdvisorOne:

·

CLS Investments, LLC

·

NorthStar Financial Services Group, LLC

·

Gemcom, LLC

·

Gemini Fund Services, LLC

·

Northern Lights Compliance Services, LLC

·

Northern Lights Distributors, LLC

·

Orion Advisor Services, LLC

·

Constellation Trust Company

Nonaffiliates

Companies not related by common ownership or control. They can be financial and nonfinancial companies.

·

AdvisorOne does not share with nonaffiliates so they can market to you.

Joint marketing

A formal agreement between nonaffiliated financial companies that together market financial products and services to you.

·

Our joint marketing partners include other financial service companies.








[institutionalshares006.jpg]                                                                                                             Rev. June 2011

FACTS

WHAT DOES ADVISORONE FUNDS ("ADVISORONE") DO WITH YOUR PERSONAL INFORMATION?

Why?

Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.

What?

The types of personal information we collect and share depend on the product or service you have with us. This information can include:

·

Social Security number

·

Employment information

·

Account balances

·

Account transactions

·

Income

·

Investment experience

When you are no longer our customer, we continue to share your information as described in this notice.

How?

All financial companies need to share a customer’s personal information to run their everyday business - to process transactions, maintain customer accounts, and report to credit bureaus. In the section below, we list the reasons financial companies can share their customer's personal information; the reasons AdvisorOne chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information

Does AdvisorOne share?

Can you limit this sharing?

For our everyday business purposes --
such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus

Yes

No

For our marketing purposes --
to offer our products and services to you

Yes

No

For joint marketing with other financial companies

Yes

No

For our affiliates’ everyday business purposes --
information about your transactions and experiences

Yes

No

For our affiliates’ everyday business purposes --
information about your creditworthiness

No

We don't share

For nonaffiliates to market to you

No

We don't share

Questions?

Call (866) 811-0225 or go to www.advisoronefunds.com

        

Page 2

 

 

 

 

 

 

 

 

 

Who we are

Who is providing this notice?

AdvisorOne Funds

What we do

How does AdvisorOne protect my personal information?

To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.

How does AdvisorOne collect my personal information?

We collect your personal information, for example, when you

·

open an account

·

give us your income information

·

provide employment information

·

provide account information

·

give us your contact information


We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.

Why can’t I limit all sharing?

Federal law gives you the right to limit only

·

sharing for affiliates’ everyday business purposes—information about your creditworthiness

·

affiliates from using your information to market to you

·

sharing for nonaffiliates to market to you

State laws and individual companies may give you additional rights to limit sharing.

Definitions

Affiliates

Companies related by common ownership or control. They can be financial and nonfinancial companies.

The following companies may be considered affiliates of AdvisorOne:

·

CLS Investments, LLC

·

NorthStar Financial Services Group, LLC

·

Gemcom, LLC

·

Gemini Fund Services, LLC

·

Northern Lights Compliance Services, LLC

·

Northern Lights Distributors, LLC

·

Orion Advisor Services, LLC

·

Constellation Trust Company

Nonaffiliates

Companies not related by common ownership or control. They can be financial and nonfinancial companies.

·

AdvisorOne does not share with nonaffiliates so they can market to you.

Joint marketing

A formal agreement between nonaffiliated financial companies that together market financial products and services to you.

·

Our joint marketing partners include other financial service companies.



 





WHERE TO GO FOR MORE INFORMATION


You will find more information about the Fund in the following documents:

Annual and Semi-annual Reports: Our annual and semi-annual reports list the holdings in the Fund, describe the Fund's performance, include financial statements for the Fund, and discuss the market conditions and strategies that significantly affected the Fund's performance during the last fiscal year.

Statement of Additional Information ("SAI"): The Statement of Additional Information contains additional and more detailed information about the Fund.


The SAI is incorporated by reference into (and is thus a part of) this Prospectus.


There are three ways to get a copy of these documents:

1. Call or write for one, and a copy will be sent without charge.


      AdvisorOne Funds

      c/o Gemini Fund Services, LLC

      4020 South 147th Street, Suite 2

      Omaha, NE 68137

      1-866-811-0225


The Prospectus, Annual Report, Semi-Annual Report and holdings information are available at www.AdvisorOneFunds.com.


2. Write to the Public Reference Room of the Securities and Exchange Commission ("SEC") and ask them to mail you a copy. Or, you may e-mail your request to publicinfo@sec.gov. The SEC charges a fee for this service.


You can also go to the Public Reference Room and copy the documents while you are there. The SEC is located at 100 F Street, NE, Washington, DC 20549-0102.


You may get information about the Public Reference Room and its business hours by writing or calling the number below.


      Public Reference Room - U.S. Securities and Exchange Commission

      100 F Street, N.W.

      Washington, D.C. 20549-0102

      1-202-551-8090


3. Go to the SEC's website (www.sec.gov) and download a free text-only version.

 

If you are a current Fund shareholder and would like information about your account, account transactions, or account statements, please call us at 1-866-811-0225.


If you purchased your shares through a financial institution, you may contact that institution for more information.


The AdvisorOne Funds' Investment Company Act File Number is 811-08037.


1-866-811-0225

www.AdvisorOneFunds.com


www.advisoronefunds.com
4020 S. 147th Street • Omaha, NE 68137
(866) 811-0225

Distributed by Northern Lights Distributors, LLC
Member FINRA

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






 

ADVISORONE FUNDS


Milestone Treasury Obligations Fund


Premium

Class

Shares


PROSPECTUS January 20, 2012

As amended March 19, 2012

4020 S. 147th Street

Omaha, NE 68137

www.advisoronefunds.com

(866) 811-0225




This Prospectus provides important information about the Fund that you should know before investing.  Please read it carefully and keep it for future reference.



These securities have not been approved or disapproved by the Securities and Exchange Commission nor has the Securities and Exchange Commission passed upon the accuracy or adequacy of this Prospectus.  Any representation to the contrary is a criminal offense.





TABLE OF CONTENTS

 

FUND SUMMARY

1

ADDITIONAL INFORMATION ABOUT
PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

3

Investment Strategies

3

Investment Risks

4

MANAGEMENT

4

Investment Adviser

4

Investment Adviser Portfolio Manager

5

HOW SHARES ARE PRICED

5

HOW TO PURCHASE SHARES

5

HOW TO REDEEM SHARES

7

TAX STATUS, DIVIDENDS AND DISTRIBUTIONS

10

FREQUENT PURCHASES AND REDEMPTIONS OF SHARES

11

HOUSEHOLDING

11

FINANCIAL HIGHLIGHTS

12

Privacy Notice

13





FUND SUMMARY


Investment Objective:

The Treasury Obligations Fund is a money market fund that seeks to provide its shareholders with the maximum current income that is consistent with the preservation of capital and the maintenance of liquidity.


Fees and Expenses of the Fund:

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.


Shareholder Fees
(fees paid directly from your investment)

Premium
Class
Shares

Maximum Sales Charge (Load) Imposed on Purchases (as a % of offering price)

None

Maximum Deferred Sales Charge (Load)

None

Maximum Sales Charge (Load) Imposed on Reinvested Dividends

None

Redemption Fee

None

Exchange Fee

None

Annual Fund Operating Expenses
(expenses that you pay each year

as a percentage of the value of your investment)

 

Management Fees

0.10%

Distribution (12b-1) Fees

0.25%

Other Expenses

0.35%

Shareholder Servicing Fees

0.25%

Remaining Other Expenses

0.10%

Total Annual Fund Operating Expenses

0.70%

Fee Waiver and Expense Reimbursements

(0.05)%

Total Annual Fund Operating Expenses After Fee Waivers and Expense Reimbursements *

0.65%

The Fund's adviser has contractually agreed to waive its fees and/or reimburse expenses of the Fund, at least until March 31, 2013, to ensure that Total Annual Fund Operating Expenses After Fee Waiver and Reimbursement (exclusive of any taxes, interest, brokerage commissions, dividend expense on securities sold short, acquired fund fees and expenses, or extraordinary expenses such as litigation or reorganization costs) will not exceed 0.65% of the Fund's average net assets for Financial Class Shares of the Fund.  Additionally, t he Fund's adviser has contractually agreed to waive its fees and/or reimburse expenses of the Fund, at least until March 31, 2013 to ensure that the daily yield will be at least zero for each share class.  These fee waivers and expense reimbursements are subject to possible recoupment from the Fund in future years on a rolling three-year basis (within the three years after the fees have been waived or reimbursed) if such recoupment can be achieved within the foregoing expense limits. This agreement may be terminated only by the Fund's Board of Trustees, on 60 days written notice to the Fund's adviser.


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 remain the same.  Although your actual costs may be higher or lower, based upon these assumptions your costs would be:


Year

Premium Class Shares

1

$66

3

$219

5

$385

10

$866


Principal Investment Strategies:

As a fundamental policy, which cannot be changed without shareholder approval, the Fund invests only in:

 

·

U.S. Treasury obligations maturing in 397 days or less.

·

Repurchase agreements fully collateralized by U.S. Treasury obligations.

The Fund may invest in U.S. Treasury obligations or repurchase agreements without limit. Although the Fund intends to be fully invested in these instruments, it may hold a de minimis amount of cash for a short period prior to investment or payment of the proceeds of redemption.

The Fund will maintain an average maturity computed on a dollar-weighted basis of 60 days or less and a dollar-weighted average life of 120 days or less.

Principal Investment Risks:

Although the Fund invests in short-term Treasury obligations, an investment in the Fund is subject to risk even if all securities in the Fund are paid in full at maturity. All money market instruments, including U.S. Treasury obligations, can change in value in response to changes in interest rates, and a major change in rates could cause the share price to change. While U.S. Treasury obligations are backed by the full faith and credit of the U.S. government, an investment in the Fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation, U.S. government or any other government agency. Thus, while the Fund seeks to maintain a stable net asset value of $1.00 per share, there is no assurance that it will do so. It is possible to lose money by investing in the Fund.  If the seller of a repurchase agreement in which the Fund invests defaults on its obligation or declares bankruptcy, the Fund may experience delays in selling the securities underlying the repurchase agreement. As a result, the Fund may incur losses arising from a decline in the value of those securities, reduced levels of income, and expenses of enforcing its rights.


Performance:


The following bar chart and tables below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund from year to year and by showing how the Fund's average annual returns for one, five and ten years compare with those of a broad measure of market performance. Performance for the period prior to January 20, 2012 is that of the Treasury Obligations Portfolio, a series of The Milestone Funds, the predecessor of the Fund. Past performance (before and after taxes) does not necessarily indicate how the Fund will perform in the future. Updated performance information for AdvisorOne Funds is available at no cost by visiting www.advisoronefunds.com or by calling 1-866-811-0225.


Annual Returns for Years Ended December 31,

[premiumchart001.jpg]

Best Quarter

December 31, 2006

1.18%

Worst Quarter

March 31, 2011

0.00%*

                                                                                                                                * Less than 0.005%









Average Annual Total Returns

(For the periods ended December 31, 2011)


 

1 Year

5 years

10 Years

Premium Class Shares

0.01%

1.12%

1.51%

Lipper U.S. Treasury Money Market Funds Index

0.01%

1.12%

1.46%


The Premium Class Shares' seven-day current yield on December 30, 2011 was 0.01%.

Investment Adviser:  CLS Investments, LLC.


Portfolio Manager:  Marc Pfeffer, Senior Portfolio Manager of the adviser serves as Portfolio Manager of the Fund.  Except for a three-year period during which Mr. Pfeffer worked at Bear Stearns & Co. Inc. (2001-2003), he has been the Portfolio Manager of the Fund, and its predecessor, since 1994.


Purchase and Sale of Fund Shares:  You may purchase and redeem shares of the Fund on any day that the New York Stock Exchange is open for trading, subject to certain restrictions described in the section titled "How Shares Are Priced" of the Fund's Prospectus.  


Purchases and redemptions may be made by mailing an application or redemption request to AdvisorOne Funds c/o Gemini Fund Services, LLC, 4020 South 147th Street, Suite 2, Omaha, Nebraska 68137, by calling 1-866-811-0225 or by visiting the Fund's website www.advisoronefunds.com..  You also may purchase and redeem shares through a financial intermediary.  


The minimum initial investment for Premium Class Shares is $100,000. There is no minimum subsequent investment.


Tax Information:  Dividends and capital gain distributions you receive from the Fund are taxable to you as either ordinary income or capital gains tax rates unless you are investing through a tax-free account.  However, these dividend and capital gain distributions may be taxable upon their eventual withdrawal from tax-deferred plans.


Payments to Broker-Dealers and Other Financial Intermediaries:  If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the 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 the Fund over another investment.  Ask your salesperson or visit your financial intermediary's web site for more information.


ADDITIONAL INFORMATION ABOUT PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

INVESTMENT OBJECTIVE

The Treasury Obligations Fund is a money market fund that seeks to provide its shareholders with the maximum current income that is consistent with the preservation of capital and the maintenance of liquidity.  The Fund's investment objective may be changed without shareholder approval by the Fund's Board of Trustees upon 60 days written notice to shareholders.

PRINCIPAL INVESTMENT STRATEGIES

U.S. Treasury obligations are securities issued by the United States Treasury, such as Treasury bills, notes and bonds that are fully guaranteed as to payment of principal and interest by the United States government.

Repurchase agreements are transactions in which the Fund purchases a security and simultaneously commits to resell that security to the seller at an agreed-upon price on an agreed-upon future date, normally one-to-seven days later. The resale price reflects a market rate of interest that is not related to the coupon rate or maturity of the purchased security.

The Fund enters into repurchase agreements with dealers that the adviser believes present minimal credit risks in accordance with guidelines established by the Board of Trustees of AdvisorOne Funds (the "Board"). The adviser monitors the credit-worthiness of sellers under the Board's general supervision. If a seller defaults on its repurchase obligation, however, the Fund might suffer a loss.

The Fund will make no investment unless the adviser first determines that the investment is eligible for purchase and presents minimal credit risks, pursuant to procedures adopted by the Board. The Fund's investments are subject to the restrictions imposed by Rule 2a-7 under the Investment Company Act of 1940, as amended.

The Fund may purchase U.S. Treasury obligations on a when-issued or forward commitment basis. The Fund may also invest up to 5% of its net assets in illiquid securities. Each of these investment techniques and their related risks are described in detail in the Statement of Additional Information.


PRINCIPAL INVESTMENT RISKS

If the seller of a repurchase agreement in which the Fund invests defaults on its obligation or declares bankruptcy, the Fund may experience delays in selling the securities underlying the repurchase agreement. As a result, the Fund may incur losses arising from a decline in the value of those securities, reduced levels of income, and expenses of enforcing its rights.

TEMPORARY DEFENSIVE POSITIONS

Under abnormal market or economic conditions, the Fund temporarily may hold up to 100% of its investable assets in cash. The Fund may also, under such circumstances, invest in other investment companies. For temporary or emergency purposes, the Fund may borrow up to 33 1/3% of its total assets. When taking such temporary positions, the Fund may not achieve its investment objective.

PORTFOLIO HOLDINGS DISCLOSURE

The Fund will disclose its complete portfolio holdings monthly on its website at www.advisoronefunds.com.  Additionally, the Fund discloses its complete portfolio holdings as of the end of its second fiscal quarter (May 31st) and its fiscal year (November 30th) in its reports to shareholders. The Fund sends reports to its existing shareholders no later than 60 days after the relevant fiscal period, and files these reports with the Securities and Exchange Commission (the "SEC") by the 70th day after the end of the relevant fiscal period.

The Fund files its complete portfolio holdings as of the end of its first and third fiscal quarters (February 28/29 and August 31, respectively) with the SEC on Form N-Q no later than 60 days after the relevant fiscal period.

You can find these filings on the SEC's website, www.sec.gov.

The Statement of Additional Information also describes the policies and procedures that relate to the disclosure of the Fund's portfolio holdings.


MANAGEMENT


Investment Adviser


CLS Investments, LLC ("CLS"), a Nebraska limited liability company, serves as investment adviser to the Fund. CLS (including its predecessor) has been an investment adviser to individuals, employee benefit plans, trusts, investment companies, and corporations since 1989. As of June 30, 2011, CLS managed approximately $9 billion in assets under management.  CLS maintains its principal offices at 4020 South 147th Street, Omaha, Nebraska 68137. CLS is an affiliate of Gemini Fund Services, LLC and Northern Lights Distributors, LLC.


Under the terms of its investment advisory agreement, CLS is responsible for formulating the Fund's investment program and for making day-to-day investment decisions and engaging in portfolio transactions. CLS also furnishes officers, provides office space, services and equipment and supervises all matters relating to the Fund's operations.


The Fund pays CLS a monthly fee at the annualized rate (expressed as a percentage of the Fund's average daily net assets) of 0.10%.


CLS has agreed to defer its advisory fee and reimburse Fund expenses to limit total operating expenses at least through March 31, 2013, so that direct expenses do not exceed 0.65% of the average daily net assets of Premium Class shares of the Fund.  Additionally, the Fund's adviser has contractually agreed to waive its fees and/or reimburse expenses of the Fund, at least until March 31, 2013, to ensure that the daily yield will be at least zero for Premium Class shares of the Fund.


Any deferral and reimbursement may be recouped by CLS from the Fund, to the extent that overall expenses fall below the preceding class-specific limits, within three years of when the amounts were deferred or reimbursed, including with respect to amounts waived or reimbursed by the predecessor fund's adviser pursuant to its expense limitation agreement with the predecessor fund.

 


Investment Adviser Portfolio Manager

Marc Pfeffer joined the adviser as a Senior Portfolio Manager in August 2011.  Previously, Mr. Pfeffer served as Chief Investment Officer of Milestone Capital Management, LLC ("Milestone") since 2004.  Mr. Pfeffer has over 23 years of money market fund investment experience and in addition to serving as Chief Investment Officer, was also head of the portfolio management and the research team at the predecessor Fund's adviser.  Before joining Milestone, Mr. Pfeffer was with Bear, Stearns & Co. Inc. and Goldman Sachs Asset Management ("GSAM").  At GSAM Mr. Pfeffer was responsible for managing six institutional money market portfolios which grew to over $3 billion in total assets as of November 1994. Mr. Pfeffer's portfolio management experience and expertise encompass all aspects of institutional money market fund management, including: portfolio composition and structure; liquidity credit analysis and risk management; compliance review and monitoring; fund administration, accounting, operations and controls.  Mr. Pfeffer holds a BS in Finance from the State University of New York at Buffalo, and an MBA from Fordham University.

The Fund's investment advisory agreement with the adviser is subject to the Board's annual review and approval.  A discussion regarding the basis for the Board's most recent approval of the advisory agreement on August 3, 2011 can be found in the December 20, 2011 Prospectus/Proxy Statement filed by AdvisorOne Funds with the SEC on December 23, 2011.


HOW SHARES ARE PRICED


The net asset value per share of the Fund is determined at 5:00 p.m. (Eastern Time) on each Fund Business Day. The net asset value is determined by subtracting total liabilities from total assets and dividing the remainder by the number of shares outstanding. The Fund's securities are valued at their amortized cost which does not take into account unrealized gains or losses on securities. This method involves initially valuing an instrument at its cost and thereafter assuming a constant amortization to maturity of any Investor paid or accreting discount received. The amortized cost method minimizes changes in the market value of the securities held by the Fund and helps it maintain a stable price of $1.00 per share.


HOW TO PURCHASE SHARES


Types of Accounts


If you are making an initial investment in the Fund, you will need to open an account. You may establish the following types of accounts:


·

Individual or Joint Ownership.  One person owns an individual account while two or more people own a joint account. We will treat each individual owner of a joint account as authorized to give instructions on purchases, sales and exchanges of shares without notice to the other owners. However, we will require each owner's signature guarantee for any transaction requiring a signature guarantee.


·

Gift or Transfer to Minors.  A Custodian maintains a Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) account for the benefit of a minor. To open an UGMA or UTMA account, you must include the minor's social security number on the application.


·

Trust.  A trust can open an account. You must include the name of each trustee, the name of the trust and the date of the trust agreement on the application.


·

Corporations, Partnerships and Other Legal Entities.  Corporations, partnerships and other legal entities may also open an account. A general partner of the partnership or an authorized officer of the corporation or other legal entity must sign the application and resolution form.


·

Retirement.  If you are eligible, you may set up your account under a tax-sheltered retirement plan, such as an Individual Retirement Account (IRA) or Roth IRA, Rollover IRA, SEP-IRA, SIMPLE IRA, Keogh Account, or other retirement plan. Your financial consultant can help you determine if you are eligible.



Distribution Plan and Shareholder Services


The Board of Trustees of AdvisorOne Funds (the “Trust”) has adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act (the "Plan") for Premium Class Shares.  The Plan adopted for such Shares allows the Fund to use part of its assets for the sale and distribution of these Shares, including advertising, marketing and other promotional activities. For these distribution services, under the Plan, the Fund pays the Fund's distributor (the "Distributor") up to the amount indicated below:


The Board has also adopted a Shareholder Services Plan, which provides that the Trust, on behalf of the Fund, may obtain the services of certain financial institutions, broker-dealers, and other financial intermediaries to act as shareholder servicing agents for their customers.  For these services, the Trust may pay the shareholder servicing agent a shareholder servicing fee, up to the amount indicated below, based upon the average daily net assets of the shares owned by investors for which the shareholder servicing agent maintains a servicing relationship.  Payments under the Shareholder Services Plan may vary and are determined by the Trust in its sole discretion, in amounts up to the amount indicated below.


Fees

Premium Class Shares

Distribution (12b-1) Fees

0.25%

Shareholder Servicing Fees

0.25%


The Distributor may use monies authorized by the Plan to compensate other parties that have entered into selling agreements with Distributor with respect to the distribution of Fund shares.  


Because these distribution and shareholder service fees are paid out of the Fund's assets on an ongoing basis, the fees may, over time, increase the cost of investing in the Fund and cost investors more than other types of sales loads.  Pursuant to the 1940 Act, you will have exclusive voting rights with respect to the Plan for Premium Class Shares.


ADDITIONAL SHARE CLASSES

In addition to the Premium Class Shares, the Fund also offers Institutional Class Shares, Investor Class Shares and Financial Class Shares by separate prospectuses. For further information about these other classes of shares, please call (866) 811-0225.


Purchasing Shares


Good Order:  When making a purchase request, make sure your request is in good order.  "Good order" means your purchase request includes:


·

the name of the Fund

·

the dollar amount of shares to be purchased

·

a completed purchase application or investment stub

·

check payable to the applicable Fund


The minimum initial investment for Premium Class Shares is $100,000.  

AdvisorOne Funds or CLS may waive or lower the minimum in certain cases. You must complete and sign an application for each account you open.


The Fund and the Distributor each reserves the right to reject any purchase for any reason and to cancel any purchase due to non-payment. You must make all purchases in United States dollars and draw all checks on United States banks. If we cancel your purchase due to non-payment, you will be responsible for any loss the Fund incurs. We will not accept cash or third-party checks for the purchase of shares.


Method of Purchase


Purchase Procedures

 

 

Through a Financial Professional

Contact your financial consultant. Your financial consultant can tell you the time by which you must submit your order to begin receiving dividends that day. Your Financial Consultant must transmit the order to the Fund before 5:00 p.m. Eastern time).

 

 

Through Brokers

The Distributor authorizes certain securities dealers, banks or other financial service firms (collectively, "brokers") to purchase your shares. To receive that day's share price:

·

you must place your order with the broker before 5:00 p.m. Eastern time.

 

 

By Mail

To purchase Shares, send your completed application to:

AdvisorOne Funds

c/o Gemini Fund Services, LLC

4020 South 147th Street, Suite 2

  

Omaha, NE 68137                 

 Include with your application your check, payable to "AdvisorOne Funds"

 

 

By Wire

If you wish to wire money to make a subsequent investment in the Fund, please call 1-866-811-0225 for wiring instructions and to notify the Fund that a wire is coming.  Any commercial bank can transfer same-day funds by wire.  The Fund will normally accept wired funds for investment on the day received if they are received by the Fund's designated bank before the close of regular trading on the NYSE. Your bank may charge you for wiring same-day funds.

 

 

By Telephone     

You may make subsequent purchases in your account by telephoning 1-866-811-0225 between 8:30 a.m. and 5:00 p.m. Eastern time on any day the Fund is open. We will electronically transfer money from the bank account you designate on your Application to our account with AdvisorOne Funds. This investment option is only available if you have not declined or cancelled your telephone investment privilege.

 

 

IMPORTANT NOTES

Once you have requested a telephone transaction, and a confirmation number has been assigned, the transaction cannot be revoked. We reserve the right to refuse any purchase request.


HOW TO REDEEM SHARES


You have the right to sell ("redeem") all or any part of your shares subject to certain restrictions. Selling your shares in the Fund is referred to as a "redemption" because the Fund buys back its shares. We will redeem your shares at the NAV next computed following receipt of your redemption request in good order. See Redemption Procedures Request in Good Order.


We will mail your redemption proceeds to your address of record or transmit them electronically to your designated bank account. Except under certain extraordinary conditions, we will send your redemption to you within seven days after we receive your redemption request. If you purchase shares by check and, soon after, request a redemption, your redemption request will not be processed until the check used for your purchase has cleared (usually within 10 days).


The Fund cannot accept requests that specify a certain date for redemption or which specify any other special conditions.  Redemption proceeds must be payable to the registered shareholder(s) of the account or to a financial intermediary for the benefit of the registered shareholder(s) of the account.  Please call 1-866-811-0225 for further information.  We will not process your redemption request if it is not in good order.  We will notify you if your redemption request is not in good order.


If, as a result of your redemption, your account value drops below $2,500, we may redeem the remaining shares in your account.  We will notify you in writing of our intent to redeem your shares.  We will allow at least sixty days thereafter for you to make an additional investment to bring your account value up to at least the minimum amount before we will process the redemption.


Medallion Signature Guarantees


Your redemption request must be accompanied by a "medallion signature guarantee" under certain circumstances, such as sending the redemption proceeds to an address other than the address of record.


Third Party Transactions


If you buy and redeem shares of the Fund through a member of the Financial Industry Regulatory Authority, Inc. that member may charge a fee for that service.  The Fund has authorized one or more brokers to accept on its behalf purchase and redemption orders. Such brokers are authorized to designate intermediaries to accept orders on the Fund's behalf. The Fund will be deemed to have received the order when an authorized broker or a broker authorized designee accepts your order. Your order will be priced at the Fund's net asset value next computed after it is received by the authorized broker or broker authorized designee.


CLS may pay certain financial institutions (which may include banks, brokers, securities dealers and other industry professionals) a fee for providing distribution related services and/or for performing certain administrative and servicing functions for Fund shareholders and/or making the funds available for purchase on their platforms.  These payments are made from CLS and are not charged to the Funds, unless part of an approved plan.


Redemptions in Kind


The Fund reserves the right to honor requests for redemption or repurchase orders by making payment in whole or in part in readily marketable securities ("redemption in kind") if the amount of such a request is large enough to affect operations (for example, if the request is greater than $250,000 or 1% of the Fund's assets). The securities will be chosen by the Fund and valued at the Fund's net asset value. A shareholder may incur transaction expenses in converting these securities to cash.


Method of

Redemption


Redemption Procedures

 

 

By Telephone     



You may authorize redemption of some or all shares in your account with the Fund by telephoning the Fund at 1-866-811-0225 between 8:30 a.m. and 5:00 p.m. Eastern time on any day the Fund is open.


You will NOT be eligible to use the telephone redemption service if you:

·

have declined or canceled your telephone investment privilege;

·

wish to redeem shares valued at $50,000 or greater or if you ask us to send the redemption proceeds to an address other than the address of record for the account;

·

must provide supporting legal documents such as a signature guarantee for redemption

·

have an account set up as a corporation, trust or partnership; or

·

wish to redeem from a retirement account.

 

 

By Mail         

If you are redeeming Shares, you may send your redemption request to:

AdvisorOne Funds

c/o Gemini Fund Services, LLC

4020 South 147th Street, Suite 2

Omaha, NE 68137

 

You must include the following information in your written request:

·

a letter of instruction stating the name of the Fund, the number of shares you are redeeming, the names in which the account is registered and your account number;

·

other supporting legal documents, if necessary, for redemption requests by corporations, trusts and partnerships;

·

a signature guarantee, if necessary.

 

 

By Wire          

You may request your redemption proceeds be wired directly to the bank account designated on your application. The Fund's transfer agent will charge you a $10.00 fee for each wire redemption. The transfer agent will deduct the fee directly from your account. Your bank may also impose a fee for the incoming wire.

 

 

Request in "Good Order"

For our mutual protection, all redemption requests must include:

·

your account number;

·

the amount of the transaction;

·

for mail request, signatures of all owners EXACTLY as registered on the account and signature guarantees, if required (signature guarantees can be obtained at most banks, credit unions, and licensed brokers); and

·

any supporting legal documentation that may be required.


Your redemption request will be processed at the next determined share price after we have received all required information.

 

 

IMPORTANT NOTE

Once we have processed your redemption request, and a confirmation number has been given, the transaction cannot be revoked.



Options For Redemption Proceeds


You may receive your redemption proceeds by check or by wire.


Check Redemptions:  Normally we will mail your check within two business days of a redemption.


Wire Redemptions:  Before you can receive redemption proceeds by wire, you must establish this option by completing a special form or the appropriate section of your account application.


You may request that your redemption proceeds be wired directly to your bank account.  AdvisorOne Funds' transfer agent imposes a $10.00 fee for each wire redemption and deducts the fee directly from your account.  Your bank may also impose a fee for the incoming wire.  The redemption proceeds must be paid to the same bank and account as designated on the application or in written instructions in proper form subsequently received by AdvisorOne Funds.


Telephone Redemptions and Exchanges  


We will automatically establish the telephone redemption option for your account, unless you instruct us otherwise in writing. Telephone redemptions are easy and convenient, but this account option involves a risk of loss from unauthorized or fraudulent transactions. We will take reasonable precautions to protect your account from fraud. You should do the same by keeping your account information private and by reviewing immediately any account statements and confirmations that you receive. Please contact us immediately about any transaction you believe to be unauthorized.


AdvisorOne Funds reserves the right to refuse a telephone redemption or exchange if the caller cannot provide:

 

·

the account number

·

the name and address exactly as registered on the account

·

the primary social security or employer identification number as registered on the account


We may also require a password from the caller.


AdvisorOne Funds will not be responsible for any account losses due to telephone fraud, so long as we have taken reasonable steps to verify the caller's identity. If you wish to cancel the telephone redemption feature for your account, please notify us in writing.



HOW TO EXCHANGE SHARES


The exchange privilege is a convenient way to buy shares in another fund in order to respond to changes in your investment goals or in market conditions. You may exchange your Premium Class Shares for Class N shares of any fund that is a series of AdvisorOne Funds without paying any sales charge.


If you establish a new account by exchange, the exchanged shares must have a minimum value of $2,500.  


You may exchange shares either by telephone, if you have not canceled your telephone privilege, or in writing. Written requests for exchange must provide the following:


· current Funds name;

· account names and numbers;

· the amount you wish to exchange;

· specify the shareholder privileges you wish to retain (e.g., Telephone Privileges); and

· signatures of all registered owners.


To exchange shares by telephone, you should call 1-866-811-0225 between 8:30 a.m. and 4:00 p.m. Eastern time on any day the Fund is open. We will process telephone requests made after 4:00 p.m. Eastern time at the close of business on the next business day. You should notify the Fund in writing of all shareholder service privileges you wish to continue in any new account opened by a telephone exchange request. Please note that we will only accept exchanges if your ownership registrations in both accounts are identical.


We will value your exchanged shares at their respective net asset value next determined after the receipt of the exchange request. We will not impose an initial sales charge, redemption fee or penalty on exchanges. An exchange transaction is a sale and a purchase of shares for federal income tax purposes and may result in a capital gain or loss.

 

Systematic Exchange Program


The Systematic Exchange Program allows you to make regular, systematic exchanges from one AdvisorOne Fund account into an AdvisorOne Fund Milestone Treasury Obligations Fund Institutional Class Shares account. By setting up the program, you authorize the Fund and its agents to redeem a set dollar amount or number of shares from the first account and purchase Institutional Class Shares of the Milestone Treasury Obligations Fund.


To participate in the Systematic Exchange Program, you must have an initial account balance of $10,000 in the first account. Exchanges may be made on any day or days of your choice. If the amount remaining in the first account is less than the exchange amount you requested, then the remaining amount will be exchanged. At such time as the first account has a zero balance, your participation in the program will be terminated. You may also terminate the program by calling or writing the Fund. Once participation in the program has been terminated for any reason, to reinstate the program you must do so in writing; simply investing additional funds will not reinstate the program.


Exchanging Shares Purchased Through Your Financial Advisor. If fund shares were purchased through your Financial Advisor, initiate your exchange order by contacting your Financial Advisor.



Transferring Registration


You can transfer the registration of your shares in the Fund to another owner by completing a transfer form and sending it to the AdvisorOne Funds, 4020 South 147th Street, Suite 2, Omaha, Nebraska 68137.


TAX STATUS, DIVIDENDS AND DISTRIBUTIONS


DIVIDENDS

Dividends are declared daily and paid monthly, following the close of the last Fund Business Day of the month. Shares purchased by wire before 5:00 p.m. (Eastern Time) begin earning dividends that day. Dividends are automatically reinvested on payment dates in additional shares of the Fund unless cash payments are requested by contacting the Trust. The election to reinvest dividends and distributions or receive them in cash may be changed at any time upon written notice to the Transfer Agent. All dividends and other distributions are treated in the same manner for federal income tax purposes whether received in cash or reinvested in shares of the Fund. If no election is made, all dividends and distributions will be reinvested.


CAPITAL GAINS DISTRIBUTIONS

Net realized short-term capital gains, if any, will be distributed whenever the Trustees determine that such distributions would be in the best interest of the shareholders, which will be at least once per year. The Trust does not anticipate that the Fund will realize any long-term capital gains, but should they occur, they also will be distributed at least once every 12 months.

TAX MATTERS

Dividends paid by the Fund out of its net investment income (including realized net short-term capital gains) are taxable to the shareholders of the Fund as ordinary income. Distributions of net long-term capital gains, if any, realized by the Fund are taxable to the shareholders as long-term capital gains, regardless of the length of time the shareholder may have held shares in the Fund at the time of distribution. Distributions are subject to federal income tax when they are paid, whether received in cash or reinvested in shares of the Fund. Distributions declared in December and paid in January, however, are taxable as if paid on December 31st.

The Fund is required by federal law to withhold 28%, or such other amounts as required by federal law, of reportable payments (which may include dividends and capital gain distributions) paid to a non-corporate shareholder unless that shareholder certifies in writing that the social security or other taxpayer identification number provided is correct and that the shareholder is not subject to backup withholding for prior underreporting to the Internal Revenue Service.

Some states and localities do not tax dividends paid on shares of the Fund that are attributable to interest from U.S. Treasury obligations (but not necessarily interest earned on repurchase agreements).

Reports containing appropriate information with respect to the federal income tax status of dividends, distributions and redemptions, including the proportions attributable to capital gains and interest on U.S. Treasury obligations, paid during the year by the Fund will be mailed to shareholders shortly after the close of each calendar year.

The foregoing is only a summary of some of the tax considerations generally affecting the Fund and its shareholders. The Statement of Additional Information contains a more detailed discussion. Because other federal, state or local tax considerations may apply, investors are urged to consult their tax advisors.


FREQUENT PURCHASES AND REDEMPTIONS OF SHARES


To allow the adviser to manage the Fund most effectively, investors are encouraged to execute as many trades as possible before 2:30 p.m. To protect the Fund's performance and shareholders, the adviser discourages frequent trading in response to short-term market fluctuations. The Trust and the Transfer Agent each reserves the right to reject any purchase order for any reason. Because many investors acquire shares of money market funds as short-term investments, however, the Board has not adopted a policy with respect to frequent purchases and redemptions of the Fund's shares.


HOUSEHOLDING

To reduce expenses, we mail only one copy of the prospectus and each annual and semi-annual report to those addresses share by two or more accounts. If you wish to receive individual copies of these documents, please call the Fund at (866) 811-0225 between the hours of 8:30 a.m. and 7:00 p.m. Eastern Time on days the Fund is open for business or contact your financial institution. We will begin sending you individual copies thirty days after receiving your request.



FINANCIAL HIGHLIGHTS


The financial highlights table is intended to help you understand the Fund's financial performance over the past five years. The total returns in the tables represent the rate that an investor would have earned (or lost) on an investment in Premium Class Shares of the Fund (assuming reinvestment of all dividends and distributions). For the fiscal years ended November 30, 2011, November 30, 2010, November 30, 2009, November 30, 2008, and November 30, 2007, the information has been audited by Tait, Weller & Baker LLP, independent registered public accounting firm, whose report, along with the predecessor fund's financial statements, are included in the predecessor fund's Annual Report, which is available upon request.    



 

 

 

 

 

                                              Premium Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                          Year Ended November 30,

 

 

 

 

 

2011

 

2010

 

2009

 

2008

 

2007

Net asset value, beginning of year

 

 $       1.00

 

 $      1.00

 

 $        1.00

 

 $       1.00

 

 $       1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Activity from investment operations:

 

 

 

 

 

 

 

 

 

 

Net investment loss

 

0.000

(1,2)

0.000

(2)

0.000

(2)

0.015

 

0.044

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less distributions from:

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

(0.000)

(2)

(0.000)

(2)

(0.000)

(2)

(0.015)

 

(0.044)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net asset value, end of year

 

 

 $       1.00

 

 $      1.00

 

 $       1.00

 

 $       1.00

 

 $       1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total return

 

 

 

0.01%

 

0.01%

 

0.01%

 

1.55%

 

4.52%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets, at end of year (000s)

 

$    47,872

 

$ 365,987

 

 $  388,501

 

 $   95,718

 

 $   96,511

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of gross expenses to average

 

 

 

 

 

 

 

 

 

 

net assets (3)

 

 

 

0.70%

 

0.65%

 

0.65%

 

0.65%

 

0.64%

Ratio of net expenses to average

 

 

 

 

 

 

 

 

 

 

 

net assets (4)

 

 

 

0.13%

 

0.19%

 

0.29%

 

0.64%

(6)

0.64%

Ratio of net investment income

 

 

 

 

 

 

 

 

 

 

 

to average net assets

 

0.00%

 

0.00%

(5)

0.00%

(5)

1.53%

 

4.44%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Per share amounts calculated using the average shares method, which more appropriately presents the per share data for the period.

(2)

Amount represents less than $0.01 per share.

 

 

 

 

 

 

 

 

(3)

Represents the ratio of expenses to average net assets absent fee waivers and/or expense reimbursements by the Advisor.

(4)

The adviser has agreed to waive additional fees in order to maintain a positive return. The additional waiver, 0.01%, 0.01%, 0.36%,

 

0.46% and 0.52% for the periods ended November 30, 2007 through November 30, 2011, respectively, decreased the net expense ratio.

(5)

Less than 0.005%.

 

 

 

 

 

 

 

 









[institutionalshares006.jpg]                                                                                                             Rev. June 2011

FACTS

WHAT DOES ADVISORONE FUNDS ("ADVISORONE") DO WITH YOUR PERSONAL INFORMATION?

Why?

Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.

What?

The types of personal information we collect and share depend on the product or service you have with us. This information can include:

·

Social Security number

·

Employment information

·

Account balances

·

Account transactions

·

Income

·

Investment experience

When you are no longer our customer, we continue to share your information as described in this notice.

How?

All financial companies need to share a customer’s personal information to run their everyday business - to process transactions, maintain customer accounts, and report to credit bureaus. In the section below, we list the reasons financial companies can share their customer's personal information; the reasons AdvisorOne chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information

Does AdvisorOne share?

Can you limit this sharing?

For our everyday business purposes --
such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus

Yes

No

For our marketing purposes --
to offer our products and services to you

Yes

No

For joint marketing with other financial companies

Yes

No

For our affiliates’ everyday business purposes --
information about your transactions and experiences

Yes

No

For our affiliates’ everyday business purposes --
information about your creditworthiness

No

We don't share

For nonaffiliates to market to you

No

We don't share

Questions?

Call (866) 811-0225 or go to www.advisoronefunds.com

        

Page 2

 

 

 

 

 

 

 

 

 

Who we are

Who is providing this notice?

AdvisorOne Funds

What we do

How does AdvisorOne protect my personal information?

To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.

How does AdvisorOne collect my personal information?

We collect your personal information, for example, when you

·

open an account

·

give us your income information

·

provide employment information

·

provide account information

·

give us your contact information


We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.

Why can’t I limit all sharing?

Federal law gives you the right to limit only

·

sharing for affiliates’ everyday business purposes—information about your creditworthiness

·

affiliates from using your information to market to you

·

sharing for nonaffiliates to market to you

State laws and individual companies may give you additional rights to limit sharing.

Definitions

Affiliates

Companies related by common ownership or control. They can be financial and nonfinancial companies.

The following companies may be considered affiliates of AdvisorOne:

·

CLS Investments, LLC

·

NorthStar Financial Services Group, LLC

·

Gemcom, LLC

·

Gemini Fund Services, LLC

·

Northern Lights Compliance Services, LLC

·

Northern Lights Distributors, LLC

·

Orion Advisor Services, LLC

·

Constellation Trust Company

Nonaffiliates

Companies not related by common ownership or control. They can be financial and nonfinancial companies.

·

AdvisorOne does not share with nonaffiliates so they can market to you.

Joint marketing

A formal agreement between nonaffiliated financial companies that together market financial products and services to you.

·

Our joint marketing partners include other financial service companies.









WHERE TO GO FOR MORE INFORMATION


You will find more information about the Fund in the following documents:

Annual and Semi-annual Reports: Our annual and semi-annual reports list the holdings in the Fund, describe the Fund's performance, include financial statements for the Fund, and discuss the market conditions and strategies that significantly affected the Fund's performance during the last fiscal year.

Statement of Additional Information ("SAI"): The Statement of Additional Information contains additional and more detailed information about the Fund.


The SAI is incorporated by reference into (and is thus a part of) this Prospectus.


There are three ways to get a copy of these documents:

1. Call or write for one, and a copy will be sent without charge.


      AdvisorOne Funds

      c/o Gemini Fund Services, LLC

      4020 South 147th Street, Suite 2

      Omaha, NE 68137

      1-866-811-0225


The Prospectus, Annual Report, Semi-Annual Report and holdings information are available at www.AdvisorOneFunds.com.


2. Write to the Public Reference Room of the Securities and Exchange Commission ("SEC") and ask them to mail you a copy. Or, you may e-mail your request to publicinfo@sec.gov. The SEC charges a fee for this service.


You can also go to the Public Reference Room and copy the documents while you are there. The SEC is located at 100 F Street, NE, Washington, DC 20549-0102.


You may get information about the Public Reference Room and its business hours by writing or calling the number below.


      Public Reference Room - U.S. Securities and Exchange Commission

      100 F Street, N.W.

      Washington, D.C. 20549-0102

      1-202-551-8090


3. Go to the SEC's website (www.sec.gov) and download a free text-only version.

 

If you are a current Fund shareholder and would like information about your account, account transactions, or account statements, please call us at 1-866-811-0225.


If you purchased your shares through a financial institution, you may contact that institution for more information.


The AdvisorOne Funds' Investment Company Act File Number is 811-08037.


1-866-811-0225

www.AdvisorOneFunds.com




www.advisoronefunds.com
4020 S. 147th Street • Omaha, NE 68137
(866) 811-0225

Distributed by Northern Lights Distributors, LLC
Member FINRA

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






 

ADVISORONE FUNDS


Milestone Treasury Obligations Fund


Financial

Class

Shares


PROSPECTUS January 20, 2012

As amended March 19. 2012


4020 S. 147th Street

Omaha, NE 68137

www.advisoronefunds.com

(866) 811-0225




This Prospectus provides important information about the Fund that you should know before investing.  Please read it carefully and keep it for future reference.



These securities have not been approved or disapproved by the Securities and Exchange Commission nor has the Securities and Exchange Commission passed upon the accuracy or adequacy of this Prospectus.  Any representation to the contrary is a criminal offense.






TABLE OF CONTENTS

 

FUND SUMMARY

1

ADDITIONAL INFORMATION ABOUT
PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

3

Investment Strategies

3

Investment Risks

4

MANAGEMENT

4

Investment Adviser

4

Investment Adviser Portfolio Manager

5

HOW SHARES ARE PRICED

5

HOW TO PURCHASE SHARES

5

HOW TO REDEEM SHARES

7

TAX STATUS, DIVIDENDS AND DISTRIBUTIONS

9

FREQUENT PURCHASES AND REDEMPTIONS OF SHARES

10

HOUSEHOLDING

10

FINANCIAL HIGHLIGHTS

11

Privacy Notice

12





FUND SUMMARY


Investment Objective:

The Treasury Obligations Fund is a money market fund that seeks to provide its shareholders with the maximum current income that is consistent with the preservation of capital and the maintenance of liquidity.


Fees and Expenses of the Fund:

This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.


Shareholder Fees
(fees paid directly from your investment)

Financial
Class
Shares

Maximum Sales Charge (Load) Imposed on Purchases (as a % of offering price)

None

Maximum Deferred Sales Charge (Load)

None

Maximum Sales Charge (Load) Imposed on Reinvested Dividends

None

Redemption Fee

None

Exchange Fee

None

Annual Fund Operating Expenses
(expenses that you pay each year

as a percentage of the value of your investment)

 

Management Fees

0.10%

Distribution (12b-1) Fees

None

Other Expenses

0.14%

Shareholder Servicing Fees

0.05%

Remaining Other Expenses

0.09%

Total Annual Fund Operating Expenses

0.24%

Fee Waiver and Expense Reimbursements*

(0.09)%

Total Annual Fund Operating Expenses After Fee Waivers and Expense Reimbursements

0.15%

*The Fund's adviser has contractually agreed to waive its fees and/or reimburse expenses of the Fund, at least until March 31, 2013 , to ensure that Total Annual Fund Operating Expenses After Fee Waiver and Reimbursement (exclusive of any taxes, interest, brokerage commissions, dividend expense on securities sold short, acquired fund fees and expenses, or extraordinary expenses such as litigation or reorganization costs) will not exceed 0.15% of the Fund's average net assets for Financial Class Shares of the Fund.  Additionally, the Fund's adviser has contractually agreed to waive its fees and/or reimburse expenses of the Fund, at least until March 31, 2013 to ensure that the daily yield will be at least zero for Financial Class Shares of the Fund.  These fee waivers and expense reimbursements are subject to possible recoupment from the Fund in future years on a rolling three-year basis (within the three years after the fees have been waived or reimbursed) if such recoupment can be achieved within the foregoing expense limits. These agreements may be terminated only by the Fund's Board of Trustees, on 60 days written notice to the Fund's adviser.


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 remain the same.  Although your actual costs may be higher or lower, based upon these assumptions your costs would be:


Year

Financial Class Shares

1

$15

3

$68

5

$126

10

$297


Principal Investment Strategies:

As a fundamental policy, which cannot be changed without shareholder approval, the Fund invests only in:

 

·

U.S. Treasury obligations maturing in 397 days or less.

·

Repurchase agreements fully collateralized by U.S. Treasury obligations.

The Fund may invest in U.S. Treasury obligations or repurchase agreements without limit. Although the Fund intends to be fully invested in these instruments, it may hold a de minimis amount of cash for a short period prior to investment or payment of the proceeds of redemption.

The Fund will maintain an average maturity computed on a dollar-weighted basis of 60 days or less and a dollar-weighted average life of 120 days or less.

Principal Investment Risks:

Although the Fund invests in short-term Treasury obligations, an investment in the Fund is subject to risk even if all securities in the Fund are paid in full at maturity. All money market instruments, including U.S. Treasury obligations, can change in value in response to changes in interest rates, and a major change in rates could cause the share price to change. While U.S. Treasury obligations are backed by the full faith and credit of the U.S. government, an investment in the Fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation, U.S. government or any other government agency. Thus, while the Fund seeks to maintain a stable net asset value of $1.00 per share, there is no assurance that it will do so. It is possible to lose money by investing in the Fund.  If the seller of a repurchase agreement in which the Fund invests defaults on its obligation or declares bankruptcy, the Fund may experience delays in selling the securities underlying the repurchase agreement. As a result, the Fund may incur losses arising from a decline in the value of those securities, reduced levels of income, and expenses of enforcing its rights.


Performance:


The following bar chart and tables below provide some indication of the risks of investing in the Fund by showing changes in the performance of the Fund from year to year and by showing how the Fund's average annual returns for one, five and ten years compare with those of a broad measure of market performance. Performance for the period prior to January 20, 2012 is that of the Treasury Obligations Portfolio, a series of The Milestone Funds, the predecessor of the Fund. Past performance (before and after taxes) does not necessarily indicate how the Fund will perform in the future. Updated performance information for AdvisorOne Funds is available at no cost by visiting www.advisoronefunds.com or by calling 1-866-811-0225.


Annual Returns for Years Ended December 31,


[financialshares005.gif]


Best Quarter

December  31, 2006

1.30%

Worst Quarter

December 31, 2011

0.00%


Average Annual Total Returns

(For the periods ended December 31, 2011)


 

1 Year

5 years

10 Years

Financial Class Shares

0.01%

1.36%

1.87%

Lipper U.S. Treasury Money Market Funds Index

0.01%

1.12%

1.46%


The Financial Class Shares' seven-day current yield on December 30, 2011 was 0.01%.


Investment Adviser:  CLS Investments, LLC.


Portfolio Manager:  Marc Pfeffer, Senior Portfolio Manager of the adviser serves as Portfolio Manager of the Fund.  Except for a three-year period during which Mr. Pfeffer worked at Bear Stearns & Co. Inc. (2001-2003), he has been the Portfolio Manager of the Fund, and its predecessor, since 1994.


Purchase and Sale of Fund Shares:  You may purchase and redeem shares of the Fund on any day that the New York Stock Exchange is open for trading, subject to certain restrictions described in the section titled "How Shares Are Priced" of the Fund's Prospectus.  


Purchases and redemptions may be made by mailing an application or redemption request to AdvisorOne Funds c/o Gemini Fund Services, LLC, 4020 South 147th Street, Suite 2, Omaha, Nebraska 68137, by calling 1-866-811-0225 or by visiting the Fund's website www.advisoronefunds.com.  You also may purchase and redeem shares through a financial intermediary.  


The minimum initial investment for Financial Class Shares is $20,000,000. There is no minimum subsequent investment.


Tax Information:  Dividends and capital gain distributions you receive from the Fund are taxable to you as either ordinary income or capital gains tax rates unless you are investing through a tax-free account.  However, these dividend and capital gain distributions may be taxable upon their eventual withdrawal from tax-deferred plans.


Payments to Broker-Dealers and Other Financial Intermediaries:  If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the 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 the Fund over another investment.  Ask your salesperson or visit your financial intermediary's web site for more information.


ADDITIONAL INFORMATION ABOUT PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

INVESTMENT OBJECTIVE

The Treasury Obligations Fund is a money market fund that seeks to provide its shareholders with the maximum current income that is consistent with the preservation of capital and the maintenance of liquidity.  The Fund's investment objective may be changed without shareholder approval by the Fund's Board of Trustees upon 60 days written notice to shareholders.

PRINCIPAL INVESTMENT STRATEGIES

U.S. Treasury obligations are securities issued by the United States Treasury, such as Treasury bills, notes and bonds that are fully guaranteed as to payment of principal and interest by the United States government.

Repurchase agreements are transactions in which the Fund purchases a security and simultaneously commits to resell that security to the seller at an agreed-upon price on an agreed-upon future date, normally one-to-seven days later. The resale price reflects a market rate of interest that is not related to the coupon rate or maturity of the purchased security.

The Fund enters into repurchase agreements with dealers that the adviser believes present minimal credit risks in accordance with guidelines established by the Board of Trustees of AdvisorOne Funds (the "Board"). The adviser monitors the credit-worthiness of sellers under the Board's general supervision. If a seller defaults on its repurchase obligation, however, the Fund might suffer a loss.

The Fund will make no investment unless the adviser first determines that the investment is eligible for purchase and presents minimal credit risks, pursuant to procedures adopted by the Board. The Fund's investments are subject to the restrictions imposed by Rule 2a-7 under the Investment Company Act of 1940, as amended.

The Fund may purchase U.S. Treasury obligations on a when-issued or forward commitment basis. The Fund may also invest up to 5% of its net assets in illiquid securities. Each of these investment techniques and their related risks are described in detail in the Statement of Additional Information.


PRINCIPAL INVESTMENT RISKS

If the seller of a repurchase agreement in which the Fund invests defaults on its obligation or declares bankruptcy, the Fund may experience delays in selling the securities underlying the repurchase agreement. As a result, the Fund may incur losses arising from a decline in the value of those securities, reduced levels of income, and expenses of enforcing its rights.

TEMPORARY DEFENSIVE POSITIONS

Under abnormal market or economic conditions, the Fund temporarily may hold up to 100% of its investable assets in cash. The Fund may also, under such circumstances, invest in other investment companies. For temporary or emergency purposes, the Fund may borrow up to 33 1/3% of its total assets. When taking such temporary positions, the Fund may not achieve its investment objective.

PORTFOLIO HOLDINGS DISCLOSURE

The Fund will disclose its complete portfolio holdings monthly on its website at www.advisoronefunds.com.  Additionally, the Fund discloses its complete portfolio holdings as of the end of its second fiscal quarter (May 31st) and its fiscal year (November 30th) in its reports to shareholders. The Fund sends reports to its existing shareholders no later than 60 days after the relevant fiscal period, and files these reports with the Securities and Exchange Commission (the "SEC") by the 70th day after the end of the relevant fiscal period.

The Fund files its complete portfolio holdings as of the end of its first and third fiscal quarters (February 28/29 and August 31, respectively) with the SEC on Form N-Q no later than 60 days after the relevant fiscal period.

You can find these filings on the SEC's website, www.sec.gov.

The Statement of Additional Information also describes the policies and procedures that relate to the disclosure of the Fund's portfolio holdings.


MANAGEMENT


Investment Adviser


CLS Investments, LLC ("CLS"), a Nebraska limited liability company, serves as investment adviser to the Fund. CLS (including its predecessor) has been an investment adviser to individuals, employee benefit plans, trusts, investment companies, and corporations since 1989. As of June 30, 2011, CLS managed approximately $9 billion in assets under management.  CLS maintains its principal offices at 4020 South 147th Street, Omaha, Nebraska 68137. CLS is an affiliate of Gemini Fund Services, LLC and Northern Lights Distributors, LLC.


Under the terms of its investment advisory agreement, CLS is responsible for formulating the Fund's investment program and for making day-to-day investment decisions and engaging in portfolio transactions. CLS also furnishes officers, provides office space, services and equipment and supervises all matters relating to the Fund's operations.


The Fund pays CLS a monthly fee at the annualized rate (expressed as a percentage of the Fund's average daily net assets) of 0.10%.


CLS has agreed to defer its advisory fee and reimburse Fund expenses to limit total operating expenses at least through March 31, 2013, so that direct expenses do not exceed 0.15% of the average daily net assets of Financial Class shares of the Fund.  Additionally, the Fund's adviser has contractually agreed to waive its fees and/or reimburse expenses of the Fund, at least until March 31, 2013, to ensure that the daily yield will be at least zero for Financial Class shares of the Fund.


Any deferral and reimbursement may be recouped by CLS from the Fund, to the extent that overall expenses fall below the preceding class-specific limits, within three years of when the amounts were deferred or reimbursed, including with respect to amounts waived or reimbursed by the predecessor fund's adviser pursuant to its expense limitation agreement with the predecessor fund.


Investment Adviser Portfolio Manager

Marc Pfeffer joined the adviser as a Senior Portfolio Manager in August 2011.  Previously, Mr. Pfeffer served as Chief Investment Officer of Milestone Capital Management, LLC ("Milestone") since 2004.  Mr. Pfeffer has over 23 years of money market fund investment experience and in addition to serving as Chief Investment Officer, was also head of the portfolio management and the research team at the predecessor Fund's adviser.  Before joining Milestone, Mr. Pfeffer was with Bear, Stearns & Co. Inc. and Goldman Sachs Asset Management ("GSAM").  At GSAM Mr. Pfeffer was responsible for managing six institutional money market portfolios which grew to over $3 billion in total assets as of November 1994. Mr. Pfeffer's portfolio management experience and expertise encompass all aspects of institutional money market fund management, including: portfolio composition and structure; liquidity credit analysis and risk management; compliance review and monitoring; fund administration, accounting, operations and controls.  Mr. Pfeffer holds a BS in Finance from the State University of New York at Buffalo, and an MBA from Fordham University.

The Fund's investment advisory agreement with the adviser is subject to the Board's annual review and approval.  A discussion regarding the basis for the Board's most recent approval of the advisory agreement on August 3, 2011 can be found in the December 20, 2011 Prospectus/Proxy Statement filed by AdvisorOne Funds with the SEC on December 23, 2011.

HOW SHARES ARE PRICED


The net asset value per share of the Fund is determined at 5:00 p.m. (Eastern Time) on each Fund Business Day. The net asset value is determined by subtracting total liabilities from total assets and dividing the remainder by the number of shares outstanding. The Fund's securities are valued at their amortized cost which does not take into account unrealized gains or losses on securities. This method involves initially valuing an instrument at its cost and thereafter assuming a constant amortization to maturity of any Investor paid or accreting discount received. The amortized cost method minimizes changes in the market value of the securities held by the Fund and helps it maintain a stable price of $1.00 per share.


HOW TO PURCHASE SHARES


Types of Accounts


If you are making an initial investment in the Fund, you will need to open an account. You may establish the following types of accounts:


·

Individual or Joint Ownership.  One person owns an individual account while two or more people own a joint account. We will treat each individual owner of a joint account as authorized to give instructions on purchases, sales and exchanges of shares without notice to the other owners. However, we will require each owner's signature guarantee for any transaction requiring a signature guarantee.


·

Gift or Transfer to Minors.  A Custodian maintains a Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) account for the benefit of a minor. To open an UGMA or UTMA account, you must include the minor's social security number on the application.


·

Trust.  A trust can open an account. You must include the name of each trustee, the name of the trust and the date of the trust agreement on the application.


·

Corporations, Partnerships and Other Legal Entities.  Corporations, partnerships and other legal entities may also open an account. A general partner of the partnership or an authorized officer of the corporation or other legal entity must sign the application and resolution form.


·

Retirement.  If you are eligible, you may set up your account under a tax-sheltered retirement plan, such as an Individual Retirement Account (IRA) or Roth IRA, Rollover IRA, SEP-IRA, SIMPLE IRA, Keogh Account, or other retirement plan. Your financial consultant can help you determine if you are eligible.


Shareholder Services


The Board has adopted a Shareholder Services Plan (‘Services Plan, which provides that AdvisorOne Funds (the “Trust”), on behalf of the Fund, may obtain the services of certain financial institutions, broker-dealers, and other financial intermediaries to act as shareholder servicing agents for their customers.  For these services, the Trust may pay the shareholder servicing agent a fee, up to the amount indicated below, based upon the average daily net assets of the shares owned by investors for which the shareholder servicing agent maintains a servicing relationship. Payments under the Shareholder Services Plan may vary and are determined by the Trust in its sole discretion, in amounts up to the amount indicated below.


Fees

Financial Class Shares

Shareholder Servicing Fees

0.05%


Because shareholder service fees are paid out of the Fund's assets on an ongoing basis, such fees may, over time, increase the cost of investing in the Fund.  Pursuant to the 1940 Act, you will have exclusive voting rights with respect to the Plan for Financial Class Shares.

ADDITIONAL SHARE CLASSES

In addition to the Financial Class Shares, the Fund also offers Institutional Class Shares, Investor Class Shares and Premium Class Shares by separate prospectuses. For further information about these other classes of shares, please call (866) 811-0225.


Purchasing Shares


Good Order:  When making a purchase request, make sure your request is in good order.  "Good order" means your purchase request includes:


·

the name of the Fund

·

the dollar amount of shares to be purchased

·

a completed purchase application or investment stub

·

check payable to the applicable Fund


The minimum initial investment for Financial Class Shares is $20,000,000. AdvisorOne Funds or CLS may waive or lower the minimum in certain cases. You must complete and sign an application for each account you open.


The Fund and the Distributor each reserves the right to reject any purchase for any reason and to cancel any purchase due to non-payment. You must make all purchases in United States dollars and draw all checks on United States banks. If we cancel your purchase due to non-payment, you will be responsible for any loss the Fund incurs. We will not accept cash or third-party checks for the purchase of shares.


Method of Purchase


Purchase Procedures

 

 

Through a Financial Professional

Contact your financial consultant. Your financial consultant can tell you the time by which you must submit your order to begin receiving dividends that day. Your Financial Consultant must transmit the order to the Fund before 5:00 p.m. Eastern time).

 

 

Through Brokers

The Distributor authorizes certain securities dealers, banks or other financial service firms (collectively, "brokers") to purchase your shares. To receive that day's share price:

·

you must place your order with the broker before 5:00 p.m. Eastern time.

 

 

By Mail

To purchase Shares, send your completed application to:

AdvisorOne Funds

c/o Gemini Fund Services, LLC

4020 South 147th Street, Suite 2

  

Omaha, NE 68137                 

 Include with your application your check, payable to "AdvisorOne Funds"

 

 

By Wire

If you wish to wire money to make a subsequent investment in the Fund, please call 1-866-811-0225 for wiring instructions and to notify the Fund that a wire is coming.  Any commercial bank can transfer same-day funds by wire.  The Fund will normally accept wired funds for investment on the day received if they are received by the Fund's designated bank before the close of regular trading on the NYSE. Your bank may charge you for wiring same-day funds.

 

 

By Telephone     

You may make subsequent purchases in your account by telephoning 1-866-811-0225 between 8:30 a.m. and 5:00 p.m. Eastern time on any day the Fund is open. We will electronically transfer money from the bank account you designate on your Application to our account with AdvisorOne Funds. This investment option is only available if you have not declined or cancelled your telephone investment privilege.

 

 

IMPORTANT NOTES

Once you have requested a telephone transaction, and a confirmation number has been assigned, the transaction cannot be revoked. We reserve the right to refuse any purchase request.




HOW TO REDEEM SHARES


You have the right to sell ("redeem") all or any part of your shares subject to certain restrictions. Selling your shares in the Fund is referred to as a "redemption" because the Fund buys back its shares. We will redeem your shares at the NAV next computed following receipt of your redemption request in good order. See Redemption Procedures Request in Good Order.


We will mail your redemption proceeds to your address of record or transmit them electronically to your designated bank account. Except under certain extraordinary conditions, we will send your redemption to you within seven days after we receive your redemption request. If you purchase shares by check and, soon after, request a redemption, your redemption request will not be processed until the check used for your purchase has cleared (usually within 10 days).


The Fund cannot accept requests that specify a certain date for redemption or which specify any other special conditions.  Redemption proceeds must be payable to the registered shareholder(s) of the account or to a financial intermediary for the benefit of the registered shareholder(s) of the account.  Please call 1-866-811-0225 for further information.  We will not process your redemption request if it is not in good order.  We will notify you if your redemption request is not in good order.


If, as a result of your redemption, your account value drops below $2,500, we may redeem the remaining shares in your account.  We will notify you in writing of our intent to redeem your shares.  We will allow at least sixty days thereafter for you to make an additional investment to bring your account value up to at least the minimum amount before we will process the redemption.


Medallion Signature Guarantees


Your redemption request must be accompanied by a "medallion signature guarantee" under certain circumstances, such as sending the redemption proceeds to an address other than the address of record.


Third Party Transactions


If you buy and redeem shares of the Fund through a member of the Financial Industry Regulatory Authority, Inc. that member may charge a fee for that service.  The Fund has authorized one or more brokers to accept on its behalf purchase and redemption orders. Such brokers are authorized to designate intermediaries to accept orders on the Fund's behalf. The Fund will be deemed to have received the order when an authorized broker or a broker authorized designee accepts your order. Your order will be priced at the Fund's net asset value next computed after it is received by the authorized broker or broker authorized designee.


CLS may pay certain financial institutions (which may include banks, brokers, securities dealers and other industry professionals) a fee for providing distribution related services and/or for performing certain administrative and servicing functions for Fund shareholders and/or making the funds available for purchase on their platforms.  These payments are made from CLS and are not charged to the Fund, unless part of an approved Plan.


Redemptions in Kind


The Fund reserves the right to honor requests for redemption or repurchase orders by making payment in whole or in part in readily marketable securities ("redemption in kind") if the amount of such a request is large enough to affect operations (for example, if the request is greater than $250,000 or 1% of the Fund's assets). The securities will be chosen by the Fund and valued at the Fund's net asset value. A shareholder may incur transaction expenses in converting these securities to cash.


Method of

Redemption


Redemption Procedures

 

 

By Telephone     



You may authorize redemption of some or all shares in your account with the Fund by telephoning the Fund at 1-866-811-0225 between 8:30 a.m. and 5:00 p.m. Eastern time on any day the Fund is open.


You will NOT be eligible to use the telephone redemption service if you:

·

have declined or canceled your telephone investment privilege;

·

wish to redeem shares valued at $50,000 or greater or if you ask us to send the redemption proceeds to an address other than the address of record for the account;

·

must provide supporting legal documents such as a signature guarantee for redemption

·

have an account set up as a corporation, trust or partnership; or

·

wish to redeem from a retirement account.

 

 

By Mail         

If you are redeeming Shares, you may send your redemption request to:

AdvisorOne Funds

c/o Gemini Fund Services, LLC

4020 South 147th Street, Suite 2

Omaha, NE 68137

 

You must include the following information in your written request:

·

a letter of instruction stating the name of the Fund, the number of shares you are redeeming, the names in which the account is registered and your account number;

·

other supporting legal documents, if necessary, for redemption requests by corporations, trusts and partnerships;

·

a signature guarantee, if necessary.

 

 

By Wire          

You may request your redemption proceeds be wired directly to the bank account designated on your application. The Fund's transfer agent will charge you a $10.00 fee for each wire redemption. The transfer agent will deduct the fee directly from your account. Your bank may also impose a fee for the incoming wire.

 

 

Request in "Good Order"

For our mutual protection, all redemption requests must include:

·

your account number;

·

the amount of the transaction;

·

for mail request, signatures of all owners EXACTLY as registered on the account and signature guarantees, if required (signature guarantees can be obtained at most banks, credit unions, and licensed brokers); and

·

any supporting legal documentation that may be required.


Your redemption request will be processed at the next determined share price after we have received all required information.

 

 

IMPORTANT NOTE

Once we have processed your redemption request, and a confirmation number has been given, the transaction cannot be revoked.





Options For Redemption Proceeds


You may receive your redemption proceeds by check or by wire.


Check Redemptions:  Normally we will mail your check within two business days of a redemption.


Wire Redemptions:  Before you can receive redemption proceeds by wire, you must establish this option by completing a special form or the appropriate section of your account application.


You may request that your redemption proceeds be wired directly to your bank account.  AdvisorOne Funds' transfer agent imposes a $10.00 fee for each wire redemption and deducts the fee directly from your account.  Your bank may also impose a fee for the incoming wire.  The redemption proceeds must be paid to the same bank and account as designated on the application or in written instructions in proper form subsequently received by AdvisorOne Funds.


Telephone Redemptions and Exchanges  


We will automatically establish the telephone redemption option for your account, unless you instruct us otherwise in writing. Telephone redemptions are easy and convenient, but this account option involves a risk of loss from unauthorized or fraudulent transactions. We will take reasonable precautions to protect your account from fraud. You should do the same by keeping your account information private and by reviewing immediately any account statements and confirmations that you receive. Please contact us immediately about any transaction you believe to be unauthorized.


AdvisorOne Funds reserves the right to refuse a telephone redemption or exchange if the caller cannot provide:

 

·

the account number

·

the name and address exactly as registered on the account

·

the primary social security or employer identification number as registered on the account


We may also require a password from the caller.


AdvisorOne Funds will not be responsible for any account losses due to telephone fraud, so long as we have taken reasonable steps to verify the caller's identity. If you wish to cancel the telephone redemption feature for your account, please notify us in writing.


HOW TO EXCHANGE SHARES


The exchange privilege is a convenient way to buy shares in another fund in order to respond to changes in your investment goals or in market conditions. You may exchange your Financial  Class Shares for Class N shares of any fund that is a series of AdvisorOne Funds without paying any sales charge.


If you establish a new account by exchange, the exchanged shares must have a minimum value of $2,500.  


You may exchange shares either by telephone, if you have not canceled your telephone privilege, or in writing. Written requests for exchange must provide the following:


· current Funds name;

· account names and numbers;

· the amount you wish to exchange;

· specify the shareholder privileges you wish to retain (e.g., Telephone Privileges); and

· signatures of all registered owners.


To exchange shares by telephone, you should call 1-866-811-0225 between 8:30 a.m. and 4:00 p.m. Eastern time on any day the Fund is open. We will process telephone requests made after 4:00 p.m. Eastern time at the close of business on the next business day. You should notify the Fund in writing of all shareholder service privileges you wish to continue in any new account opened by a telephone exchange request. Please note that we will only accept exchanges if your ownership registrations in both accounts are identical.


We will value your exchanged shares at their respective net asset value next determined after the receipt of the exchange request. We will not impose an initial sales charge, redemption fee or penalty on exchanges. An exchange transaction is a sale and a purchase of shares for federal income tax purposes and may result in a capital gain or loss.

 

Systematic Exchange Program


The Systematic Exchange Program allows you to make regular, systematic exchanges from one AdvisorOne Fund account into an AdvisorOne Fund Milestone Treasury Obligations Fund Institutional Class Shares account. By setting up the program, you authorize the Fund and its agents to redeem a set dollar amount or number of shares from the first account and purchase Institutional Class Shares of the Milestone Treasury Obligations Fund.


To participate in the Systematic Exchange Program, you must have an initial account balance of $10,000 in the first account. Exchanges may be made on any day or days of your choice. If the amount remaining in the first account is less than the exchange amount you requested, then the remaining amount will be exchanged. At such time as the first account has a zero balance, your participation in the program will be terminated. You may also terminate the program by calling or writing the Fund. Once participation in the program has been terminated for any reason, to reinstate the program you must do so in writing; simply investing additional funds will not reinstate the program.


Exchanging Shares Purchased Through Your Financial Advisor. If fund shares were purchased through your Financial Advisor, initiate your exchange order by contacting your Financial Advisor.


Transferring Registration


You can transfer the registration of your shares in the Fund to another owner by completing a transfer form and sending it to the AdvisorOne Funds, 4020 South 147th Street, Suite 2, Omaha, Nebraska 68137.


TAX STATUS, DIVIDENDS AND DISTRIBUTIONS


DIVIDENDS

Dividends are declared daily and paid monthly, following the close of the last Fund Business Day of the month. Shares purchased by wire before 5:00 p.m. (Eastern Time) begin earning dividends that day. Dividends are automatically reinvested on payment dates in additional shares of the Fund unless cash payments are requested by contacting the Trust. The election to reinvest dividends and distributions or receive them in cash may be changed at any time upon written notice to the Transfer Agent. All dividends and other distributions are treated in the same manner for federal income tax purposes whether received in cash or reinvested in shares of the Fund. If no election is made, all dividends and distributions will be reinvested.


CAPITAL GAINS DISTRIBUTIONS

Net realized short-term capital gains, if any, will be distributed whenever the Trustees determine that such distributions would be in the best interest of the shareholders, which will be at least once per year. The Trust does not anticipate that the Fund will realize any long-term capital gains, but should they occur, they also will be distributed at least once every 12 months.

 

TAX MATTERS

Dividends paid by the Fund out of its net investment income (including realized net short-term capital gains) are taxable to the shareholders of the Fund as ordinary income. Distributions of net long-term capital gains, if any, realized by the Fund are taxable to the shareholders as long-term capital gains, regardless of the length of time the shareholder may have held shares in the Fund at the time of distribution. Distributions are subject to federal income tax when they are paid, whether received in cash or reinvested in shares of the Fund. Distributions declared in December and paid in January, however, are taxable as if paid on December 31st.

The Fund is required by federal law to withhold 28%, or such other amounts as required by federal law, of reportable payments (which may include dividends and capital gain distributions) paid to a non-corporate shareholder unless that shareholder certifies in writing that the social security or other taxpayer identification number provided is correct and that the shareholder is not subject to backup withholding for prior underreporting to the Internal Revenue Service.

Some states and localities do not tax dividends paid on shares of the Fund that are attributable to interest from U.S. Treasury obligations (but not necessarily interest earned on repurchase agreements).

Reports containing appropriate information with respect to the federal income tax status of dividends, distributions and redemptions, including the proportions attributable to capital gains and interest on U.S. Treasury obligations, paid during the year by the Fund will be mailed to shareholders shortly after the close of each calendar year.

The foregoing is only a summary of some of the tax considerations generally affecting the Fund and its shareholders. The Statement of Additional Information contains a more detailed discussion. Because other federal, state or local tax considerations may apply, investors are urged to consult their tax advisors.


FREQUENT PURCHASES AND REDEMPTIONS OF SHARES


To allow the adviser to manage the Fund most effectively, investors are encouraged to execute as many trades as possible before 2:30 p.m. To protect the Fund's performance and shareholders, the adviser discourages frequent trading in response to short-term market fluctuations. The Trust and the Transfer Agent each reserves the right to reject any purchase order for any reason. Because many investors acquire shares of money market funds as short-term investments, however, the Board has not adopted a policy with respect to frequent purchases and redemptions of the Fund's shares.


HOUSEHOLDING

To reduce expenses, we mail only one copy of the prospectus and each annual and semi-annual report to those addresses share by two or more accounts. If you wish to receive individual copies of these documents, please call the Fund at (866) 811-0225 between the hours of 8:30 a.m. and 7:00 p.m. Eastern Time on days the Fund is open for business or contact your financial institution. We will begin sending you individual copies thirty days after receiving your request.



FINANCIAL HIGHLIGHTS


The financial highlights table is intended to help you understand the Fund's financial performance over the past five years. The total returns in the tables represent the rate that an investor would have earned (or lost) on an investment in Financial Class Shares of the Fund (assuming reinvestment of all dividends and distributions). For the fiscal years ended November 30, 2011, November 30, 2010, November 30, 2009, November 30, 2008, and November 30, 2007 , the information has been audited by Tait, Weller & Baker LLP, independent registered public accounting firm, whose report, along with the predecessor fund's financial statements, are included in the predecessor fund's Annual Report, which is available upon request.  


 

 

 

 

 

Financial Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended November 30,

 

 

 

 

 

 

2011

 

2010

 

2009

 

2008

 

2007

 

Net asset value, beginning of year

 

 $           1.00

 

 $           1.00

 

 $            1.00

 

 $           1.00

 

 $           1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Activity from investment operations:

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

0.000

(1,2)

0.001

 

0.002

 

0.020

 

0.049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less distributions from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

(0.000)

(2)

(0.001)

 

(0.002)

 

(0.020)

 

(0.049)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net asset value, end of year

 

$            1.00

 

$            1.00

 

$            1.00

 

 $           1.00

 

 $           1.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total return

 

 

 

0.02%

 

0.05%

 

0.21%

 

2.04%

 

5.03%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets, at end of year (000s)

 

 $    187,070

 

 $    520,606

 

 $    604,040

 

 $   763,007

 

 $     538,914

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratio of gross expenses to average

 

 

 

 

 

 

 

 

 

 

 

 

net assets (3)

 

 

 

0.24%

 

0.20%

 

0.20%

 

0.19%

 

0.18%

 

Ratio of net expenses to average

 

 

 

 

 

 

 

 

 

 

 

 

net assets (4)

 

 

 

0.12%

 

0.15%

 

0.15%

 

0.15%

 

0.15%

 

Ratio of net investment income

 

 

 

 

 

 

 

 

 

 

 

 

to average net assets

 

 

 

0.02%

 

0.05%

 

0.22%

 

2.01%

 

4.91%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Per share amounts calculated using the average shares method, which more appropriately presents the per share data for the period.

(2)

Amount represents less than $0.01 per share.

 

 

 

 

 

 

 

 

 

(3)

Represents the ratio of expenses to average net assets absent fee waivers and/or expense reimbursements by the Advisor.

 

(4)

The adviser has agreed to waive additional fees in order to maintain a positive return. The additional waiver, 0.03%

 

 

for the period ended November 30, 2011, decreased the net expense ratio.

 

 

 

 

 





[institutionalshares006.jpg]                                                                                                             Rev. June 2011

FACTS

WHAT DOES ADVISORONE FUNDS ("ADVISORONE") DO WITH YOUR PERSONAL INFORMATION?

Why?

Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.

What?

The types of personal information we collect and share depend on the product or service you have with us. This information can include:

·

Social Security number

·

Employment information

·

Account balances

·

Account transactions

·

Income

·

Investment experience

When you are no longer our customer, we continue to share your information as described in this notice.

How?

All financial companies need to share a customer’s personal information to run their everyday business - to process transactions, maintain customer accounts, and report to credit bureaus. In the section below, we list the reasons financial companies can share their customer's personal information; the reasons AdvisorOne chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information

Does AdvisorOne share?

Can you limit this sharing?

For our everyday business purposes --
such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus

Yes

No

For our marketing purposes --
to offer our products and services to you

Yes

No

For joint marketing with other financial companies

Yes

No

For our affiliates’ everyday business purposes --
information about your transactions and experiences

Yes

No

For our affiliates’ everyday business purposes --
information about your creditworthiness

No

We don't share

For nonaffiliates to market to you

No

We don't share

Questions?

Call (866) 811-0225 or go to www.advisoronefunds.com

        

Page 2

 

 

 

 

 

 

 

 

 

Who we are

Who is providing this notice?

AdvisorOne Funds

What we do

How does AdvisorOne protect my personal information?

To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.

How does AdvisorOne collect my personal information?

We collect your personal information, for example, when you

·

open an account

·

give us your income information

·

provide employment information

·

provide account information

·

give us your contact information


We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.

Why can’t I limit all sharing?

Federal law gives you the right to limit only

·

sharing for affiliates’ everyday business purposes—information about your creditworthiness

·

affiliates from using your information to market to you

·

sharing for nonaffiliates to market to you

State laws and individual companies may give you additional rights to limit sharing.

Definitions

Affiliates

Companies related by common ownership or control. They can be financial and nonfinancial companies.

The following companies may be considered affiliates of AdvisorOne:

·

CLS Investments, LLC

·

NorthStar Financial Services Group, LLC

·

Gemcom, LLC

·

Gemini Fund Services, LLC

·

Northern Lights Compliance Services, LLC

·

Northern Lights Distributors, LLC

·

Orion Advisor Services, LLC

·

Constellation Trust Company

Nonaffiliates

Companies not related by common ownership or control. They can be financial and nonfinancial companies.

·

AdvisorOne does not share with nonaffiliates so they can market to you.

Joint marketing

A formal agreement between nonaffiliated financial companies that together market financial products and services to you.

·

Our joint marketing partners include other financial service companies.

 








WHERE TO GO FOR MORE INFORMATION


You will find more information about the Fund in the following documents:

Annual and Semi-annual Reports: Our annual and semi-annual reports list the holdings in the Fund, describe the Fund's performance, include financial statements for the Fund, and discuss the market conditions and strategies that significantly affected the Fund's performance during the last fiscal year.

Statement of Additional Information ("SAI"): The Statement of Additional Information contains additional and more detailed information about the Fund.


The SAI is incorporated by reference into (and is thus a part of) this Prospectus.


There are three ways to get a copy of these documents:

1. Call or write for one, and a copy will be sent without charge.


      AdvisorOne Funds

      c/o Gemini Fund Services, LLC

      4020 South 147th Street, Suite 2

      Omaha, NE 68137

      1-866-811-0225


The Prospectus, Annual Report, Semi-Annual Report and holdings information are available at www.AdvisorOneFunds.com.


2. Write to the Public Reference Room of the Securities and Exchange Commission ("SEC") and ask them to mail you a copy. Or, you may e-mail your request to publicinfo@sec.gov. The SEC charges a fee for this service.


You can also go to the Public Reference Room and copy the documents while you are there. The SEC is located at 100 F Street, NE, Washington, DC 20549-0102.


You may get information about the Public Reference Room and its business hours by writing or calling the number below.


      Public Reference Room - U.S. Securities and Exchange Commission

      100 F Street, N.W.

      Washington, D.C. 20549-0102

      1-202-551-8090


3. Go to the SEC's website (www.sec.gov) and download a free text-only version.

 

If you are a current Fund shareholder and would like information about your account, account transactions, or account statements, please call us at 1-866-811-0225.


If you purchased your shares through a financial institution, you may contact that institution for more information.


The AdvisorOne Funds' Investment Company Act File Number is 811-08037.


1-866-811-0225

www.AdvisorOneFunds.com




www.advisoronefunds.com
4020 S. 147th Street • Omaha, NE 68137
(866) 811-0225

Distributed by Northern Lights Distributors, LLC
Member FINRA

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







ADVISORONE FUNDS


Milestone Treasury Obligations Fund

a series of AdvisorOne Funds


Premium

Class

Shares

 

Financial

Class

Shares

 

Institutional

Class

Shares

MTIXX

Investor

Class

Shares

MTOXX



STATEMENT OF ADDITIONAL INFORMATION

January 20, 2012

As amended March 19, 2012


This Statement of Additional Information is not a Prospectus, but is an incorporated part of the Prospectus and should be read in conjunction with the Milestone Treasury Obligations Fund Prospectus of the AdvisorOne Funds (the "Trust") dated January 20, 2012 , as amended March 19, 2012 .  The Fund's Annual Report, in the form of the Annual Report of the Fund's predecessor, The Milestone Treasury Obligations Portfolio, a series of The Milestone Funds, for the period ended November 30 , 2011 is incorporated herein by reference.


To obtain a free copy of the Prospectus or an annual or semi-annual report, please call the Trust at 1-866-811-0225.

 


TABLE OF CONTENTS


General Information and History

1

Investment Restrictions

2

Description of Securities, Other Investment Policies

and Risk Considerations

4

Disclosure of Portfolio Holdings

25

Management of the Trust

26

Principal Holders of Securities

30

Investment Management and Other Services

31

Affiliations and Control of the Adviser and Other Service Providers

34

Administrator

34

Custodian

36

Transfer Agent Services

36

Distribution of Shares

37

Shareholder Services Agreement

38

Compliance Officer

38

Code of Ethics

39

Proxy Voting Policies and Procedures

39

Portfolio Managers

40

Brokerage Allocation and Other Practices

41

Redemption of Securities Being Offered

43

Other Shareholder Services

44

Determination of Net Asset Value

45

Advertising

45

Anti-Money Laundering Program

46

Taxes

46

Organization of the Trust

47

Independent Registered Public Accounting Firm

48

Legal Matters

48

Financial Statements

48

Appendix A

49

Appendix B

51


For more information on the Fund, including charges and expenses, call the Trust at the number indicated above for a free prospectus. Read it carefully before you invest or send money.


GENERAL INFORMATION AND HISTORY


The Trust is an open-end management investment company, commonly known as a "mutual fund," and sells and redeems shares every day that it is open for business. The Trust was organized as a Delaware business trust by a Declaration of Trust filed December 20, 1996, with the Secretary of State of Delaware, and is registered with the Securities and Exchange Commission (the "SEC") under the Investment Company Act of 1940 (the "1940 Act").  The Fund represents a separate series of beneficial interest in the Trust having different investment objectives, investment programs, policies and restrictions. The Fund is a diversified series of the Trust.


This Statement of Additional Information deals solely with the Milestone Treasury Obligations Fund referred to herein as a "Fund."  The Fund offers the following classes of shares:


CLASS


Premium

Financial

Institutional

Investor


Each class of shares of the Fund represents an interest in the same assets of the Fund, has the same rights and are identical in all material respects except that (i) each class of shares may bear different distribution and shareholder service fees; (ii) certain other class-specific expenses will be borne solely by the class to which such expenses are attributable and (iii) each class has exclusive voting rights with respect to matters relating to its own distribution arrangements.  The Board of Trustees may classify and reclassify the shares of the Fund into additional classes of shares at a future date.


The Fund is managed by CLS Investments, LLC, a Nebraska limited liability company (the "Adviser"). The Adviser directs the day-to-day operations and the investment of assets of the Funds.  


Gemini Fund Services, LLC, ("the Administrator") is the administrator , accounting agent, and transfer agent for the Fund.  BNY Mellon is the custodian for the Fund.


INVESTMENT RESTRICTIONS


The following policies and limitations supplement those set forth in the Prospectus. Unless otherwise noted, whenever a policy or limitation states a maximum percentage of the Fund's assets that may be invested in any security or other asset, or sets forth a policy regarding quality standards, such standard or percentage limitations will be determined immediately after and as a result of the Fund's acquisition of such security or other asset. Accordingly, any subsequent change in values, net assets or other circumstances will not be considered when determining whether the investment complies with the Fund's investment policies and limitations.


The Fund's fundamental investment policies and limitations may be changed only with the consent of a "majority of the outstanding voting securities" of the Fund. As used in this Statement of Additional Information, the term "majority of the outstanding voting securities" means the lesser of: (1) 67% of the shares of the Fund present at a meeting where the holders of more than 50% of the outstanding shares of the Fund are present in person or by proxy, or (2) more than 50% of the outstanding shares of the Fund. Shares of the Fund will be voted separately on matters affecting only that Fund, including approval of changes in the fundamental investment policies of that Fund. Except for the fundamental investment limitations listed below, the investment policies and limitations described in this Statement of Additional Information are not fundamental and may be changed without shareholder approval.


THE FOLLOWING ARE THE FUNDAMENTAL INVESTMENT LIMITATIONS OF THE FUND.


The Fund will not:


(1)

Invest in structured notes or instruments commonly known as derivatives.


(2)

Invest in variable, adjustable or floating rate instruments of any kind.


(3)

Enter into reverse repurchase agreements.


(4)

Invest in securities issued by agencies or instrumentalities of the United States Government, such as the Federal National Mortgage Association ("FNMA"), Government National Mortgage Association ("GNMA"), Federal Home Loan Mortgage Corp. ("Freddie Mac"), or the Small Business Administration ("SBA").


(5)

Invest in zero coupon bonds.


(6)

With respect to 100% of its assets, purchase a security other than a U.S. Treasury obligation if, as a result, more than 5% of the Portfolio's total assets would be invested in the securities of a single issuer.


(7)

Purchase securities if, immediately after the purchase, 25% or more of the value of the Fund's total assets would be invested in the securities of issuers having their principal business activities in the same industry; except that there is no limit on investments in U.S. Treasury obligations and repurchase agreements fully collateralized by U.S. Treasury obligations.


(8)

Purchase restricted securities, or underwrite securities of other issuers, except to the extent that the Fund may be considered to be acting as an underwriter in connection with the disposition of portfolio securities.


(9)

Purchase or sell real estate or any other interest therein, or real estate limited partnerships or invest in securities issued by companies that invest in real estate or interests therein.


(10)

Purchase or sell physical commodities or contracts relating to physical commodities, provided that currencies and currency-related contracts will not be deemed to be physical commodities.


(11)

Borrow money, except for temporary or emergency purposes (not for leveraging or investment), including the meeting of redemption requests, provided that borrowings do not exceed 33 1/3% of the value of the Fund's total assets.


(12)

Issue senior securities except as appropriate to evidence indebtedness that the Fund is permitted to incur, and provided that the Fund may issue shares of additional series or classes that the Trustees may establish.


(13)

Make loans (except through the use of repurchase agreements, and through the purchase of debt securities that are otherwise permitted investments).


(14)

Purchase securities on margin, or make short sales of securities, except for the use of short-term credit necessary for the clearance of purchases and sales of portfolio securities.


(15)

Write options or acquire instruments with put or demand features, except that the Fund may enter into repurchase agreements terminable upon demand.


(16)

Invest in oil, gas or other mineral exploration or development programs.


THE FOLLOWING ARE ADDITIONAL INVESTMENT LIMITATIONS OF THE FUND. THE FOLLOWING RESTRICTIONS ARE DESIGNATED AS NON-FUNDAMENTAL AND MAY BE CHANGED BY THE BOARD OF TRUSTEES OF THE TRUST WITHOUT THE APPROVAL OF SHAREHOLDERS.


Borrowing. The Fund may borrow money from time to time so as to not have to sell portfolio securities to meet redemptions at a time when market conditions would not favor such a sale. The Fund may not purchase securities for investment when borrowings equaling 5% or more of the Fund's total assets are outstanding. Any borrowing by the Fund is subject to the limitations stated under "Investment Limitations" above.

Repurchase Agreements. The Fund may purchase repurchase agreements fully collateralized by U.S. Treasury obligations. In a repurchase agreement, the Fund purchases a security and simultaneously commits to resell that security to the seller at an agreed-upon price on an agreed-upon future date, normally one-to-seven days later. The repurchase price reflects a market rate of interest unrelated to the coupon rate or maturity of the purchased security. The obligation of the seller to pay the repurchase price is in effect secured by the value of the underlying security (as determined daily by the Adviser). This value must be equal to, or greater than, the repurchase price plus the transaction costs (including loss of interest) that the Fund could expect to incur upon liquidation of the collateral if the counterparty defaults. If a counterparty defaults on its repurchase obligation, the Fund might suffer a loss to the extent that the proceeds from the sale of the collateral were less than the repurchase price. In the event of a counterparty's bankruptcy, the Fund might be delayed in, or prevented from, selling the collateral for the Fund's benefit.

When-Issued and Delayed Delivery Transactions. In order to assure itself of being able to obtain securities at prices which the Adviser believes might not be available at a future time, the Fund may purchase securities on a when-issued or delayed delivery basis (forward commitments). When these transactions are negotiated, the price (generally expressed in terms of yield) and the interest rate payable on the securities are fixed on the transaction date. Delivery and payment may take place a month or more after the date of the transaction. When the Fund makes the forward commitment, it will record the transactions as a purchase and thereafter reflect the value each day of such securities in determining its net asset value. During the period between a commitment and settlement, no payment is made for the securities purchased and no interest on the security accrues to the purchaser. At the time the Fund makes a commitment to purchase securities in this manner, the Fund immediately assumes the risk of ownership, including price fluctuation. Accordingly, the value of the securities on the delivery date may be more or less than the purchase price. Although the Fund will only enter into a forward commitment if it intends to actually acquire the securities, if the Fund later chooses to dispose of the right to acquire a when-issued security prior to its acquisition, it could, as with the disposition of any other portfolio obligation, incur a gain or loss due to market fluctuation. When the Fund agrees to purchase a security on a when-issued or delayed delivery basis, the Trust's custodian will set aside and maintain a segregated account of sufficient liquid assets (such as cash or U.S. Treasury obligations) which will be available to make payment for the securities purchased. Failure by the other party to deliver a security purchased by the Fund may result in a loss or a missed opportunity to make an alternative investment. Although there is no limit on the amount of these commitments that the Fund may make, under normal circumstances it will not commit more than 30% of its total assets to such purchases.

Illiquid Securities. The Fund may invest up to 5% of its net assets in illiquid securities. The term "illiquid securities" for this purpose means repurchase agreements having a maturity of more than seven days and not entitling the holder to payment of principal within seven days. In addition, the Fund will not invest in repurchase agreements having a maturity in excess of one year. Certain repurchase agreements that provide for settlement in more than seven days can be liquidated before the nominal fixed term on seven days or less notice. Such repurchase agreements will be regarded as liquid instruments. The Board has ultimate responsibility for determining whether specific securities are liquid or illiquid. The Adviser monitors the liquidity of securities held by the Fund and reports periodically to the Board.

Other Investment Companies. In the future, the Fund may attempt to achieve its investment objective by holding, as its only investment securities, the securities of another investment company having identical investment objectives and policies as the Fund in accordance with the provisions of the 1940 Act or any orders, rules or regulations thereunder adopted by the SEC.

Cash Position. Although the Fund intends to be invested fully in U.S. Treasury obligations or repurchase agreements, it may hold a de minimus amount of cash for a short period prior to investment or payment of the proceeds of redemption. The amount of this cash should not exceed 5% of the Fund's assets, and in most cases will be significantly less.


DESCRIPTION OF SECURITIES, OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS


The following pages contain more detailed information about the types of instruments in which the Fund may invest, strategies the Adviser may employ in pursuit of the Fund's investment objective and a summary of related risks. The Fund will make only those investments described below that are in accordance with its investment objectives and policies.  The Adviser may not buy all of these instruments or use all of these techniques unless it believes that doing so will help the Fund achieve its investment objectives.


MASTER/FEEDER STRUCTURE.  The Fund reserves the right to convert to a "master/feeder" structure at a future date. If the Board approved the use of a master-feeder structure for the Fund, the Fund (the "feeder" fund) would invest all of its investable assets in an open-end management investment company (the "master" fund) with substantially the same investment objectives, policies and limitations as the Fund. For this purpose, "all of the Fund's investable assets" means that the only investment securities that would be held by the Fund would be the Fund's interest in the master fund. Under such a structure, one or more "feeder" funds, such as the Fund, invest all of their assets in a "master" fund, which, in turn, invests directly in a portfolio of securities. If required by applicable law, the Fund will seek shareholder approval before converting to a master/feeder structure. If the requisite regulatory authorities determine that such approval is not required, shareholders will be deemed, by purchasing shares, to have consented to such a conversion and no further shareholder approval will be sought. Such a conversion is expressly permitted under the investment objective and fundamental policies of the Fund.


REPURCHASE AGREEMENTS. The Fund may invest in repurchase agreements. A repurchase agreement is an instrument under which the investor (such as the Fund) acquires ownership of a security (known as the "underlying security") and the seller (i.e., a bank or primary dealer) agrees, at the time of the sale, to repurchase the underlying security at a mutually agreed upon time and price, thereby determining the yield during the term of the agreement. This results in a fixed rate of return insulated from market fluctuations during such period, unless the seller defaults on its repurchase obligations.  The Fund will only enter into repurchase agreements where: (i) the underlying securities are of the type (excluding maturity limitations) which the Fund's investment guidelines would allow it to purchase directly, (ii) the market value of the underlying security, including interest accrued, will be at all times at least equal to the value of the repurchase agreement, and (iii) payment for the underlying security is made only upon physical delivery or evidence of book-entry transfer to the account of the Fund's custodian. Repurchase agreements usually are for short periods, often under one week, and will not be entered into by a Fund for a duration of more than seven days if, as a result, more than 10% of the net asset value of the Fund would be invested in such agreements.


The Fund will assure that the amount of collateral with respect to any repurchase agreement is adequate. As with a true extension of credit, however, there is risk of delay in recovery or the possibility of inadequacy of the collateral should the seller of the repurchase agreement fail financially. In addition, the Fund could incur costs in connection with the disposition of the collateral if the seller were to default. The Fund will enter into repurchase agreements only with sellers deemed to be creditworthy by, or pursuant to guidelines established by, the Board of Trustees of the Trust and only when the economic benefit to the Fund is believed to justify the attendant risks. The Fund has adopted standards for the sellers with whom it will enter into repurchase agreements. The Board of Trustees of the Trust believes these standards are designed to reasonably assure that such sellers present no serious risk of becoming involved in bankruptcy proceedings within the time frame contemplated by the repurchase agreement. The Fund may enter into repurchase agreements only with well-established securities dealers or with member banks of the Federal Reserve System.


UNITED STATES GOVERNMENT OBLIGATIONS. These consist of various types of marketable securities issued by the United States Treasury, i.e., bills, notes and bonds. Such securities are direct obligations of the United States government and differ mainly in the length of their maturity. Treasury bills, the most frequently issued marketable government security, have a maturity of up to one year and are issued on a discount basis.


DISCLOSURE OF PORTFOLIO HOLDINGS


The Trust has adopted policies and procedures that govern the disclosure of the Fund's portfolio holdings. These policies and procedures are designed to ensure that such disclosure is in the best interests of Fund shareholders.  The disclosure policies described below are in addition to those described in the Fund's Prospectus.


No sooner than sixty days after the end of each quarter/semi-annual period, the Fund will make available a complete schedule of portfolio holdings as of the last day of the quarter/semi-annual period.  The Trust files with the SEC a Form N-CSR or a Form N-Q report for the period that includes the date as of which that list of portfolio holdings was current.  Each filing discloses the Fund's portfolio holdings as of the end of the applicable quarter.  The Trust also files with the SEC a Form N-MFP monthly discloses the Fund's portfolio holdings.  The Fund will publish its holdings on its website www.advisoronefunds.com on a monthly or more frequent basis.  


Other than to rating agencies and service providers, as described below, the Fund does not selectively disclose portfolio holdings to any person.  In each case, a determination has been made that such advance disclosure is supported by a legitimate business purpose and that the recipient is subject to a duty to keep the information confidential.  

 

·

The Adviser.  Personnel of the Adviser, including personnel responsible for managing the Fund's portfolios, may have full daily access to the Fund's portfolio holdings since that information is necessary in order for the Adviser to provide its management, administrative, and investment services to the Fund.  As required for purposes of analyzing the impact of existing and future market changes on the prices, availability, demand and liquidity of such securities, as well as for the assistance of portfolio managers in the trading of such securities, Adviser personnel may also release and discuss certain portfolio holdings with various broker-dealers and portfolio research providers.

·

Gemini Fund Services, LLC.  Gemini Fund Services, LLC is the fund accountant , t ransfer agent, and administrator for the Fund; therefore, its personnel have full daily access to the Fund's portfolio holdings since that information is necessary in order for them to provide the agreed-upon services for the Trust.

·

BNY Mellon.  BNY Mellon is the custodian for the Fund; therefore, its personnel and agents have full daily access to the Fund's portfolio holdings since that information is necessary in order for them to provide the agreed-upon services for the Trust.

·

Rating Agencies.  Morningstar, Lipper and other mutual fund rating agencies may also receive the Fund's full portfolio holdings, generally quarterly on a 60-day lag basis with the understanding that such holdings may be posted or disseminated to the public by the rating agencies at any time.   


·

Thompson Hine LLP is counsel to the Fund; therefore, its personnel have access to the Fund's portfolio holdings in connection with the review of the Fund's annual and semi-annual shareholder reports and SEC filings.


The Fund's Chief Compliance Officer, or his or her designee, may also grant exceptions to permit additional disclosure of Fund portfolio holdings information at differing times and with different lag times (the period from the date of the information to the date the information is made available) in instances where the Fund has a legitimate business purposes for doing so, it is in the best interests of shareholders, and the recipients are subject to a duty of confidentiality, including a duty not to trade on the nonpublic information and are required to execute an agreement to that effect. The Board will be informed of any such disclosures at its next regularly scheduled meeting or as soon as is reasonably practicable thereafter.  In no event shall the Fund, the Adviser, or any other party receive any direct or indirect compensation in connection with the disclosure of information about the Fund's portfolio holdings.


There is no assurance that the Trust's policies on disclosure of portfolio holdings will protect the Fund from the potential misuse of holdings information by individuals or firms in possession of that information.   


MANAGEMENT OF THE TRUST


Trustees and Officers


Because AdvisorOne Funds is a Delaware business trust, there are Trustees appointed to oversee the Trust. These Trustees are responsible for overseeing the services provided by the Adviser and the general operations of the Trust. These responsibilities include approving the arrangements with companies that provide necessary services to the Fund, ensuring the Fund's compliance with applicable securities laws and that dividends and capital gains are distributed to shareholders.  The Trustees oversee each fund in the AdvisorOne Funds.  None of the Trustees or Officers holds public directorships.  The Trustees have appointed officers to provide many of the functions necessary for day-to-day operations.



Board Leadership Structure


The Trust is led by Mr. W. Patrick Clarke, who has served as the Chairman of the Board since March 5, 2012.  Mr. Clarke is an interested person by virtue of his indirect controlling interest in CLS Investments, LLC, the investment adviser to all the funds in the Trust except the Horizon Active Asset Allocation Fund, and his indirect controlling interest in Northern Lights Distributors, LLC (the Trust's distributor).  Mr. Douglas E. McCash is an interested person by virtue of his position as CCO, and prior position as legal counsel, of CLS Investments, LLC.  The Board of Trustees is comprised of Mr. Clarke and Mr. McCash and five (5) Independent Trustees.  The Independent Trustees have selected Mr. Anthony J. Hertl as Lead Independent Trustee.  Additionally, under certain 1940 Act governance guidelines that apply to the Trust, the Independent Trustees will meet in executive session, at least quarterly.  Under the Trust's Agreement and Declaration of Trust and By-Laws, the Chairman of the Board is responsible for (a) presiding at board meetings, (b) calling special meetings on an as-needed basis, (c) execution and administration of Trust policies including (i) setting the agendas for board meetings and (ii) providing information to board members in advance of each board meeting and between board meetings.  The Chairman is currently an “interested person” of the Trust within the meaning of the 1940 Act.  The Board believes that its leadership structure, including the Interested Chair, the Lead Independent Trustee, and the percentage of the Board who are Independent Trustees is most appropriate for the Trust at this time for the following key reasons:  (i) as a founder of the Trust and its affiliates, Mr. Clarke has a personal and professional stake in the quality and continuity of services provided to the Trust and has a strong incentive to achieve superior performance results, (ii) Mr. Clarke’s past experience as President of the Trust and his additional roles with the Trust’s affiliates improve the Board’s understanding of the Trust’s operations and enhance the effectiveness of communications to shareholders and the Trustees, (iii) Mr. Clarke’s ability to work effectively with other Trustees, and (iv) the extent to which the Independent Trustees meet as needed in the absence of management and Interested Trustees. Generally, the Trust believes it best to have a Chairman of the Board, who together with the President (principal executive officer), are seen by our shareholders, business partners and other stakeholders as providing strong leadership.  The Trust believes that its Chairman, and the Independent Lead Trustee, and, as an entity, the full Board of Trustees, provide effective leadership that is in the best interests of the Trust, its Funds and each shareholder.

Board Risk Oversight

The Board of Trustees has an independent Audit Committee with a separate chairman. The Board is responsible for overseeing risk management, and the full Board regularly engages in discussions of risk management and receives compliance reports that inform its oversight of risk management from its Chief Compliance Officer at quarterly meetings and on an ad hoc basis, when and if necessary.  The Audit Committee considers financial and reporting risk within its area of responsibilities.  Generally, the Board believes that its oversight of material risks is adequately maintained through the compliance-reporting chain where the Chief Compliance Officer is the primary recipient and communicator of such risk-related information.


Trustee Qualifications


Generally, the Trust believes that each Trustee is competent to serve because of their individual overall merits including: (i) experience, (ii) qualifications, (iii) attributes and (iv) skills.  Mr. Clarke has over 20 years of business experience in the investment management and brokerage business and possesses a strong understanding of the regulatory framework under which investment companies must operate based on his years of service to this Board .  Mr. Gary W. Lanzen has over 20 years of business experience in the financial services industry, holds a Masters in Education Administration degree, is a Certified Financial Planner ("CFP") and serves as a member of other mutual fund board s outside of the Trust and possesses a strong understanding of the regulatory framework under which investment companies must operate based on his years of service to mutual fund board s .   Mr. Anthony J. Hertl has over 20 years of business experience in financial services industry and related fields including serving as chair of the finance committee for the Borough of Interlaken, New Jersey and Vice President-Finance and Administration of Marymount College, holds a holds Certified Public Accountant designation and serves as a member of 4 other mutual fund boards outside of the Trust and possesses a strong understanding of the regulatory framework under which investment companies must operate based on his years of service to this Board and other fund boards.    Mr. Larry A. Carter has over 20 years of business experience in financial management which includes areas such as accounting, internal control, financial reporting, auditing and SEC compliance, holds a B.S. in Business Administration and a Certified Public Accountant designation, has served on boards outside of the Trust and possesses a strong understanding of the regulatory framework under which investment companies must operate.  Mr. John W. Davidson has over 20 years of business experience in the financial services industry, holds a Master of Arts in Mathematics and Masters in Business Administration, is a Chartered Financial Analyst and possesses a strong understanding of the regulatory framework under which investment companies must operate. Mr. Edward D. Foy has over 20 years of business experience in the financial services industry, holds a Bachelor of Science degree and is a Registered Financial Consultant with the International Association of Registered Financial Consultants and possesses a strong understanding of the regulatory framework under which investment companies must operate. Mr. Douglas E. McCash has over 9 years of business experience in the legal and financial services industry, holds a law degree and advanced legal degree in taxation and possesses a strong understanding of the regulatory framework under which investment companies must operate based on his years of service to CLS Investments, LLC. The Trust does not believe any one factor is determinative in assessing a Trustee's qualifications, but that the collective experience of each Trustee makes them each highly qualified.


 Unless otherwise noted, the address of each Trustee and Officer is 4020 South 147th Street, Omaha, Nebraska 68137.


Independent Trustees


Name, Address and Age (Date of Birth)

Position/Term of Office*

Principal Occupation

During the Past Five Years

Number of Portfolios in Fund Complex**

 Overseen by Trustee

Other Directorships held by Trustee

During the Past Five Years