485APOS 1 leaderfunds485a.htm 485APOS

As filed with the Securities and Exchange Commission on January 10, 2020

Securities Act Registration No. 333-229484

Investment Company Act Reg. No. 811-23419

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM N-1A

 

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
  Pre-Effective Amendment No.  __ [  ]
  Post-Effective Amendment No.    6 [X ]
and/or  
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
  Amendment No. 8 [  ]

(Check appropriate box or boxes.)

 

Leader Funds Trust

(Exact Name of Registrant as Specified in Charter)

 

315 W. Mill Plain Blvd.

Suite 204

Vancouver, WA 98660

(Address of Principal Executive Offices) (Zip Code)

 

Registrant's Telephone Number, including Area Code: 503-294-1010

 

The Corporation Trust Company

Corporation Trust Center

251 Little Falls Drive

Wilmington, DE 19808

(Name and Address of Agent for Service)

 

With Copies To:

John H. Lively Richard Malinowski
Practus, LLP Gemini Fund Services, LLC
11300 Tomahawk Creek Parkway, Suite 310 80 Arkay Drive, Suite 110
Leawood, KS 66211 Hauppauge, NY 11788
   

It is proposed that this filing will become effective (check appropriate box):

( ) immediately upon filing pursuant to paragraph (b).

( ) On ______________ pursuant to paragraph (b).

( ) 60 days after filing pursuant to paragraph (a)(1).

( )  On ____________ (date) pursuant to paragraph (a)(1)

(X) 75 days after filing pursuant to paragraph (a)(2).

( )  on (date) pursuant to paragraph (a)(2) of Rule 485.

 

If appropriate, check the following box:

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

 

 

 
 

 

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF SUCH STATE.

 

 

 

 

Leader Short Duration Bond Fund

 

Institutional Shares: LCCIX
Investor Shares: LCCMX
Class A Shares: LCAMX
Class C Shares: LCMCX

 

Leader Total Return Fund

Institutional Shares: LCTIX
Investor Shares: LCTRX
Class A Shares: LCATX
Class C Shares: LCCTX

 

Leader High Quality Low Duration Bond Fund

(formerly Leader Floating Rate Fund)

Institutional Shares: LFIFX
Investor Shares: LFVFX
   

 

Leader Government Bond Fund

Institutional Shares:  
Investor Shares:  

 

PROSPECTUS

 

April __, 2020

 

Advised by:

Leader Capital Corp.

315 W. Mill Plain Blvd.

Suite 204

Vancouver, WA 98660

        
 1-800-711-9164    www.leadercapital.com 

 

This Prospectus provides important information about the Funds 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 U.S. Securities and Exchange Commission nor has the U.S. Securities and Exchange Commission passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

 

IMPORTANT NOTE: Beginning on January 1, 2021, as permitted by regulations adopted by the U.S. Securities and Exchange Commission, paper copies of the funds’ shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.

 

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the fund or your financial intermediary electronically by calling or sending an email request.

 

You may elect to receive all future reports in paper free of charge. You can inform the fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by calling or sending an email request. Your election to receive reports in paper will apply to all Funds held with the Fund complex/your financial intermediary.

 
 

table of contents

 

To be updated

 

 
 

LEADER SHORT DURATION BOND FUND SUMMARY

 

Investment Objectives: The primary investment objective of the Leader Short Duration Bond Fund (the “Fund”) is to deliver a high level of current income, with a secondary objective of capital appreciation.

 

Fees and Expenses of the Fund: The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A shares if you and your family invest, or agree to invest in the future, at least $50,000 in the Fund. More information about these sales charge discounts and other discounts is available from your financial professional and in the section How to Purchase Shares of the Fund’s Prospectus and in the section Purchase, Redemption and Pricing of Shares of the Fund’s Statement of Additional Information.

 

Shareholder Fees

(fees paid directly from your investment)

Institutional
Shares
Investor
Shares
Class A
Shares
Class C
Shares

Maximum Sales Charge (Load) Imposed on Purchases

(as a % of offering price)

None None 1.50% None
Maximum Deferred Sales Charge (Load)
(as a % of the lower of original purchase price or
redemption proceeds)(1)
None None None 1.00%
Maximum Sales Charge (Load) Imposed on
Reinvested Dividends and other Distributions
None None None None

Redemption Fee

(as a percentage of amount redeemed)

None None None None

Annual Fund Operating Expenses

(expenses that you pay each year as a
percentage of the value of your investment)(2)

       
Management Fees 0.75% 0.75% 0.75% 0.75%
Distribution and/or Service (12b-1) Fees None 0.50% 0.50% 1.00%
Other Expenses 0.55% 0.56% 0.56% 0.56%
Interest and Dividends on Securities Sold Short 0.13% 0.13% 0.13% 0.13%
Remaining Other Expenses 0.42% 0.43% 0.43% 0.43%
Acquired Fund Fees and Expenses(3) 0.02% 0.02% 0.02% 0.02%
Total Annual Fund Operating Expenses 1.32% 1.83% 1.83% 2.33%
(1)A contingent deferred sales charge of 1.00% applies on certain redemptions made within 12 months of their purchase date.
(2)The Fund is the successor to the Leader Short Duration Bond Fund (the “Predecessor Short Duration Fund”), a series of Northern Lights Fund Trust, which was reorganized into the Fund on July 15, 2019.
(3)Acquired Fund Fees and Expenses are the indirect costs of investing in other investment companies. The operating expenses in this fee table do not correlate to the expense ratio in the Fund’s financial highlights because the financial highlights include only the direct operating expenses incurred by the Fund.

 

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:

 

Class 1 Year 3 Years 5 Years 10 Years
Institutional Shares $134 $418 $723 $1,590
Investor Shares $186 $576 $990 $2,148
Class A Shares $333 $717 $1,125 $2,266
Class C Shares $336 $727 $1,245 $2,666

 

1 
 

 

Portfolio Turnover: The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance. During the most recent fiscal year, the portfolio turnover rate of the Predecessor Short Duration Fund was 496.37% of the average value of its portfolio.

 

Principal Investment Strategies: The Fund expects to achieve its objectives by investing in a portfolio of investment grade debt securities and non-investment grade (also known as “junk bonds”) debt securities, both domestic and foreign, including emerging markets. The Fund defines emerging market issuers as those found outside of North America, Europe, Japan, Australia and New Zealand. Fixed income securities in which the Fund may invest include foreign and domestic bonds, notes, corporate debt, convertible debt securities, preferred securities, US and foreign government securities, domestic municipal securities, asset-backed securities (loan and credit backed securities including collateralized loan obligations (“CLOs”)), interest-only securities, and STRIPS (Separate Trading of Registered Interest and Principal of Securities, a type of zero-coupon debt instrument). The Fund’s effective average duration of its portfolio investments will normally be three years or less. The Fund also may hold cash or cash equivalents, and it may enter into repurchase agreements. Leader Capital Corp. (the “Advisor”) utilizes a fundamental top-down analysis, meaning the Advisor analyzes the economy, interest rate cycles, the supply and demand for credit and the characteristics of individual securities in making investment selections.

 

Normally, the Fund will invest at least 80% of its net assets (including any borrowings for investment purposes) in fixed income securities. The Fund may invest up to 40% of its assets in lower-quality, high yield bonds rated B or higher by Moody’s Investors Service, Standard & Poor’s Ratings Group, Fitch Ratings, Inc. or other National Recognized Statistical Rating Organization (“NRSRO”) or, if unrated by such NRSROs, determined by the Advisor to be of comparable quality. The Fund may invest up to 20% of its assets, determined at the time of investment, in foreign fixed income securities denominated in foreign currencies. Foreign fixed income securities may be investment grade, below investment grade or unrated. The Fund may invest in U.S. Treasury Government securities with no limit. The Fund may use options and credit default swaps to manage investment risk.

 

The Fund may also sell equity stocks short up to 20% of the Fund’s assets. The Advisor will consider shorting the stock of issuers in which the Fund owns a position in the same issuer’s convertible debt securities. In pursuing its short strategy, the Advisor seeks to tactically take advantage of the price relationship between an issuer’s stock and its convertible securities.

 

The Fund may invest up to 20% of its assets in variable and floating rate securities, cash, cash equivalents and fixed income securities other than as described above. The Fund may also invest in other mutual funds that primarily invest in floating rate securities, including funds that are also advised by the Advisor. By keeping some cash or cash equivalents, the Fund may avoid realizing gains and losses from selling investments when there are shareholder redemptions. However, the Fund may have difficulty meeting its investment objectives when holding a significant cash position.

 

The Advisor will consider a floating or variable-rate security to have a maturity equal to its stated maturity (or redemption date if it has been called for redemption), except that it may consider: (1) variable-rate securities to have a maturity equal to the period remaining until the next readjustment in the interest rate, unless subject to a demand feature; (2) variable-rate securities subject to a demand feature to have a remaining maturity equal to the longer of (a) the next readjustment in the interest rate or (b) the period remaining until the principal can be recovered through demand; and (3) floating-rate securities subject to a demand feature to have a maturity equal to the period remaining until the principal can be recovered through demand.

 

The Advisor may sell a security if its value becomes unattractive, such as when its fundamentals deteriorate or when other investment opportunities exist that may have more attractive yields. The Advisor may engage in frequent buying and selling of securities to achieve the Fund’s investment objective.

 

2 
 

 

Principal Investment Risks: As with all mutual funds, there is the risk that you could lose money through your investment in the Fund.

·Affiliated Fund Risk. Investments in other investment companies, including an affiliated fund, are subject to investment advisory fees and other expenses, which will be indirectly paid by the Fund. As a result, the cost of investing in the Fund will be higher than the cost of investing directly in an affiliated fund and may be higher than other mutual funds that invest directly in stocks and bonds. The Advisor may receive management or other fees from an affiliated fund in which the Fund may invest. It is possible that a conflict of interest among the Fund and an affiliated fund could affect how the Advisor fulfills its fiduciary duties to the Fund and an affiliated fund.
·Asset-Backed Risk. The default rate on underlying asset loans may be higher than anticipated, potentially reducing payments to the Fund. Default rates are sensitive to overall economic conditions such as unemployment, wage levels and economic growth rates.
·Collateralized Loan Obligation Risk. CLOs are securities backed by an underlying portfolio of debt and loan obligations, respectively. CLOs issue classes or “tranches” that vary in risk and yield and may experience substantial losses due to actual defaults, decrease of market value due to collateral defaults and removal of subordinate tranches, market anticipation of defaults and investor aversion to CLO securities as a class. The risks of investing in CLOs depend largely on the tranche invested in and the type of the underlying debts and loans in the tranche of the CLO, respectively, in which the Fund invests. CLOs also carry risks including, but not limited to, interest rate risk and credit risk.
·Convertible Debt Securities Risk. Convertible debt securities subject the Fund to the risks associated with both fixed-income securities and equity securities. If a convertible debt security’s investment value is greater than its conversion value, its price will likely increase when interest rates fall and decrease when interest rates rise. If the conversion value exceeds the investment value, the price of the convertible debt security will tend to fluctuate directly with the price of the underlying equity security.
·Credit Default Swap Risk. CDS are typically two-party financial contracts that transfer credit exposure between the two parties. Under a typical CDS, one party (the “seller”) receives pre-determined periodic payments from the other party (the “buyer”). The seller agrees to make compensating specific payments to the buyer if a negative credit event occurs, such as the bankruptcy or default by the issuer of the underlying debt instrument. The use of CDS involves investment techniques and risks different from those associated with ordinary portfolio security transactions, such as potentially heightened counterparty, concentration and exposure risks.
·Credit Risk. The issuer of a fixed income security may not be able to make interest or principal payments when due. Generally, the lower the credit rating of a security, the greater the risk is that the issuer will default on its obligation. Credit risks associated with Auction Rate Securities (“ARS”) mirror those of other bond issues in terms of default risk associated with the issuers. Because ARS do not carry a put feature allowing the bondholder to require the purchase of the bonds by the issuer or a third party, they are very sensitive to changes in credit ratings and normally require the highest ratings (e.g., AAA/Aaa) to make them marketable.
·Currency Risk. Currency trading risks include market risk, credit risk and country risk. Market risk results from adverse changes in exchange rates in the currencies in which the Fund is long or short. Credit risk results because a currency-trade counterparty may default. Country risk arises because a government may interfere with transactions in its currency.
·Derivatives Risk. When writing put and call options, the Fund is exposed to declines in the value of the underlying asset against which the option was written. To the extent required, the Fund will cover the financial exposure created by writing put and call options either by purchasing or selling offsetting options or futures or designating liquid assets to cover such financial exposure. When purchasing options, the Fund is exposed to the potential loss of the option purchase price. Derivatives may be illiquid and the market for derivatives is largely unregulated. The use of derivatives may not always be a successful strategy and using them could lower the Fund’s return.
·Emerging Markets Risk. The Fund may invest in countries with newly organized or less developed securities markets. Generally, economic structures in these countries are less diverse and mature than those in developed countries and their political systems tend to be less stable. Emerging market economies may be based on only a few industries, therefore security issuers, including governments, may be more susceptible to economic weakness and more likely to default. Emerging market countries also may have relatively unstable governments, weaker economies, and less-developed legal systems with fewer security holder rights.
3 
 
·Foreign Risk. Foreign investments involve additional risks not typically associated with investing in U.S. Government securities and/or securities of domestic companies, including currency rate fluctuations, political and economic instability, differences in financial reporting standards and less strict regulation of securities markets. The withdrawal of the United Kingdom from the European Union (so-called Brexit) may create greater economic uncertainty for European debt issuers and negatively impact their credit quality. Securities subject to these risks may be less liquid than those that are not subject to these risks.
·Government Securities Risk. It is possible that the U.S. Government would not provide financial support to its agencies or instrumentalities if it is not required to do so by law. If a U.S. Government agency or instrumentality in which the Fund invests defaults and the U.S. Government does not stand behind the obligation, the Fund’s share price or yield could fall. Securities of U.S. Government sponsored entities, such as Freddie Mac or Fannie Mae, are neither issued nor guaranteed by the U.S. Government. The U.S. Government’s guarantee of ultimate payment of principal and timely payment of interest of the U.S. Government securities owned by the Fund does not imply that the Fund’s shares are guaranteed by the Federal Deposit Insurance Corporation or any other government agency, or that the price of the Fund’s shares will not fluctuate.
·High-Yield Bond Risk. Lower-quality bonds, known as high-yield bonds or “junk bonds,” present a significant risk for loss of principal and interest. These bonds offer the potential for higher return, but also involve greater risk than bonds of higher quality, including an increased possibility that the bond’s issuer, obligor or guarantor may not be able to make its payments of interest and principal (credit quality risk). If that happens, the value of the bond may decrease, and the Fund’s share price may decrease and its income distribution may be reduced. An economic downturn or period of rising interest rates (interest rate risk) could adversely affect the market for these bonds and reduce the Fund’s ability to sell its bonds (liquidity risk). The lack of a liquid market for these bonds could decrease the Fund’s share price. The ability of governments to repay their obligations is adversely impacted by default, insolvency, bankruptcy or by political instability, including authoritarian and/or military involvement in governmental decision-making, armed conflict, civil war, social instability and the impact of these events and circumstances on a country’s economy and its government’s revenues. Therefore, government bonds can present a significant risk. Governments may also repudiate their debts in spite of their ability to pay. The Fund’s ability to recover from a defaulting government is limited because that same government may block access to court-mandated legal remedies or other means of recovery.
·Interest Only Securities Risk. Certain securities, called “interest only securities” involve greater uncertainty regarding the return on investment. An interest only security is not entitled to any principal payments. If the mortgage assets in a pool prepay or default at rapid rates, it may reduce the amount of interest available to pay a related interest only security and may cause an investor in that interest only security to fail to recover the investor’s initial investment.
·Interest Rate Risk. The value of the Fund may fluctuate based on changes in interest rates and market conditions. As interest rates rise, the value of income producing instruments may decrease. This risk increases as the term of the note increases. Income earned on floating- or variable-rate securities will vary as interest rates decrease or increase. However, the interest rates on variable-rate securities, as well as certain floating-rate securities whose interest rates are reset only periodically, can fluctuate in value as a result of interest rate changes when there is an imperfect correlation between the interest rates on the securities and prevailing market interest rates.
·Issuer-Specific Risk. The value of a specific security can be more volatile than the market as a whole and can perform differently from the value of the market as a whole.
·Legislative Change Risk. Municipal securities are subject to the risk that legislative changes and local and business developments may adversely affect the yield or value of the Fund’s investments in such securities.
·Liquidity Risk. Some securities may have few market-makers and low trading volume, which tends to increase transaction costs and may make it difficult for the Fund to dispose of a security at all or at a price which represents current or fair market value.
·Management Risk. The strategy used by the Advisor may fail to produce the intended results. The ability of the Fund to meet its investment objectives is directly related to the Advisor’s investment strategies for the Fund. Your investment in the Fund varies with the effectiveness of the Advisor’s research, analysis and asset allocation among portfolio securities. If the Advisor’s investment strategies do not produce the expected results, your investment could be diminished or even lost.
4 
 
·Market Risk. Overall fixed income market risks may affect the value of individual securities in which the Fund invests. Factors such as global interest rate levels, economic growth, market conditions and political events affect the fixed income securities markets. When the value of the Fund’s investments goes down, your investment in the Fund decreases in value and you could lose money.
·Municipal Securities Risk. The value of municipal bonds that depend on a specific revenue source or general revenue source to fund their payment obligations may fluctuate as a result of changes in the cash flows generated by the revenue source(s) or changes in the priority of the municipal obligation to receive the cash flows generated by the revenue source(s). In addition, changes in federal tax laws or the activity of an issuer may adversely affect the tax-exempt status of municipal bonds. Investments in inverse floating rate securities typically involve greater risk than investments in municipal bonds of comparable maturity and credit quality and their values are more volatile than municipal bonds due to the leverage they entail.
·Portfolio Turnover Risk. The frequency of the Fund’s transactions will vary from year to year. Increased portfolio turnover may result in higher brokerage commissions, dealer mark-ups and other transaction costs and may result in taxable capital gains. Higher costs associated with increased portfolio turnover may offset gains in the Fund’s performance. Turnover increased as the Fund made strategic changes to portfolio allocation to take advantage of the changing interest rate landscape and to address an increase in capital share activity. The Fund’s portfolio turnover is expected to be over 100% annually, as the Fund’s holdings are frequently traded.
·Preferred Security Risk. The value of preferred securities will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of preferred stock. Preferred securities are also subject to credit risk, which is the possibility that an issuer of preferred stock will fail to make its dividend payments.
·Repurchase Agreement Risk. The Fund may enter into repurchase agreements in which it purchases a security (known as the “underlying security”) from a securities dealer or bank. In the event of a bankruptcy or other default by the seller of a repurchase agreement, the Fund could experience delays in liquidating the underlying security and losses in the event of a decline in the value of the underlying security while the Fund is seeking to enforce its rights under the repurchase agreement.
·Short Sale Risk. If a security sold short or other instrument increases in price, the Fund may have to cover its short position at a higher price than the short sale price, resulting in a loss. The Fund may not be able to successfully implement its short sale strategy due to limited availability of desired securities or for other reasons.
·STRIPS Risk. STRIPS are a type of zero coupon bond. Zero coupon bonds do not make periodic interest payments. Instead, they are sold at a discount from their face value and can be redeemed at face value when they mature. The market value of a zero-coupon bond is generally more volatile than the market value of other fixed income securities with similar maturities that make periodic interest payments. Zero coupon bonds may also respond to changes in interest rates to a greater degree than other fixed income securities with similar maturities and credit quality.
·Variable and Floating Rate Securities Risk. Variable and floating rate securities may decline in value if market interest rates or interest rates paid by them do not move as expected. Conversely, variable and floating rate securities will not generally rise in value if market interest rates decline. Variable and floating rate securities may be subject to greater liquidity risk than other debt securities, meaning that there may be limitations on the Fund’s ability to sell the securities at any given time. Certain variable and floating rate securities have an interest rate floor feature, which prevents the interest rate payable by the security from dropping below a specified level as compared to a reference interest rate (the “reference rate”), such as LIBOR. Such a floor protects the Fund from losses resulting from a decrease in the reference rate below the specified level. However, if the reference rate is below the floor, there will be a lag between a rise in the reference rate and a rise in the interest rate payable by the security, and the Fund may not benefit from increasing interest rates for a significant period of time.
5 
 

 

Performance: The Fund acquired the assets and liabilities of the Predecessor Short Duration Fund on July 15, 2019. As a result of the reorganization, the Fund is the accounting successor of the Predecessor Short Duration Fund. Performance results shown in the bar chart and the performance table below reflect the performance of the Predecessor Short Duration Fund’s Investor Class of shares. The bar chart and table below provide some indication of the risks of investing in the Fund and the Predecessor Short Duration Fund. The bar chart shows the annual returns of the Predecessor Short Duration Fund’s Investor Class shares performance for each calendar year since the Predecessor Short Duration Fund’s inception. Returns for the Predecessor Short Duration Fund’s other Classes of shares would be substantially similar because the shares are invested in the same portfolio of securities and the annual returns would differ only to the extent that the Classes do not have the same expenses. The performance table compares the performance of the Predecessor Short Duration Fund’s shares over time to the performance of the BofA Merrill Lynch 1-3 Year Government/Corporate Index. The Predecessor Short Duration Fund’s past performance, before and after taxes, is not necessarily an indication of how the Fund will perform in the future. Updated performance information is available at no cost by visiting www.leadercapital.com or by calling (800) 711-9164.

 

Investor Class

Calendar Year Returns as of December 31

 

Best Quarter: 06/30/2009 11.12%
Worst Quarter: 09/30/2011 (4.86)%

 

The Fund’s Investor Class shares had a total return of 2.04% during the period January 1, 2019 to June 30, 2019.

 

Average Annual Total Returns

(For the periods ended December 31, 2018)

  One Year Five Year Ten Year Since Inception*
Investor Class Return Before Taxes 2.34% 0.16% 2.21% 2.34%*
Investor Class Return After Taxes on Distributions 1.15% (0.89%) 1.15% 1.12%*
Investor Class Return After Taxes on Distributions
and Sale of Fund Shares
1.38% (0.34%) 1.27% 1.32%*
Institutional Class Return Before Taxes 2.86% 0.73% 3.45% 3.71%**
Class A Return Before Taxes 0.64% (0.66%) N/A 0.85%***
Class C Return Before Taxes 1.95% (0.27%) N/A 0.91%****
BofA Merrill Lynch 1-3 Year
Government/Corporate Index+
1.64% 1.04% 1.56% 2.39%*
*Inception date for Investor Class was July 14, 2005.
**Inception date for Institutional Class was October 31, 2008.
***Inception date for Class A was March 21, 2012.
****Inception date for Class C was August 8, 2012.

 

After tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the effect of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares of the Fund through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (“IRAs”). After-tax returns are shown for only Investor Class shares, and after-tax returns for other classes will vary.

 

+ The BofA Merrill Lynch 1-3 Year Government/Corporate Index is an index tracking short-term U.S. government and corporate securities with maturities between 1 and 2.99 years. The index is produced by BofA Merrill Lynch. The index does not reflect the deduction of fees, expenses or taxes that mutual fund investors bear. Unlike a mutual fund, an index does not reflect any trading costs or management fees. Investors cannot directly invest in an index.

6 
 

 

Investment Advisor: Leader Capital Corp. is the Fund’s investment advisor.

 

Investment Advisor Portfolio Manager: John E. Lekas, founder of Leader Capital Corp., has been the Fund’s and Predecessor Short Duration Fund’s portfolio manager since it commenced operations in July 2005.

 

Purchase and Sale of Fund Shares: For Institutional Class shares, the minimum initial investment amount for an account is $2,000,000. There is no minimum for subsequent investments. For Investor Class, Class A, and Class C shares, the minimum initial investment amount for all accounts (including IRAs) is $2,500 and the minimum subsequent investment is $100. You may purchase and redeem shares of the Fund on any day that the New York Stock Exchange is open. Redemption requests may be made in writing, by telephone, or through a financial intermediary and will be paid by ACH, check or wire transfer.

 

Tax Information: Dividends and capital gain distributions you receive from the Fund, whether you reinvest your distributions in additional Fund shares or receive them in cash, are taxable to you at either ordinary income or capital gains tax rates unless you are investing through a tax-deferred plan such as an IRA or 401(k) plan.

 

Payments to Broker-Dealers and Other Financial Intermediaries: If you purchase shares of 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 website for more information.

7 
 

LEADER TOTAL RETURN FUND SUMMARY

 

Investment Objective: The investment objective of the Leader Total Return Fund (the “Fund”) is to seek income and capital appreciation to produce a high total return.

 

Fees and Expenses of the Fund: The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. You may qualify for sales charge discounts on purchases of Class A shares if you and your family invest, or agree to invest in the future, at least $50,000 in the Fund. More information about these sales charge discounts and other discounts is available from your financial professional and in the section How to Purchase Shares of the Fund’s Prospectus and in the section Purchase, Redemption and Pricing of Shares of the Fund’s Statement of Additional Information.

 

Shareholder Fees

(fees paid directly from your investment)

Institutional
Shares
Investor
Shares
Class A
Shares
Class C
Shares

Maximum Sales Charge (Load) Imposed on Purchases

(as a % of offering price)

None None 1.50% None
Maximum Deferred Sales Charge (Load)
(as a % of the lower of original purchase price or
redemption proceeds)(1)
None None None 1.00%
Maximum Sales Charge (Load) Imposed on
Reinvested Dividends and other Distributions
None None None None

Redemption Fee

(as a % of amount redeemed, on shares held less than six months)

None None None None

Annual Fund Operating Expenses

(expenses that you pay each year as a
percentage of the value of your investment)(2)

       
Management Fees 0.75% 0.75% 0.75% 0.75%
Distribution and/or Service (12b-1) Fees None 0.50% 0.50% 1.00%
Other Expenses 1.13% 1.17% 1.04% 1.21%
Acquired Fund Fees and Expenses(3) 0.03% 0.03% 0.03% 0.03%
Total Annual Fund Operating Expenses 1.91% 2.45% 2.32% 2.99%
(1)A contingent deferred sales charge of 1.00% applies on certain redemptions made within 12 months of their purchase date.
(2)The Fund is the successor to the Leader Total Return Fund (the “Predecessor Total Return Fund”), a series of Northern Lights Fund Trust, which was reorganized into the Fund on July 15, 2019.
(3)Acquired Fund Fees and Expenses are the indirect costs of investing in other investment companies. The operating expenses in this fee table do not correlate to the expense ratio in the Fund’s financial highlights because the financial statements include only the direct operating expenses incurred by the Fund.

 

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:

 

Class 1 Year 3 Years 5 Years 10 Years
Institutional Shares $194 $600 $1,032 $2,233
Investor Shares $248 $764 $1,306 $2,786
Class A Shares $382 $864 $1,372 $2,766
Class C Shares $402 $924 $1,572 $3,308

 

8 
 

 

Portfolio Turnover: The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance. During the most recent fiscal year, the portfolio turnover rate of the Predecessor Total Return Fund was 397.79% of the average value of its portfolio.

 

Principal Investment Strategies: The Fund seeks to achieve its investment objective by investing primarily in domestic and foreign fixed income securities of various maturities and credit qualities that are denominated in U.S. dollars or foreign currencies. Fixed income security types include bonds, convertible debt securities, interest-only securities, preferred securities, notes and debentures issued by corporations, governments and their agencies or instrumentalities as well as mortgage-backed securities (agency, adjustable rate and collateralized mortgage-backed securities) and asset-backed securities (loan and credit-backed securities including collateralized loan obligations (“CLOs”). The Fund’s investments in foreign issuers may include issuers from emerging markets. The Fund defines emerging market issuers as those found outside of North America, Europe, Japan, Australia and New Zealand.

 

Individual securities are purchased without restriction as to maturity or duration; however, the average portfolio duration normally varies within 75% to 125% of the three-year average duration of the Morningstar Core Bond Index, which as of May 31, 2019 was 5.59 years. The Fund will normally have an average portfolio duration in between 3.50 to 6.00 years.

 

The Fund invests primarily in investment-grade securities, but may invest up to 40% of its total assets in high yield securities (commonly referred to as “junk bonds”). The Fund defines junk bonds as those rated lower than Baa3 by Moody’s Investors Service (“Moody’s”) or lower than BBB- by Standard and Poor’s Rating Group (“S&P”), or, if unrated, determined by the Advisor to be of similar credit quality. However, the Fund restricts its junk bond purchases to those rated B3 or higher by Moody’s or B- or higher by S&P, or, if unrated, determined by the Advisor to be of comparable quality. The Fund may invest in U.S. treasury government securities with no limit. Foreign issues denominated in U.S. dollars will be excluded from the 40% allocation limit.

 

The Advisor allocates Fund assets among various fixed income sectors, maturities and specific issues using an opportunistic approach by assessing risk and reward.

·Sector selection focuses on identifying portions of the fixed income market that the Advisor believes offer the highest yield or expected capital appreciation from interest rate declines or currency exchange rate gains.
·Maturity or yield curve management focuses on selecting securities with maturities that the Advisor believes have the highest yield and/or highest potential capital appreciation, when compared to securities with shorter or longer maturities.
·Security selection focuses on identifying specific securities that offer the highest yield or expected capital appreciation when compared to a peer group of securities with similar credit quality and maturity.

 

The Advisor buys securities for either or both their interest income and their potential for capital appreciation, generally resulting from decreases in interest rates, foreign currency appreciation, or improving credit fundamentals for a particular sector or security. The Advisor may sell a security if its value becomes unattractive, such as when its fundamentals deteriorate or when other investment opportunities exist that may have more attractive yields.

 

The Fund may short equity stocks up to 20% of its total assets. The Advisor will consider shorting the stock of issuers in which the Fund owns a position in the same issuer’s convertible debt securities. In pursuing its short strategy, the Advisor seeks to tactically take advantage of the price relationship between an issuer’s stock and its convertible securities.

 

The Advisor may engage in frequent buying and selling of securities to achieve the Fund’s investment objective.

 

9 
 

 

Principal Investment Risks: As with all mutual funds, there is the risk that you could lose money through your investment in the Fund.

·Collateralized Loan Obligation Risk. CLOs are securities backed by an underlying portfolio of debt and loan obligations, respectively. CLOs issue classes or “tranches” that vary in risk and yield and may experience substantial losses due to actual defaults, decrease of market value due to collateral defaults and removal of subordinate tranches, market anticipation of defaults and investor aversion to CLO securities as a class. The risks of investing in CLOs depend largely on the tranche invested in and the type of the underlying debts and loans in the tranche of the CLO, respectively, in which the Fund invests. CLOs also carry risks including, but not limited to, interest rate risk and credit risk.
·Convertible Debt Securities Risk. Convertible debt securities subject the Fund to the risks associated with both fixed-income securities and equity securities. If a convertible debt security’s investment value is greater than its conversion value, its price will likely increase when interest rates fall and decrease when interest rates rise. If the conversion value exceeds the investment value, the price of the convertible security will tend to fluctuate directly with the price of the underlying equity security.
·Credit Risk. Issuers may not make interest and principal payments on securities held by the Fund, resulting in losses to the Fund. In addition, the credit quality of securities held by the Fund may be lowered if an issuer’s financial condition changes. Lower credit quality may lead to greater volatility in the price of a security and lower liquidity making it difficult for the Fund to sell the security.
·Currency Risk. Currency trading risks include market risk, credit risk and country risk. Market risk results from adverse changes in exchange rates in the currencies the Fund is long or short. Credit risk results because a currency-trade counterparty may default. Country risk arises because a government may interfere with transactions in its currency.
·Emerging Markets Risk. The Fund may invest in countries with newly organized or less developed securities markets. Generally, economic structures in these countries are less diverse and mature than those in developed countries and their political systems tend to be less stable. Emerging market economies may be based on only a few industries, therefore security issuers, including governments, may be more susceptible to economic weakness and more likely to default. Emerging market countries also may have relatively unstable governments, weaker economies, and less-developed legal systems with fewer security holder rights.
·Foreign Risk. Foreign investments involve additional risks not typically associated with investing in U.S. Government securities and/or securities of domestic companies, including currency rate fluctuations, political and economic instability, differences in financial reporting standards and less strict regulation of securities markets. The withdrawal of the United Kingdom from the European Union (so-called Brexit) may create greater economic uncertainty for European debt issuers and negatively impact their credit quality. Securities subject to these risks may be less liquid than those that are not subject to these risks.
·Government Securities Risk. It is possible that the U.S. Government would not provide financial support to its agencies or instrumentalities if it is not required to do so by law. If a U.S. Government agency or instrumentality in which the Fund invests defaults and the U.S. Government does not stand behind the obligation, the Fund’s share price or yield could fall. Securities of U.S. Government sponsored entities, such as Freddie Mac or Fannie Mae, are neither issued nor guaranteed by the U.S. Government. The U.S. Government’s guarantee of ultimate payment of principal and timely payment of interest of the U.S. Government securities owned by the Fund does not imply that the Fund’s shares are guaranteed by the Federal Deposit Insurance Corporation or any other government agency, or that the price of the Fund’s shares will not fluctuate.
·High-Yield Bond Risk. Lower-quality bonds, known as high-yield bonds or “junk bonds,” present a significant risk for loss of principal and interest. These bonds offer the potential for higher return, but also involve greater risk than bonds of higher quality, including an increased possibility that the bond’s issuer, obligor or guarantor may not be able to make its payments of interest and principal (credit quality risk). If that happens, the value of the bond may decrease, and the Fund’s share price may decrease and its income distribution may be reduced. An economic downturn or period of rising interest rates (interest rate risk) could adversely affect the market for these bonds and reduce the Fund’s ability to sell its bonds (liquidity risk). The lack of a liquid market for these bonds could decrease the Fund’s share price. The ability of governments to repay their obligations is adversely impacted by default, insolvency, bankruptcy or by political instability, including authoritarian and/or military involvement in governmental decision-making, armed conflict, civil war, social instability and the impact of these events and circumstances on a country’s economy and its government’s revenues. Therefore, government bonds can present a significant risk. Governments may also repudiate their debts in spite of their ability to pay. The Fund’s ability to recover from a defaulting government is limited because that same government may block access to court-mandated legal remedies or other means of recovery.
10 
 
·Interest Only Securities Risk. Certain securities, called “interest only securities” involve greater uncertainty regarding the return on investment. An interest only security is not entitled to any principal payments. If the mortgage assets in a pool prepay or default at rapid rates, it may reduce the amount of interest available to pay a related interest only security and may cause an investor in that interest only security to fail to recover the investor’s initial investment.
·Interest Rate Risk. The value of the Fund may fluctuate based on changes in interest rates and market conditions. As interest rates rise, the value of income producing instruments may decrease. This risk increases as the term of the note increases. Income earned on floating- or variable-rate securities will vary as interest rates decrease or increase. However, the interest rates on variable-rate securities, as well as certain floating-rate securities whose interest rates are reset only periodically, can fluctuate in value as a result of interest rate changes when there is an imperfect correlation between the interest rates on the securities and prevailing market interest rates.
·Issuer-Specific Risk. The value of a specific security can be more volatile than the market as a whole and can perform differently from the value of the market as a whole.
·Liquidity Risk. Some securities may have few market-makers and low trading volume, which tends to increase transaction costs and may make it difficult for the Fund to dispose of a security at all or at a price which represents current or fair market value.
·Management Risk. The Advisor’s judgments about the attractiveness, value and potential appreciation of particular security in which the Fund invests may prove to be incorrect and may not produce the desired results.
·Market Risk. Overall fixed income market risks may affect the value of individual securities in which the Fund invests. Factors such as global interest rate levels, economic growth, market conditions and political events affect the fixed income securities markets. When the value of the Fund’s investments goes down, your investment in the Fund decreases in value and you could lose money.
·Mortgage-Backed and Asset-Backed Securities Risk. The default rate on underlying mortgage loans or asset loans may be higher than anticipated, potentially reducing payments to the Fund. Default rates are sensitive to overall economic conditions such as unemployment, wage levels and economic growth rates. Mortgage-backed securities are susceptible maturity risk because issuers of securities held by the Fund are able to prepay principal due on these securities, particularly during periods of declining interest rates.
·Portfolio Turnover Risk. The frequency of the Fund’s transactions will vary from year to year. Increased portfolio turnover may result in higher brokerage commissions, dealer mark-ups and other transaction costs and may result in taxable capital gains. Turnover increased as the Fund made strategic changes to portfolio allocation to take advantage of the changing interest rate landscape and to address an increase in capital share activity. The Fund’s portfolio turnover is expected to be over 100% annually, as the Fund’s holdings are frequently traded.
·Preferred Security Risk. The value of preferred securities will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of preferred stock. Preferred securities are also subject to credit risk, which is the possibility that an issuer of preferred stock will fail to make its dividend payments.
·Short Sale Risk. If a security sold short or other instrument increases in price, the Fund may have to cover its short position at a higher price than the short sale price, resulting in a loss. The Fund may not be able to successfully implement its short sale strategy due to limited availability of desired securities or for other reasons.

 

11 
 

 

Performance: The Fund acquired the assets and liabilities of the Predecessor Total Return Fund on July 15, 2019. As a result of the reorganization, the Fund is the accounting successor of the Predecessor Total Return Fund. Performance results shown in the bar chart and the performance table below reflect the performance of the Predecessor Total Return Fund’s Investor Class of shares. The bar chart and table below provide some indication of the risks of investing in the Fund and the Predecessor Total Return Fund. The bar chart shows the annual returns of the Predecessor Total Return Fund’s Investor Class shares performance for each calendar year since the Predecessor Total Return Fund’s inception. Returns for the Predecessor Total Return Fund’s other Classes of shares would be substantially similar because the shares are invested in the same portfolio of securities and the annual returns would differ only to the extent that the Classes do not have the same expenses. The performance table compares the performance of the Predecessor Total Return Fund’s shares over time to the performance of the Bloomberg Barclays U.S. Aggregate Bond Index. The Predecessor Total Return Fund’s past performance, before and after taxes, is not necessarily an indication of how the Fund will perform in the future. Updated performance information is available at no cost by visiting www.leadercapital.com or by calling (800) 711-9164.

 

Investor Class

Calendar Year Returns as of December 31

 

Best Quarter: 03/31/2012 5.93%
Worst Quarter: 9/30/2011 (6.72)%

 

The Fund’s Investor Class shares had a total return of 2.98% during the period January 1, 2019 to June 30, 2019.

 

Average Annual Total Returns

(For the periods ended December 31, 2018)

  One Year Five Years Since Inception
Investor Class Return Before Taxes 6.00% 1.52% 3.70%*
Investor Class Return After Taxes on Distributions 4.55% 0.06% 2.17%*
Investor Class Return After Taxes on Distributions
and Sale of Fund Shares
3.52% 0.50% 2.21%*
Institutional Class Return Before Taxes 6.62% 2.26% 4.32%*
Class A Return Before Taxes 4.39% 0.80% 2.94%**
Class C Return Before Taxes 5.46% 1.06% 3.16%***
Bloomberg Barclays US Intermediate
Aggregate Index+
0.92% 2.09% 2.27%*
*Inception date for Investor Class and Institutional Class was July 30, 2010.
**Inception date for Class A was March 21, 2012.
***Inception date for Class C is August 8, 2012.

 

After tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the effect of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares of the Fund through tax-deferred arrangements, such as 401(k) plans or IRAs. After-tax returns are shown for only Investor Class shares, and after-tax returns for other classes will vary.

 

+ Bloomberg Barclays US Intermediate Aggregate Index measures the performance of the U.S. investment grade bond market. The index invests in a wide spectrum of public, investment-grade, taxable, fixed income securities in the United States - including government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities, all with maturities of more than 1 year. Investors may not invest directly in an index. Unlike the Fund’s returns, the Index does not reflect any fees or expenses.

12 
 

Investment Advisor: Leader Capital Corp. is the Fund’s investment advisor.

 

Investment Advisor Portfolio Managers: John E. Lekas, founder of Leader Capital Corp., has been the Fund’s and Predecessor Total Return Fund’s portfolio manager since it commenced operations in July 2010.

 

Purchase and Sale of Fund Shares: For Institutional Class shares, the minimum initial investment amount for all accounts (including IRAs) is $2,000,000. There is no minimum for subsequent investments. For Investor Class, Class A and Class C shares, the minimum initial investment amount for all accounts (including IRAs) is $2,500 and the minimum subsequent investment is $100. You may purchase and redeem shares of the Fund on any day that the New York Stock Exchange is open. Redemption requests may be made in writing, by telephone, or through a financial intermediary and will be paid by ACH, check or wire transfer.

 

Tax Information: Dividends and capital gain distributions you receive from the Fund, whether you reinvest your distributions in additional Fund shares or receive them in cash, are taxable to you at either ordinary income or capital gains tax rates unless you are investing through a tax-deferred plan such as an IRA or 401(k) plan.

 

Payments to Broker-Dealers and Other Financial Intermediaries: If you purchase shares of 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 website for more information.

13 
 

LEADER HIGH QUALITY LOW DURATION BOND FUND SUMMARY

 

Investment Objectives: The primary investment objective of the Leader High Quality Low Duration Bond Fund (the “Fund”) is to deliver a high level of current income, with a secondary objective of capital appreciation.

 

Fees and Expenses of the Fund: The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. More information about these sales charge discounts and other discounts is available from your financial professional and in the How to Purchase Shares of the Fund’s Prospectus and in the section Purchase, Redemption and Pricing of Shares of the Fund’s Statement of Additional Information.

 

Shareholder Fees

(fees paid directly from your investment)

Institutional
Shares
Investor
Shares

Maximum Sales Charge (Load) Imposed on Purchases

(as a % of offering price)

None None

Maximum Deferred Sales Charge (Load)

(as a % of the lower of original purchase price or redemption proceeds)

None None

Maximum Sales Charge (Load) Imposed

on Reinvested Dividends and other Distributions

None None
Redemption Fee (as a percentage of amount redeemed) None None

Annual Fund Operating Expenses

(expenses that you pay each year as a
percentage of the value of your investment)(1)

   
Management Fees 0.65% 0.65%
Distribution and/or Service (12b-1) Fees(2) None 0.38%
Other Expenses 0.30% 0.31%
Acquired Fund Fees & Expenses(3) 0.01% 0.01%
Total Annual Fund Operating Expenses 0.96% 1.35%
(1)The Fund is the successor to the Leader High Quality Low Duration Bond Fund (the “Predecessor High Quality Low Duration Bond Fund”), a series of Northern Lights Fund Trust, which was reorganized into the Fund on July 15, 2019.
(2)The Fund has limited 12b-1 fees for Investor Class shares to 0.38% for the current fiscal year.
(3)Acquired Fund Fees and Expenses are the indirect costs of investing in other investment companies. The operating expenses in this fee table do not correlate to the expense ratio in the Fund’s financial highlights because the financial statements include only the direct operating expenses incurred by the Fund.

 

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 and the contractual agreement to reduce management fees and pay other Fund expenses remains in effect only until September 30, 2020. Although your actual costs may be higher or lower, based upon these assumptions your costs would be:

 

Class 1 Year 3 Years 5 Years 10 Years
Institutional Shares $98 $306 $531 $1,178
Investor Shares $137 $428 $739 $1,624

 

Portfolio Turnover: The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance. During the most recent fiscal year, the Predecessor High Quality Low Duration Bond Fund’s portfolio turnover rate was 248.18% of the average value of its portfolio.

 

14 
 

 

Principal Investment Strategies: Under normal circumstances, the Fund invests at least 80% of its net assets, plus any amount of borrowings for investment purposes, in high quality low duration debt securities. For the purposes of the Fund’s 80% investment policy, the Fund defines the following US dollar denominated domestic and foreign securities as high quality low duration debt securities:

·bonds and corporate debt
·bank loans and bank loan participations
·agency and non-agency commercial mortgage-backed securities (“CMBS”) and residential mortgage-backed securities (“RMBS”)
·interest-only securities
·collateralized loan obligations (“CLOs”) that are backed by domestic and foreign floating rate debt obligations
·collateralized debt obligations (“CDOs”) that are backed by domestic and foreign floating rate debt obligations
·US government securities

 

The Fund normally invests in floating rate debt securities with an interest rate that resets quarterly based on the London Interbank Offered Rate (“LIBOR”). The Fund allocates assets across floating rate debt security types without restriction, subject to its 80% high quality low duration debt policy. The Fund’s investments in foreign issuers may include issuers from emerging markets. The Fund defines emerging market issuers as those found outside of North America, Europe, Japan, Australia and New Zealand.

 

While the Fund invests without restriction as to the maturity of any single debt security, the Fund’s portfolio average effective duration (a measure of a security’s sensitivity to changes in prevailing interest rates) will be one year or less. When the Fund invests in debt securities, each security must be high quality, which is defined as being rated no lower than the A category by Standard & Poor’s Ratings Group, Moody’s Investors Service or Fitch Ratings, Inc. If a debt security is downgraded to below an A rating, the Fund will sell such security within 30 days.

 

CMBS, RMBS, CLOs, and CDOs are single-purpose investment vehicles that hold baskets of loans and issue securities that are paid from the cash flows of the underlying loans. Investors purchase a particular class of securities called a tranche (a French word for slice). The tranches receive payments from the principal and interest payments made by underlying borrowers in accordance to the rank of the tranche. Normally, CMBS, RMBS, CLOs, and CDOs have multiple tranches with investors in the bottom tranches having last priority to receive payment. By investing in A rated or better debt tranches, the Fund will not be less than third in priority for payment. Loans and loan participations may be unsecured which means that they are not collateralized by any specific assets of the borrower. The Fund allocates assets across security types without restriction, subject to its 80% high quality low duration debt policy. The Fund does not purchase floating rate securities with subordinate underlying loans or debt obligations.

 

The Advisor utilizes a fundamental top-down analysis, meaning the Advisor analyzes the economy, interest rate cycles, the supply and demand for credit and the characteristics of individual securities in making investment selections for the Fund. The Advisor may sell a security if its value becomes unattractive, such as when its fundamentals deteriorate, its credit rating is downgraded (including, as described above, sales required when a security is downgraded to below an A rating) or when other investment opportunities exist that may have more attractive yields.

 

As a result of its trading strategy, the Fund expects to engage in frequent portfolio transactions that will likely result in higher portfolio turnover and commissions than many investment companies.

 

The Fund uses effective duration to measure interest rate risk. While the Fund invests without restriction as to the maturity of any single debt security, the Fund’s portfolio average effective duration (a measure of interest rate risk similar to maturity) will be one year or less. The Fund defines the effective duration of a floating rate security as the time remaining to its next interest rate reset.

 

Principal Investment Risks: As with all mutual funds, there is the risk that you could lose money through your investment in the Fund.

·CLO and CDO Risk. CLOs and CDOs are securities backed by an underlying portfolio of loan and debt obligations, respectively. CLOs and CDOs issue classes or “tranches” that vary in risk and yield and may experience substantial losses due to actual defaults, decrease of market value due to collateral defaults and removal of subordinate tranches, market anticipation of defaults and investor aversion to CLO and CDO securities as a class. Investments in CLO and CDO securities may be riskier and less transparent than direct investments in the underlying loans and debt obligations.

The risks of investing in CLOs and CDOs depend largely on the tranche invested in and the type of the underlying

15 
 
debts and loans in the tranche of the CLO or CDO, respectively, in which the Fund invests. The tranches in a CLO or CDO vary substantially in their risk profile. The senior tranches are relatively safer because they have first priority on the collateral in the event of default. As a result, the senior tranches of a CLO or CDO generally have a higher credit rating and offer lower coupon rates than the junior tranches, which offer higher coupon rates to compensate for their higher default risk. The CLOs and CDOs in which the Fund may invest may incur, or may have already incurred, debt that is senior to the Fund’s investment. CLOs and CDOs also carry risks including, but not limited to, interest rate risk and credit risk.

Investments in CLOs and CDOs may be subject to certain tax provisions that could result in the Fund incurring tax or recognizing income prior to receiving cash distributions related to such income. CLOs and CDOs that fail to comply with certain U.S. tax disclosure requirements may be subject to withholding requirements that could adversely affect cash flows and investment results. Any unrealized losses the Fund experiences with respect to its CLO and CDO investments may be an indication of future realized losses.

The senior tranches of certain CLOs and CDOs in which the Fund invests may be concentrated in a limited number of industries or borrowers, which may subject those CLOs and CDOs, and in turn the Fund, to the risk of significant loss if there is a downturn in a particular industry in which the CLO or CDO is concentrated.

The application of risk retention rules to CLOs and CDOs may affect the overall CLO and CDO market, resulting in fewer investment opportunities for the Fund.

·Credit Risk. The issuer of a fixed income security may not be able to make interest or principal payments when due. Generally, the lower the credit rating of a security, the greater the risk is that the issuer will default on its obligation.
·Distribution Risk. There is a risk that shareholders may not receive distributions from the Fund or that such distributions may not grow or may be reduced over time, including on a per share basis. The Fund may have difficulty paying out distributions if income from its investments is recognized before or without receiving cash representing such income.
·Emerging Markets Risk. The Fund may invest in countries with newly organized or less developed securities markets. Generally, economic structures in these countries are less diverse and mature than those in developed countries and their political systems tend to be less stable. Emerging market economies may be based on only a few industries, therefore security issuers, including governments, may be more susceptible to economic weakness and more likely to default. Emerging market countries also may have relatively unstable governments, weaker economies, and less-developed legal systems with fewer security holder rights.
·Foreign Risk. Foreign investments involve additional risks not typically associated with investing in U.S. Government securities and/or securities of domestic companies, including currency rate fluctuations, political and economic instability, differences in financial reporting standards and less strict regulation of securities markets. The withdrawal of the United Kingdom from the European Union (so-called Brexit) may create greater economic uncertainty for European debt issuers and negatively impact their credit quality. Securities subject to these risks described above may be less liquid than those that are not subject to these risks.
·Government Securities Risk. It is possible that the U.S. Government would not provide financial support to its agencies or instrumentalities if it is not required to do so by law. If a U.S. Government agency or instrumentality in which the Fund invests defaults and the U.S. Government does not stand behind the obligation, the Fund’s share price or yield could fall. Securities of U.S. Government sponsored entities, such as Freddie Mac or Fannie Mae, are neither issued nor guaranteed by the U.S. Government. The U.S. Government’s guarantee of ultimate payment of principal and timely payment of interest of the U.S. Government securities owned by the Fund does not imply that the Fund’s shares are guaranteed by the Federal Deposit Insurance Corporation or any other government agency, or that the price of the Fund’s shares will not fluctuate.
·Interest Only Securities Risk. Certain securities, called “interest only securities” involve greater uncertainty regarding the return on investment. An interest only security is not entitled to any principal payments. If the mortgage assets in a pool prepay or default at rapid rates, it may reduce the amount of interest available to pay a related interest only security and may cause an investor in that interest only security to fail to recover the investor’s initial investment.
·Interest Rate Risk. The value of the Fund may fluctuate based on changes in interest rates and market conditions. As interest rates rise, the value of income producing instruments may decrease. This risk increases as the term of the note increases. Income earned on floating-rate securities will vary as interest rates decrease or increase. However, the interest rates on certain floating-rate securities whose interest rates are reset only periodically, can fluctuate in value as a result of interest rate changes when there is an imperfect correlation between the interest rates on the securities and prevailing market interest rates.
·Liquidity Risk. Some securities may have few market-makers and low trading volume, which tends to increase transaction costs and may make it difficult for the Fund to dispose of a security at all or at a price which represents current or fair market value.
16 
 
·Loan and Loan Participation Risk. The secondary market for loans and loan participations is a private, unregulated inter-dealer or inter-bank resale market. Purchases and sales of loans and loan participations are generally subject to contractual restrictions that must be satisfied before a loan or loan participations can be bought or sold. These restrictions may impede the Fund’s ability to buy or sell loans and loan participations and may negatively impact the transaction price. It may take longer than seven days for transactions in loans and loan participations to settle. The Fund may hold cash, sell investments or temporarily borrow from banks or other lenders to meet short-term liquidity needs due to the extended loan settlement process, such as to satisfy redemption requests from Fund shareholders. Loan participations are indirectly subject to default risk of the bank granting the participation. Such a default will likely delay the Fund’s access to the cash flows from underlying loan. Loans and loan participations may be unsecured which means that they are not collateralized by any specific assets of the borrower.

U.S. federal securities laws afford certain protections against fraud and misrepresentation in connection with the offering or sale of a security, as well as against manipulation of trading markets for securities. The typical practice of a lender in relying exclusively or primarily on reports from the borrower may involve the risk of fraud, misrepresentation, or market manipulation by the borrower. It is unclear whether U.S. federal securities law protections are available to an investment in a loan. In certain circumstances, loans may not be deemed to be securities, and in the event of fraud or misrepresentation by a borrower, lenders may not have the protection of the anti-fraud provisions of the federal securities laws.

·Management Risk. The strategy used by the Advisor may fail to produce the intended results. The ability of the Fund to meet its investment objectives is directly related to the Advisor’s investment strategies for the Fund. Your investment in the Fund varies with the effectiveness of the Advisor’s research, analysis and asset allocation among portfolio securities. The Advisor’s judgments about the attractiveness, value and potential appreciation of particular security in which the Fund invests may prove to be incorrect and may not produce the desired results. If the Advisor’s investment strategies do not produce the expected results, your investment could be diminished or even lost. The Fund’s board of trustees may change Fund operating policies and strategies without prior notice or shareholder approval, the effects of which may be adverse.
·Market Risk. Overall fixed income market risks may affect the value of individual securities in which the Fund invests. Factors such as global interest rate levels, economic growth, market conditions and political events affect the fixed income securities markets. On July 27, 2017, the head of the United Kingdom’s Financial Conduct Authority announced a desire to phase out the use of LIBOR by the end of 2021. There remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement rate. As a result, any impact of a transition away from LIBOR on the Fund or the instruments in which the Fund invests cannot yet be determined. Industry initiatives are underway to identify alternative reference rates; however, there is no assurance that the composition or characteristics of any such alternative reference rate will be similar to or produce the same value or economic equivalence as LIBOR or that instruments using an alternative rate will have the same volume or liquidity. As a result, the transition process might lead to increased volatility and reduced liquidity in markets that currently rely on LIBOR to determine interest rates; a reduction in the value of some LIBOR-based investments; and/or costs incurred in connection with closing out positions and entering into new agreements. These effects could occur prior to the end of 2021 as the utility of LIBOR as a reference rate could deteriorate during the transition period. Uncertainty relating to the LIBOR calculation process may adversely affect the value of the Fund’s investments in floating rate debt securities that are indexed to LIBOR. When the value of the Fund’s investments goes down, your investment in the Fund decreases in value and you could lose money.
·Mortgage-Backed Securities Risk. When the Fund invests in RMBS and CMBS, the Fund is subject to the risk that, if the underlying borrowers fail to pay interest or repay principal, the assets backing these securities may not be sufficient to support payments on the securities. The value of these securities may be significantly affected by changes in interest rates, the market’s perception of issuers, and the creditworthiness of the parties involved. RMBS default rates tend to be sensitive to these conditions and to home prices. CMBS default rates tend to be sensitive to overall economic conditions and to localized commercial property vacancy rates and prices. Any unrealized losses the Fund experiences with respect to its RMBS and CMBS investments may be an indication of future realized losses.
oRMBS are subject to prepayment risk and extension risk. If interest rates rise, there may be fewer prepayments, which would cause an RMBS’s average maturity to rise, increasing the potential for the Fund to lose money. If interest rates fall, there may be faster prepayments, which would cause an RMBS’s average maturity to decline, increasing the risk that the Fund will have reinvest prepayment proceeds at lower interest rates.
oMortgage-backed securities issued or guaranteed by private issuers are also known as “non-agency MBS”. Non-agency MBS generally are a greater credit risk than MBS issued by the U.S. government, and the market for non-agency MBS is smaller and less liquid than the market for government issued MBS.
·Portfolio Turnover Risk. The frequency of the Fund’s transactions will vary from year to year. Increased portfolio turnover may result in higher brokerage commissions, dealer mark-ups and other transaction costs and may
17 
 
result in taxable capital gains. Higher costs associated with increased portfolio turnover may offset gains in the Fund’s performance. Turnover increased as the Fund made strategic changes to portfolio allocation to take advantage of the changing interest rate landscape and to address an increase in capital share activity. The Fund’s portfolio turnover is expected to be over 100% annually, as the Fund’s holdings are frequently traded.
·Regulatory Risk. Changes in laws or regulations governing the Fund’s operations may adversely affect the Fund or cause an alteration in the Fund’s strategy. The SEC has raised questions regarding certain non-traditional investments, including CLOs.

 

Performance: The Fund acquired the assets and liabilities of the Predecessor High Quality Low Duration Bond Fund on July 15, 2019. As a result of the reorganization, the Fund is the accounting successor of the Predecessor High Quality Low Duration Bond Fund. Performance results shown in the bar chart and the performance table below reflect the performance of the Predecessor High Quality Low Duration Bond Fund’s Investor Class of shares. The bar chart and table below provide some indication of the risks of investing in the Fund and the Predecessor High Quality Low Duration Bond Fund. The bar chart shows the annual returns of the Predecessor High Quality Low Duration Bond Fund’s Investor Class shares performance for each calendar year since the Predecessor High Quality Low Duration Bond Fund’s inception. Returns for the Predecessor High Quality Low Duration Bond Fund’s Institutional Class of shares would be substantially similar because the shares are invested in the same portfolio of securities and the annual returns would differ only to the extent that the Classes do not have the same expenses. The performance table compares the performance of the Predecessor High Quality Low Duration Bond Fund’s shares over time to the performance of the S&P/LSTA Leveraged Loan Total Return Index. The Predecessor High Quality Low Duration Bond Fund’s past performance, before and after taxes, is not necessarily an indication of how the Fund will perform in the future. Updated performance information is available at no cost by visiting www.leadercapital.com or by calling (800) 711-9164.

 

Investor Class

Calendar Year Returns as of December 31

 

Best Quarter: 12/31/2017 0.75%
Worst Quarter: 3/21/2017 0.35%

 

The Fund’s Investor Class shares had a total return of 1.67% during the period January 1, 2019 to June 30, 2019.

 

Average Annual Total Returns

(For the periods ended December 31, 2018)

  One Year Since Inception*
Investor Class Return Before Taxes 2.05% 2.19%
Investor Class Return After Taxes on Distributions 1.05% 1.29%
Investor Class Return After Taxes on Distributions
and Sale of Fund Shares
1.21% 1.28%
Institutional Class Return Before Taxes 2.45% 2.64%
S&P/LSTA Leveraged Loan Total Return Index+ 0.44% 2.26%

* Inception date for Leader High Quality Low Duration Bond Fund was December 30, 2016.

 

After tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the effect of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown are not relevant to investors who hold shares of the Fund through tax-deferred arrangements, such as 401(k) plans or IRAs. After-tax returns are shown for only Investor Class shares, and after-tax returns for other classes will vary.

 

+ S&P/LSTA Leveraged Loan Total Return Index is a market value weighted index designed to measure the performance of the U.S. leveraged loan market based upon market weightings, spreads and interest payments. Investors may not invest directly in an index. Unlike the Fund’s returns, the Index does not reflect any fees or expenses.

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Investment Advisor: Leader Capital Corp. is the Fund’s investment advisor.

 

Investment Advisor Portfolio Manager: John E. Lekas, founder of Leader Capital Corp., has been the Fund’s and Predecessor High Quality Low Duration Bond Fund’s portfolio manager since it commenced operations in December 2016.

 

Purchase and Sale of Fund Shares: For Institutional Class shares, the minimum initial investment amount for an account is $2,000,000. There is no minimum for subsequent investments. For Investor Class, the minimum initial investment amount for all accounts (including IRAs) is $2,500 and the minimum subsequent investment is $100. You may purchase and redeem shares of the Fund on any day that the New York Stock Exchange is open. Redemption requests may be made in writing, by telephone, or through a financial intermediary and will be paid by ACH, check or wire transfer.

 

Tax Information: Dividends and capital gain distributions you receive from the Fund, whether you reinvest your distributions in additional Fund shares or receive them in cash, are taxable to you at either ordinary income or capital gains tax rates unless you are investing through a tax-deferred plan such as an IRA or 401(k) plan.

 

Payments to Broker-Dealers and Other Financial Intermediaries: If you purchase shares of 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 website for more information.

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LEADER GOVERNMENT BOND FUND SUMMARY

 

Investment Objectives: The Leader Government Bond Fund (the “Fund”) seeks to maximize total return consistent with income generation and prudent investment management.

 

Fees and Expenses of the Fund: The following table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. More information about these and other discounts is available from your financial professional and in How to Purchase Shares on page [__] of the Fund’s Prospectus.

Shareholder Fees

(fees paid directly from your investment)

Institutional Shares Investor Shares

Maximum Sales Charge (Load) Imposed on Purchases

(as a % of offering price)

None None

Maximum Deferred Sales Charge (Load)

(as a % of the lower of original purchase price or redemption proceeds)

None None

Maximum Sales Charge (Load) Imposed

on Reinvested Dividends and other Distributions

None None
Redemption Fee (as a percentage of amount redeemed) None None

Annual Fund Operating Expenses

(expenses that you pay each year as a
percentage of the value of your investment)

   
Management Fees [0.65]% [0.65]%
Distribution and/or Service (12b-1) Fees None [0.38]%
Other Expenses(1) [  ]% [  ]%
Acquired Fund Fees and Expenses (2) [0.01]% [0.01]%
Total Annual Fund Operating Expenses(3) [  ]% [  ]%

(1) The Fund has no operating history and therefore its “Other Expenses” are based on estimated amounts.

(2) Acquired Fund Fees and Expenses are the indirect costs of investing in other investment companies.

(3) “Total Annual Fund Operating Expenses” will not correlate to the expense ratio in the Fund’s financial highlights because the financial highlights include only the direct operating expenses incurred by the Fund and do not include “Acquired Fund Fees and Expenses.”

 

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:

 

Class 1 Year 3 Years 5 Years 10 Years
Institutional Shares [ ] [ ] [ ] [ ]
Investor Shares [ ] [ ] [ ] [ ]

 

Portfolio Turnover: The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance. The Fund is new and therefore it does not have a portfolio turnover rate.

 

Principal Investment Strategies: The Fund is managed by Leader Capital Corp. (the “Advisor”), and normally invests at least 80% of its net assets (including amounts borrowed for investment purposes) in government bonds, which includes securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities, such as U.S. Treasury obligations and agency mortgage-backed securities (“Agency MBS”). Through these investments, the Fund seeks to generate income while maximizing total return.

 

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The Fund will primarily invest in investment-grade rated debt securities, which can include Agency MBS issued by U.S. Government agencies or instrumentalities, including the Government National Mortgage Association (Ginnie Mae), the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac). The Fund considers a debt security to be rated investment grade if, at the time of purchase, at least one nationally recognized rating organization has rated the security investment grade or, if unrated, the Advisor, determines the security to be of comparable credit quality. The Agency MBS may be structured such that payments consist of interest-only, principal-only, or principal and interest. The Fund may also purchase these securities on a "to be announced" basis (“TBA”) and enter into dollar rolls.

 

The Fund may invest in privately placed debt securities that have not been registered for sale under the Securities Act of 1933, as amended (the “Securities Act”) either pursuant to Rule 144A or via other provisions of, or exemptions from, the Securities Act (each a “Restricted Security” and collectively, “Restricted Securities”). The Fund’s investment in Restricted Securities will be primarily in investment grade-rated Agency MBS, which benefit from superior capital structure seniority and underlying first mortgage collateral. These types of securities generally trade with more liquidity than other types of Restricted Securities that are non-investment grade. The Fund may invest in both liquid and illiquid Restricted Securities, and the categorization of a Restricted Security may change under certain market conditions or other events.

 

The Fund can invest in debt securities of any maturity or duration, but will maintain a dollar-weighted average duration of between 1 and 7 years under normal market conditions. “Duration” is a measure used to determine the sensitivity of a portfolio or security to changes in interest rates. The longer the duration of a debt security, or of the Fund’s portfolio of debt securities, the more sensitive its market price and the Fund’s value will be to changes in interest rates.

 

In managing the Fund’s portfolio, the Advisor seeks investments that it believes offer the best value relative to other comparable securities based on multiple factors, including, but not limited to, credit quality and structure, maturity, yield, credit support, and ratings information. The Advisor uses an investment process that analyzes the economy, interest rate cycles and the supply and demand for credit to identify potential investments. Next, the Adviser analyzes the characteristics of the securities in making investment selections for the Fund. The Advisor uses both hedging strategies and leverage as part of its risk-management process; through this process, the Advisor seeks to maintain relatively low volatility in the net asset value of the Fund’s portfolio.

 

The Advisor will seek to manage investment risk by varying the Fund’s investments, directly or indirectly, across multiple borrowers, types of securities, ratings, duration, and other factors that affect the Fund’s portfolio structure. The Fund may employ hedging strategies to manage interest rate, credit spread, and other risks. Accordingly, the Fund may invest in options, futures, and swaps (including interest rate swaps, credit default swaps, total return swaps, and other related derivative products), to the extent allowed under the Investment Company Act of 1940 (“1940 Act”).

 

The Fund may also utilize leverage (i.e., borrowing against a line of credit), subject to the limits of the 1940 Act. The Fund’s use of leverage will normally by through open maturity repurchase agreements. The Fund may purchase securities through repurchase agreements to generate more cash to then invest in other securities.

 

The Fund may sell investments if the Advisor determines that credit quality, maturity, yield, or ratings information, among other criteria, have changed materially from its initial analysis. The Fund may also sell investments for other reasons, including, but not limited to, securing gains, limiting losses, managing portfolio risk or liquidity, or if other investments offer better relative value and performance expectations, as determined by the Advisor.

 

The Fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

 

Principal Investment Risks: As with all mutual funds, there is the risk that you could lose money through your investment in the Fund. Many factors affect the Fund's net asset value and performance.

 

·Management Risk. The strategy used by the Advisor may fail to produce the intended results. The ability of the Fund to meet its investment objectives is directly related to the Advisor’s investment strategies for the Fund. Your investment in the Fund varies with the effectiveness of the Advisor’s research, analysis and asset allocation among portfolio securities. The Advisor’s judgments about the attractiveness, value and potential appreciation of particular security in which the Fund invests may prove to be incorrect and may not produce the desired results. If the Advisor’s investment strategies do not produce the expected results, your investment could be diminished or even lost. The Fund’s board of trustees may change Fund operating policies and strategies without prior notice or shareholder approval, the effects of which may be adverse.
21 
 
·Government Securities Risk. It is possible that the U.S. Government would not provide financial support to its agencies or instrumentalities if it is not required to do so by law. If a U.S. Government agency or instrumentality in which the Fund invests defaults and the U.S. Government does not stand behind the obligation, the Fund’s share price or yield could fall. Securities of U.S. Government sponsored entities, such as Freddie Mac or Fannie Mae, are neither issued nor guaranteed by the U.S. Government. The U.S. Government’s guarantee of ultimate payment of principal and timely payment of interest of the U.S. Government securities owned by the Fund does not imply that the Fund’s shares are guaranteed by the Federal Deposit Insurance Corporation or any other government agency, or that the price of the Fund’s shares will not fluctuate.

 

·Mortgage-Backed Securities Risk. Mortgage-backed securities represent interests in “pools” of assets. These securities are subject to credit risk, interest rate risk, “prepayment risk” (the risk that borrowers will repay a loan more quickly in periods of falling interest rates) and “extension risk” (the risk that borrowers will repay a loan more slowly in periods of rising interest rates). The value of these securities will be influenced by factors affecting the assets underlying such securities.

 

If the Fund invests in mortgage-backed securities that are subordinated to other interests in the same asset pool, the Fund may only receive payments after the pool’s obligations to other investors have been satisfied. During periods of difficult or frozen credit markets, such securities may decline in value, face valuation difficulties, become more volatile and/or become illiquid. An unexpectedly high rate of defaults on the mortgages held by a mortgage pool may limit substantially the pool’s ability to make payments of principal or interest to the Fund, reducing the values of those securities or in some cases rendering them worthless.

 

oStripped Mortgage-Backed Securities Risk. Stripped mortgage-backed securities, including those structured as interest-only and principal-only, are more volatile and may be more sensitive to the rate of prepayments than other mortgage-related securities. The structure of some of these securities may be complex and there may be less available information than other types of debt securities.

 

Stripped mortgage-backed securities are a type of mortgage-backed security that receive differing proportions of the interest and principal payments from the underlying assets. Generally, there are two classes of stripped mortgage-backed securities: Interest Only (“IO”) and Principal Only (“PO”). IOs entitle the holder to receive distributions consisting of all or a portion of the interest on the underlying pool of mortgage loans or mortgage-backed securities. POs entitle the holder to receive distributions consisting of all or a portion of the principal of the underlying pool of mortgage loans or mortgage-backed securities. The cash flows and yields on IOs and POs are extremely sensitive to the rate of principal payments (including prepayments) on the underlying mortgage loans or mortgage-backed securities. A rapid rate of principal payments may adversely affect the yield to maturity of IOs. A slow rate of principal payments may adversely affect the yield to maturity of POs. If prepayments of principal are greater than anticipated, an investor in IOs may incur substantial losses. If prepayments of principal are slower than anticipated, the yield on a PO will be affected more severely than would be the case with a traditional mortgage-backed security.

 

·Debt Securities Risk. Debt securities, such as bonds, involve interest rate risk, credit risk, extension risk, and prepayment risk, among other things.

 

oInterest Rate Risk. The value of the Fund may fluctuate based on changes in interest rates and market conditions. As interest rates rise, the value of income producing instruments may decrease. This risk increases as the term of the note increases. Income earned on floating- or variable-rate securities will vary as interest rates decrease or increase. Variable- and floating-rate securities generally are less susceptible to interest rates than fixed-rate obligations. However, the interest rates on variable-rate securities, as well as certain floating-rate securities whose interest rates are reset only periodically, can fluctuate in value as a result of interest rate changes when there is an imperfect correlation between the interest rates on the securities and prevailing market interest rates.

 

oCredit Risk. The issuer of a fixed income security may not be able to make interest or principal payments when due. Generally, the lower the credit rating of a security, the greater the risk is that the issuer will default on its obligation.

 

oPrepayment Risk. The issuer of certain securities may repay principal in advance, especially when yields fall. Changes in the rate at which prepayments occur can affect the return on investment of these securities. When debt obligations are prepaid or when securities are called, the Fund may have to reinvest in securities
22 
 
with a lower yield. The Fund also may fail to recover additional amounts (i.e., premiums) paid for securities with higher coupons, resulting in an unexpected capital loss.

 

oExtension Risk. When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these obligations to fall. Rising interest rates tend to extend the duration of securities, making them more sensitive to changes in interest rates. The value of longer-term securities generally changes more in response to changes in interest rates than shorter-term securities. As a result, in a period of rising interest rates, securities may exhibit additional volatility and may lose value.

 

·Derivatives Risk. Derivatives are instruments whose value depends on, or is derived from, the value of an underlying asset, reference rate or index. Derivatives may be riskier than other types of investments because they may be more sensitive to changes in economic or market conditions than other types of investments and could result in losses that significantly exceed the Fund’s original investment. Successful use of derivative instruments by the Fund depends on the Advisor’s judgment with respect to a number of factors and the Fund’s performance could be worse and/or more volatile than if it had not used these instruments. In addition, the fluctuations in the value of derivatives may not correlate perfectly with the value of any portfolio assets being hedged, the performance of the asset class to which the Advisor seeks exposure, or the overall securities markets.

 

oCounterparty Risk. Counterparty risk is the risk that a counterparty to a transaction in a financial instrument held by the Fund or by a special purpose or structured vehicle invested in by the Fund may become insolvent or otherwise fail to perform its obligations. As a result of such insolvency or failure to perform, the Fund may obtain no or limited recovery of its investment, and any recovery may be significantly delayed.

 

oFutures Risk. The loss that may be incurred in futures contracts may exceed the amount of the premium paid and may be potentially unlimited. Futures markets are highly volatile and the use of futures may increase the volatility of the Fund’s NAV. Additionally, because of the low collateral deposits normally involved in futures trading, a relatively small price movement in a futures contract may result in substantial losses to the Fund. Futures contracts may be illiquid. Furthermore, exchanges may limit fluctuations in futures contract prices during a trading session by imposing a maximum permissible price movement on each futures contract. The Fund may be disadvantaged if it is prohibited from executing a trade outside the daily permissible price movement on each futures contract. Futures transactions involve additional risks, including counterparty risk, hedging risk, and pricing risk.

 

oOptions Risk. Options trading is a highly specialized activity that involves unique investment techniques and risks. The value of options can be highly volatile, and their use can result in loss if the Advisor is incorrect in its expectation of price fluctuations. Options are subject to correlation risk because there may be an imperfect correlation between the options and the underlying asset that cause a given transaction to fail to achieve its objectives. The successful use of options depends on the Advisor’s ability to correctly predict future price fluctuations and the degree of correlation between the options and such assets. Options are also particularly subject to leverage risk and can be subject to liquidity risk.

 

oSwap Agreement Risk. Swap agreements can be either bilateral agreements traded over the counter or exchange-traded agreements. The Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a counterparty. Swap agreements may be illiquid and therefore may increase the Fund’s exposure to the credit risk of each counterparty.

 

oTax Risk. The Federal income tax treatment of a derivative may not be as favorable as a direct investment in an underlying asset and may adversely affect the timing, character and amount of income the Fund realizes from its investments. As a result, a larger portion of the Fund’s distributions may be treated as ordinary income rather than capital gains. In addition, certain derivatives are subject to mark-to-market or straddle provisions of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). If such provisions are applicable, there could be an increase (or decrease) in the amount of taxable dividends paid by the Fund. In addition, the tax treatment of certain derivatives, such as swaps, is unsettled and may be subject to future legislation, regulation or administrative pronouncements issued by the Internal Revenue Service (the “IRS”).

 

·Hedging Transactions Risk. The success of any hedging strategy utilized by the Fund will be subject to the Advisor’s ability to correctly assess the degree of correlation between the performance of the instruments used in the hedging strategy and the performance of the investments in the portfolio being hedged, and its ability to continually recalculate, readjust, and execute hedges in an efficient and timely manner. Therefore, a hedging strategy used by the Fund may not work as intended. In addition, it is not possible to hedge fully or perfectly against any risk, and hedging entails its own costs (such as trading commissions and fees).
23 
 

 

·Leverage Risk. Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage.

 

oRepurchase Agreements Risk. The Fund may enter into repurchase agreements in which it purchases a security (known as the “underlying security”) from a securities dealer or bank. In the event of a bankruptcy or other default by the seller of a repurchase agreement, the Fund could experience delays in liquidating the underlying security and losses in the event of a decline in the value of the underlying security while the Fund is seeking to enforce its rights under the repurchase agreement.

 

oDollar Rolls Risk. Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage.

 

oTo Be Announced (TBA) Transactions Risk. TBA investments include when-issued and delayed delivery securities and forward commitments. TBA transactions involve the risk that the security the Fund buys will lose value prior to its delivery. The Fund is subject to this risk whether the Fund takes delivery of the securities on the settlement date for a transaction. There also is the risk that the security will not be issued or that the other party to the transaction will not meet its obligation. If this occurs, the Fund loses both the investment opportunity for the assets it set aside to pay for the security and any gain in the security’s price. The Fund may also take a short position in a TBA investment when it owns or has the right to obtain, at no added cost, identical securities. If the Fund takes such a short position, it may reduce the risk of a loss if the price of the securities declines in the future, but will lose the opportunity to profit if the price rises.

 

·Liquidity Risk. Some securities may have few market-makers and low trading volume, which tends to increase transaction costs and may make it difficult for the Fund to dispose of a security at all or at a price which represents current or fair market value.

 

·Valuation Risk. Valuation may be more difficult in times of market turmoil since many investors and market makers may be reluctant to purchase complex instruments or quote prices for them. Derivatives may also expose the Fund to greater risk and increase its costs. Certain transactions in derivatives involve substantial leverage risk and may expose the Fund to potential losses that exceed the amount originally invested by the Fund.

 

·Market Risk. Overall fixed income market risks may affect the value of individual securities in which the Fund invests. Factors such as global interest rate levels, economic growth, market conditions and political events affect the fixed income securities markets. When the value of the Fund's investments goes down, your investment in the Fund decreases in value and you could lose money.

 

·Restricted Securities Risk. The Fund may invest in privately placed and other securities or instruments exempt from SEC registration (collectively “private placements”), subject to liquidity and other regulatory restrictions. In the U.S. market, private placements are typically sold only to qualified institutional buyers, or qualified purchasers, as applicable. An insufficient number of buyers interested in purchasing private placements at a particular time could adversely affect the marketability of such investments, and the Fund might be unable to dispose of them promptly or at reasonable prices, subjecting the Fund to liquidity risk. The Fund may invest in private placements determined to be liquid as well as those determined to be illiquid. Even if determined to be liquid, the Fund’s holdings of private placements may increase the level of Fund illiquidity if eligible buyers are unable or unwilling to purchase them at a particular time. Issuers of Rule 144A eligible securities are required to furnish information to potential investors upon request. However, the required disclosure is much less extensive than that required of public companies and is not publicly available since the offering is not filed with the SEC. Further, issuers of Rule 144A eligible securities can require recipients of the offering information (such as the Fund) to agree contractually to keep the information confidential, which could also adversely affect the Fund’s ability to dispose of the security

 

·Portfolio Turnover Risk. Active trading could increase the Fund’s transaction costs (thus adversely affecting performance). The frequency of a Fund’s transactions will vary from year to year. Increased portfolio turnover may result in higher brokerage commissions, dealer mark-ups and other transaction costs and may result in taxable capital gains. Higher costs associated with increased portfolio turnover may offset gains in a Fund’s performance. The Fund’s portfolio turnover is expected to be over 100% annually, as the Fund is actively traded.
24 
 

 

Performance: The Fund is new and therefore does not have a performance history for a full calendar year. After it has operated for a full calendar year, this prospectus will provide performance information that gives some indication of the risks of an investment in the Fund by comparing the Fund’s performance with a broad measure of market performance. Updated performance information is available at no cost by visiting www.leadercapital.com or by calling (800) 711-9164.

  

Investment Advisor: Leader Capital Corp. is the Fund’s investment advisor.

 

Investment Advisor Portfolio Manager: John E. Lekas, founder of Leader Capital Corp., has been the Fund’s portfolio manager since its inception in __, 2020.

 

Purchase and Sale of Fund Shares: For Institutional Class shares, the minimum initial investment amount for an account is $2,000,000. There is no minimum for subsequent investments. For Investor Class, the minimum initial investment amount for all accounts (including IRAs) is $2,500 and the minimum subsequent investment is $100. You may purchase and redeem shares of the Fund on any day that the New York Stock Exchange is open. Redemption requests may be made in writing, by telephone, or through a financial intermediary and will be paid by ACH, check or wire transfer.

 

Tax Information: Dividends and capital gain distributions you receive from the Fund, whether you reinvest your distributions in additional Fund shares or receive them in cash, are taxable to you at either ordinary income or capital gains tax rates unless you are investing through a tax-deferred plan such as an IRA or 401(k) plan.

 

Payments to Broker-Dealers and Other Financial Intermediaries: If you purchase shares of 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 website for more information.

25 
 

 

ADDITIONAL INFORMATION ABOUT PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS

 

Investment Objectives:

 

The primary investment objective of the Leader Short Duration Bond Fund is to deliver a high level of current income, with a secondary objective of capital appreciation. The Fund’s investment objective is not fundamental and may be changed by the Board of Trustees without shareholder approval. The investment objectives, strategies and policies of the Leader Short Duration Bond Fund may be changed without the approval of the Fund’s shareholders upon 60 days’ written notice to shareholders. However, the Fund will not change its investment objective or its investment policy of investing at least 80% of its assets in fixed income securities without changing the name of the Fund and providing shareholders with at least 60 days’ advance notice in writing.

 

The investment objective of the Leader Total Return Fund is to seek income and capital appreciation to produce a high total return. The Fund’s investment objective is not fundamental, and may be changed by the Board of Trustees without shareholder approval upon 60 days’ written notice.

 

The primary investment objective of the Leader High Quality Low Duration Bond Fund is to deliver a high level of current income, with a secondary objective of capital appreciation. The investment objectives, strategies and policies of the Leader High Quality Low Duration Bond Fund may be changed without the approval of the Fund’s shareholders upon 60 days’ written notice to shareholders. However, the Fund will not change its investment policy of investing at least 80% of its net assets, plus any amount of borrowings for investment purposes, in high quality low duration debt securities without changing the name of the Fund and providing shareholders with at least 60 days’ advance notice in writing.

 

The primary investment objective of the Leader Government Bond Fund is to maximize total return consistent with income generation and prudent investment management. The Fund’s investment objective is not fundamental and may be changed by the Board of Trustees without shareholder approval. The investment objectives, strategies and policies of the Leader Government Bond Fund may be changed without the approval of the Fund’s shareholders upon 60 days’ written notice to shareholders. However, the Fund will not change its investment objective or its investment policy of investing at least 80% of its assets in government bonds without changing the name of the Fund and providing shareholders with at least 60 days’ advance notice in writing.

 

Principal Investment Strategies:

 

Leader Short Duration Bond Fund

 

The Fund expects to achieve its objectives by investing in a portfolio of investment grade debt securities and non-investment grade (also known as “junk bonds”) debt securities, both domestic and foreign, including emerging markets. Fixed income securities in which the Fund may invest include foreign and domestic bonds, notes, corporate debt, preferred securities, US and foreign government securities, domestic municipal securities, mortgage-backed and asset-backed securities and STRIPS (Separate Trading of Registered Interest and Principal of Securities, a type of zero-coupon debt instrument). The Fund’s effective average duration will normally be three years or less. The Fund also may hold cash or cash equivalents, and it may enter into repurchase agreements. The Advisor utilizes a fundamental top-down analysis, meaning the Advisor analyzes the economy, interest rate cycles, the supply and demand for credit and the characteristics of individual securities in making investment selections.

 

Under normal circumstances, the Fund will invest at least 80% of its net assets, plus any amount of borrowings for investment purposes, in fixed income securities. This policy may not be changed without at least 60 days’ advance notice to shareholders in writing. The Fund may invest up to 40% of its assets in lower-quality, high yield bonds rated B or higher by Moody’s Investors Service, Standard & Poor’s Ratings Group, Fitch Ratings, Inc. or other Nationally Recognized Statistical Rating Organization (“NRSRO”) or, if unrated by such NRSROs, determined by the Advisor to be of comparable quality. The Fund also may invest in bonds with the potential for capital appreciation by purchasing these bonds at a larger discount from par value. The Fund may invest up to 20% of its assets, determined at the time of investment, in foreign fixed income securities denominated in foreign currencies. Foreign fixed income securities may be investment grade, below investment grade or unrated. The Fund may invest in U.S. Treasury Government securities with no limit. The Fund may use options and credit default swaps to manage investment risk and liquidity.

 

The Fund may also sell equity stocks short up to 20% of the Fund’s assets. The Advisor will consider shorting the stock of issuers in which the Fund owns a position in same issuer’s convertible debt securities. In pursuing its short strategy, the Advisor seeks to tactically take advantage of the price relationship between an issuer’s stock and its convertible securities.

 

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The Fund may invest up to 20% of its assets in floating and variable-rate securities, cash, cash equivalents and fixed income securities other than as described above. The Fund may also invest in other mutual funds that primarily invest in floating rate securities, including funds that are also advised by the Advisor. By keeping some cash or cash equivalents, the Fund may avoid realizing gains and losses from selling investments when there are shareholder redemptions. However, the Fund may have difficulty meeting its investment objectives when holding a significant cash position.

 

The Advisor will consider a floating or variable-rate security to have a maturity equal to its stated maturity (or redemption date if it has been called for redemption), except that it may consider: (1) variable-rate securities to have a maturity equal to the period remaining until the next readjustment in the interest rate, unless subject to a demand feature; (2) variable-rate securities subject to a demand feature to have a remaining maturity equal to the longer of (a) the next readjustment in the interest rate or (b) the period remaining until the principal can be recovered through demand; and (3) floating-rate securities subject to a demand feature to have a maturity equal to the period remaining until the principal can be recovered through demand. Variable and floating-rate securities generally are subject to less principal fluctuation than securities without these attributes.

 

As noted above, the Fund’s effective average duration will normally be three years or less. Effective duration is a measure of a fixed income security’s average life that reflects the present value of the security’s cash flow, and accordingly, is a measure of price sensitivity to interest rate changes. Effective duration is expressed in years, like maturity, but it is a better indicator of price sensitivity than maturity because it takes into account the time value of cash flows generated over the security’s life. Future interest and principal payments are discounted to reflect their present value and then are multiplied by the number of years they will be received to produce a value expressed in years. You can estimate the effect of interest rates on a fixed income fund’s share price by multiplying the fund’s effective duration by an expected change in interest rates. For example, the share price of a fixed income fund with an effective duration of three years would be expected to fall approximately 3% if interest rates rose by one percentage point. The Advisor may sell a security if its value becomes unattractive, such as when its fundamentals deteriorate or when other investment opportunities exist that may have more attractive yields. The Advisor may engage in frequent buying and selling of securities to achieve the Fund’s investment objective.

 

Leader Total Return Fund

 

The Fund seeks to achieve its investment objective by investing primarily in domestic and foreign fixed income securities, including issuers from emerging markets, of various maturities and credit qualities that are denominated in U.S. dollars or foreign currencies. Fixed income security types include bonds, convertible debt securities, preferred securities, notes, debentures and other evidence of indebtedness issued by corporations, governments and their agencies or instrumentalities as well as mortgage-backed and asset-backed securities including collateralized loan obligations (“CLOs”).

 

Individual securities are purchased without restriction as to maturity or duration; however, the average portfolio duration normally varies within 75% to 125% of the three-year average duration of the Morningstar Core Bond Index, which as of May 31, 2019 was 5.59 years. The Fund will normally have an average portfolio duration in between 3.50 to 6.00 years. Duration is a measure of the expected life of a fixed income security that is used to determine the sensitivity of a security’s price to changes in interest rates. The longer a security’s duration, the more sensitive it will be to changes in interest rates.

 

The Fund invests primarily in investment-grade securities but may invest up to 40% of its total assets in high yield securities (commonly referred to as “junk bonds”). The Fund defines junk bonds as those rated lower than Baa3 by Moody’s Investors Service (“Moody’s”) or lower than BBB- by Standard and Poor’s Rating Group (“S&P”), or, if unrated, determined by the Advisor to be of similar credit quality. However, the Fund restricts its junk bond purchases to those rated B3 or higher by Moody’s or B- or higher by S&P, or, if unrated, determined by the Advisor to be of comparable quality. The Fund may invest in U.S. treasury government securities with no limit. Foreign issues denominated in U.S. dollars will be excluded from the 40% allocation limit.

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The Fund may also sell equity stocks short up to 20% of the Fund’s assets. The Advisor will consider shorting the stock of issuers in which the Fund owns a position in same issuer’s convertible debt securities. In pursuing its short strategy, the Advisor seeks to tactically take advantage of the price relationship between an issuer’s stock and its convertible securities.

 

The Advisor allocates Fund assets among various fixed income sectors, maturities and specific issues using an opportunistic approach by assessing risk and reward.

·Sector selection focuses on identifying portions of the fixed income market that the Advisor believes offer the highest yield or expected capital appreciation based upon both credit risk, as measured by the Moody’s, S&P and/or Fitch’s rating; and on the Advisor’s business cycle and exchange rate forecast.
·Maturity or yield curve management focuses on selecting securities with maturities that the Advisor believes have the highest yield and/or highest potential capital appreciation, when compared to securities with shorter or longer maturities.
·Security selection focuses on identifying specific securities that offer the highest yield or expected capital appreciation when compared to a peer group of securities with similar credit quality and maturity.

 

The Advisor buys securities for either or both their interest income and their potential for capital appreciation, generally resulting from decreases in interest rates, foreign currency appreciation, or improving credit fundamentals for a particular sector or security. The Advisor may sell a security if its value becomes unattractive, such as when its fundamentals deteriorate or when other investment opportunities exist that may have more attractive yields. The Advisor may engage in frequent buying and selling of securities to achieve the Fund’s investment objective.

 

Leader High Quality Low Duration Bond Fund

 

The Fund seeks to achieve its objectives by investing principally in high quality low duration debt securities. The Fund invests in floating rate debt securities with an interest rate that resets quarterly) based on the London Interbank Offered Rate (“LIBOR”). While the Fund invests without restriction as to the maturity of any single debt security, the Fund’s portfolio average effective duration (a measure of interest rate risk similar to maturity) will be one year or less. When the Fund invests in debt securities, each security must be rated no lower than the A category by Standard & Poor’s Ratings Group or no lower than the A category by Moody’s Investors Service or no lower than the A category by Fitch Ratings, Inc. If a debt security is downgraded to below an A rating, the Fund will sell such security within 30 days.

 

The Fund invests principally in floating rate US dollar denominated foreign and domestic bonds, corporate debt, bank loans, bank loan participations, commercial mortgage-backed securities (“CMBS”), residential mortgage-backed securities (“RMBS”), and collateralized loan obligations (“CLOs”) and collateralized debt obligations (“CDOs”) that are backed by domestic and foreign floating rate debt obligations, and US government securities. The Fund invests in both senior and subordinate debt tranches of CLOs, CDOs, RMBS and CMBS. Senior tranches are structured so they are first in line to receive payments from the underlying pool of loans, while subordinate tranches are lower in payment priority. Tranches rated A are typically no lower than third in payment priority and in all cases are not lowest in payment priority. The tranches receive payments from the principal and interest payments made by underlying borrowers in accordance to the rank of the tranche. Normally, CMBS, RMBS, CLOs, and CDOs have multiple tranches with investors in the bottom tranches having last priority to receive payment. By investing in A rated or better debt tranches, the Fund will not be less than third in priority for payment. The Fund allocates assets across security types without restriction, subject to the Fund’s 80% high quality low duration debt security limitation.

 

The Advisor utilizes a fundamental top-down analysis, meaning the Advisor analyzes the economy, interest rate cycles, the supply and demand for credit and the characteristics of individual securities in making investment selections for the Fund. The Fund only invests in CLO and CDO tranches that are managed by managers that the Advisor believes are above-average when compared to their peers. The Advisor selects managers it ranks as either Tier 1 or Tier 2 according to the Advisor’s proprietary ranking system; and excludes lower-rated managers. This system ranks managers based upon years of experience, performance history, and depth of staff. Each security is evaluated according to the Advisor’s investment process that not only includes an analysis of the macro-economic environment, but also evaluates each particular security’s structural nuances, credit metrics, and value relative to similar alternative securities that may be offered from time to time.

 

The Advisor may sell a security if its value becomes unattractive, such as when its fundamentals deteriorate, its credit rating is downgraded (including, as described above, sales required when a security is downgraded to below an A rating), when it determines that the underlying credit has been impaired such that a future downgrade is likely, or when other investment opportunities exist that may have more attractive yields. As a result of its trading strategy, the Fund expects to engage in frequent portfolio transactions that will likely result in higher portfolio turnover and commissions than many investment companies.

 

The Fund uses effective duration to measure interest rate risk. While the Fund invests without restriction as to the maturity of any single debt security, the Fund’s portfolio average effective duration (a measure of interest rate risk similar to maturity) will be one year or less. Effective duration is a measure of a fixed income security’s price sensitivity to interest rate changes. Effective duration is expressed in years, like maturity, but it is a better indicator of price sensitivity than maturity because it takes into account the nature of the cash flows generated over the security’s life. The Fund defines the effective duration of a floating rate security as the time remaining to its next interest rate reset.

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Leader Government Bond Fund

 

The Fund is managed by Leader Capital Corp. (the “Advisor”), and normally invests at least 80% of its net assets (including amounts borrowed for investment purposes) in government bonds, which includes securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities, such as U.S. Treasury obligations and agency-back mortgage-backed securities (“Agency MBS”). Through these investments, the Funds seeks to generate current income throughout market cycles while maximizing total return.

 

The Fund will primarily invest in investment-grade rated debt securities, which can include Agency MBS issued by U.S. Government agencies or instrumentalities, including the Government National Mortgage Association (Ginnie Mae), the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac). The Fund considers a debt security to be rated investment grade if, at the time of purchase, at least one nationally recognized rating organization has rated the security investment grade or, if unrated, the Advisor determines the security to be of comparable credit quality. The Agency MBS may be structured such that payments consist of interest-only, principal-only, or principal and interest. The Fund may also purchase these securities on a "to be announced" basis (“TBA”) and enter into dollar rolls. A TBA transaction is a method of trading mortgage-backed securities (“MBS”) where the buyer and seller agree upon general trade parameters such as agency, settlement date, par amount, and price at the time the contract is entered into but the securities are delivered in the future, generally 30 days later. The actual pools of MBS delivered in a TBA transaction typically are not determined until two days prior to settlement date. A dollar roll transaction involves a sale by the Fund of a mortgage-backed or other security concurrently with an agreement by the Fund to repurchase a similar security later at an agreed-upon price. The securities that are repurchased will bear the same interest rate and stated maturity as those sold, but pools of mortgages collateralizing those securities may have different prepayment histories than those sold.

 

The Fund may invest in privately placed debt securities that have not been registered for sale under the Securities Act of 1933, as amended (the “Securities Act”) either pursuant to Rule 144A or via other provisions of, or exemptions from, the Securities Act (each a “Restricted Security” and collectively, “Restricted Securities”). These securities are exempt from registration under the Securities Act and may be considered illiquid and therefore are subject to the Fund’s 15% limit on illiquid securities, unless deemed liquid in accordance with procedures adopted by the Board and implemented by the Advisor. Those Restricted Securities deemed liquid by the Board are excluded from the Fund’s 15% limit on illiquid securities. The Fund’s investment in Restricted Securities will be primarily in investment grade-rated Agency MBS, which benefit from superior capital structure seniority and underlying first mortgage collateral. These types of securities generally trade with more liquidity than other types of Restricted Securities that are non-investment grade. The Fund may invest in both liquid and illiquid Restricted Securities, and the categorization of a Restricted Security may change under certain market conditions or other events.

 

The Fund can invest in debt securities of any maturity or duration, but will maintain a dollar-weighted average duration of between 1 and 7 years under normal market conditions. “Duration” is a measure used to determine the sensitivity of a portfolio or security to changes in interest rates. The longer the duration of a debt security, or of the Fund’s portfolio of debt securities, the more sensitive its market price and the Fund’s value will be to changes in interest rates.

 

In managing the Fund’s portfolio, the Advisor seeks investments that it believes offer the best value relative to other comparable securities based on multiple factors, including, but not limited to, credit quality and structure, maturity, yield, credit support, and ratings information. The Advisor uses an investment process that analyzes the economy, interest rate cycles, the supply and demand for credit to identify potential investments. Next, the Adviser analyzes the characteristics of the securities in making investment selections for the Fund. The Advisor uses both hedging strategies and leverage as part of its risk-management process through this process, the Advisor seeks to maintain relatively low volatility in the net asset value (“NAV”) of the Fund’s portfolio.

 

The Advisor will seek to manage investment risk by varying the Fund’s investments, directly or indirectly, across multiple borrowers, types of securities, ratings, duration, and other factors that affect the Fund’s portfolio structure. The Fund may employ hedging strategies to manage interest rate, credit spread, and other risks. Accordingly, the Fund may invest in options, futures, and swaps (including interest rate swaps, credit default swaps, total return swaps, and other related derivative products), to the extent allowed under the 1940 Act.

 

The Fund may also utilize leverage (i.e., borrowing against a line of credit), subject to the limits of the 1940 Act. The Fund’s use of leverage will normally by through repurchase agreements. Repurchase agreements involve the Fund selling

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mortgage-backed securities to a counterparty and receiving cash in return, with the parties able to reverse the transaction in the future at a defined price. The cash the Fund receives can be used to purchase other securities in the secondary mortgage backed securities market, thereby increasing the Fund’s exposure to such securities for a fixed level of net assets. The Fund plans to engage in open maturity repurchase agreements. Open maturity repurchase agreements do not have a pre-determined repurchase date and the agreement may be terminated by the Fund or a counterparty at any time. The Fund may also purchase securities through repurchase agreements to generate more cash to then invest in other securities.

 

The Fund may sell investments if the Advisor determines that credit quality, maturity, yield, or ratings information, among other criteria, have changed materially from its initial analysis. The Fund may also sell investments for other reasons, including, but not limited to, securing gains, limiting losses, managing portfolio risk or liquidity, or if other investments offer better relative value and performance expectations, as determined by the Advisor.

 

The Fund may engage in active and frequent trading of portfolio securities to achieve its primary investment strategies.

 

Principal Investment Risks:

 

·Affiliated Fund Risk (Leader Short Duration Bond Fund). Investments in other investment companies, including an affiliated fund, are subject to investment advisory fees and other expenses, which will be indirectly paid by the Fund. As a result, the cost of investing in the Fund will be higher than the cost of investing directly in an affiliated fund and may be higher than other mutual funds that invest directly in stocks and bonds. The Advisor may receive management or other fees from an affiliated fund in which the Fund may invest. It is possible that a conflict of interest among the Fund and an affiliated fund could affect how the Advisor fulfills its fiduciary duties to the Fund and an affiliated fund.
·CLO and CDO Risk (Leader High Quality Low Duration Bond Fund). Collateral Loan Obligations (“CLOs”) and collateralized debt obligations (“CDOs”) are securities backed by an underlying portfolio of loan and debt obligations, respectively. CLOs and CDOs issue classes or “tranches” that vary in risk and yield and may experience substantial losses due to actual defaults, decrease of market value due to collateral defaults and removal of subordinate tranches, market anticipation of defaults and investor aversion to CLO and CDO securities as a class. Investments in CLO and CDO securities may be riskier and less transparent than direct investments in the underlying loans and debt obligations.

The risks of investing in CLOs and CDOs depend largely on the tranche invested in and the type of the underlying debts and loans in the tranche of the CLO or CDO, respectively, in which the Fund invests. The tranches in a CLO or CDO vary substantially in their risk profile. The senior tranches are relatively safer because they have first priority on the collateral in the event of default. As a result, the senior tranches of a CLO or CDO generally have a higher credit rating and offer lower coupon rates than the junior tranches, which offer higher coupon rates to compensate for their higher default risk. The CLOs and CDOs in which the Fund may invest may incur, or may have already incurred, debt that is senior to the Fund’s investment. CLOs and CDOs also carry risks including, but not limited to, interest rate risk and credit risk.

Investments in CLOS and CDOs may be subject to certain tax provisions that could result in the Fund incurring tax or recognizing income prior to receiving cash distributions related to such income. CLOs and CDOs that fail to comply with certain U.S. tax disclosure requirements may be subject to withholding requirements that could adversely affect cash flows and investment results. Any unrealized losses the Fund experiences with respect to its CLO and CDO investments may be an indication of future realized losses.

The senior tranches of certain CLOs and CDOs in which the Fund invests may be concentrated in a limited number of industries or borrowers, which may subject those CLOs and CDOs, and in turn the Fund, to the risk of significant loss if there is a downturn in a particular industry in which the CLO or CDO is concentrated.

The application of risk retention rules to CLOs and CDOs may affect the overall CLO and CDO market, resulting in fewer investment opportunities for the Fund.

·Collateralized Loan Obligation Risk (Leader Short Duration Bond Fund). CLOs are securities backed by an underlying portfolio of debt and loan obligations, respectively. CLOs issue classes or “tranches” that vary in risk and yield and may experience substantial losses due to actual defaults, decrease of market value due to collateral defaults and removal of subordinate tranches, market anticipation of defaults and investor aversion to CLO securities as a class. The risks of investing in CLOs depend largely on the tranche invested in and the type of the underlying debts and loans in the tranche of the CLO, respectively, in which the Fund invests. CLOs also carry risks including, but not limited to, interest rate risk and credit risk.
·Counterparty Risk (Leader Government Bond Fund). Counterparty risk is the risk that a counterparty to a transaction in a financial instrument held by the Fund or by a special purpose or structured vehicle invested in by the Fund may become insolvent or otherwise fail to perform its obligations. As a result of such insolvency or failure to perform, the Fund may obtain no or limited recovery of its investment, and any recovery may be significantly delayed.
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·Convertible Debt Securities Risk (Leader Short Duration Bond Fund and Leader Total Return Fund). Convertible debt securities subject the Fund to the risks associated with both fixed-income securities and equity securities. If a convertible debt security’s investment value is greater than its conversion value, its price will likely increase when interest rates fall and decrease when interest rates rise. If the conversion value exceeds the investment value, the price of the convertible security will tend to fluctuate directly with the price of the underlying equity security.
·Credit Default Swap Risk (Leader Short Duration Bond Fund). Credit default swaps (“CDS”) are typically two-party financial contracts that transfer credit exposure between the two parties. Under a typical CDS, one party (the “seller”) receives pre-determined periodic payments from the other party (the “buyer”). The seller agrees to make compensating specific payments to the buyer if a negative credit event occurs, such as the bankruptcy or default by the issuer of the underlying debt instrument. The use of CDS involves investment techniques and risks different from those associated with ordinary portfolio security transactions, such as potentially heightened counterparty, concentration and exposure risks.
·Credit Risk (All Funds). The issuer of a fixed income security may not be able to make interest or principal payments when due. Generally, the lower the credit rating of a security, the greater the risk is that the issuer will default on its obligation. Credit risks associated with Auction Rate Securities (“ARS”) mirror those of other bond issues in terms of default risk associated with the issuers. Because ARS do not carry a put feature allowing the bondholder to require the purchase of the bonds by the issuer or a third party, they are very sensitive to changes in credit ratings and normally require the highest ratings (e.g., AAA/Aaa) to make them marketable.
·Credit Risk (Leader Total Return Fund). There is a risk that issuers will not make payments on securities held by the Fund, resulting in losses to the Fund. In addition, the credit quality of securities held by the Fund may be lowered if an issuer’s financial condition changes. Lower credit quality may lead to greater volatility in the price of a security and in shares of the Fund. Lower credit quality also may affect liquidity and make it difficult for the Fund to sell the security. The Fund may invest, directly or indirectly, in “junk bonds.” High yield fixed-income securities (also known as “junk bonds”) are considered speculative with respect to the issuer’s capacity to pay interest and repay principal in accordance with the terms of the obligations. This means that, compared to issuers of higher rated securities, issuers of medium and lower rated securities are less likely to have the capacity to pay interest and repay principal when due in the event of adverse business, financial or economic conditions and/or may be in default or not current in the payment of interest or principal. The market values of medium- and lower-rated securities tend to be more sensitive to company-specific developments and changes in economic conditions than higher-rated securities. The companies that issue these securities often are highly leveraged, and their ability to service their debt obligations during an economic downturn or periods of rising interest rates may be impaired. In addition, these companies may not have access to more traditional methods of financing, and may be unable to repay debt at maturity by refinancing. The risk of loss due to default in payment of interest or principal by these issuers is significantly greater than with higher-rated securities because medium- and lower-rated securities generally are unsecured and subordinated to senior debt. Default, or the market’s perception that an issuer is likely to default, could reduce the value and liquidity of securities held by the Fund, thereby reducing the value of your investment in Fund shares. In addition, default may cause the Fund to incur expenses in seeking recovery of principal or interest on its portfolio holdings.
·Currency Risk. (Leader Short Duration Bond Fund and Leader Total Return Fund). Foreign currency investing through non-U.S. dollar denominated investments involves significant risks, including market risk, interest rate risk, country risk, counterparty credit risk and short sale risk. Market risk results from the price movement of foreign currency values in response to shifting market supply and demand. Since exchange rate changes can readily move in one direction, a currency position carried overnight or over a number of days may involve greater risk than one carried a few minutes or hours. Interest rate risk arises whenever a country changes its stated interest rate target associated with its currency. Country risk arises because virtually every country has interfered with international transactions in its currency. Interference has taken the form of regulation of the local exchange market, restrictions on foreign investment by residents or limits on inflows of investment funds from abroad. Restrictions on the exchange market or on international transactions are intended to affect the level or movement of the exchange rate. This risk could include the country issuing a new currency, effectively making the “old” currency worthless.
·Derivatives Risk (Leader Short Duration Bond Fund and Leader Government Bond Fund). When writing put and call options, the Fund is exposed to declines in the value of the underlying asset against which the option was written. To the extent required, the Fund will cover the financial exposure created by writing put and call options either by purchasing or selling offsetting options or futures or designating liquid assets to cover such financial exposure. When purchasing options, the Fund is exposed to the potential loss of the option purchase price. Derivatives may be illiquid and the market for derivatives is largely unregulated. The use of derivatives may not always be a successful strategy and using them could lower the Fund’s return.
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·Distribution Risk (Leader High Quality Low Duration Bond Fund). There is a risk that shareholders may not receive distributions from the Fund or that such distributions may be reduced over time, including on a per share basis. The Fund may have difficulty paying out distributions if income from its investments is recognized before or without receiving cash representing such income.

·Dollar Rolls Risk (Leader Government Bond Fund). Dollar rolls involve the risk that the market value of the securities that the Fund is committed to buy may decline below the price of the securities the Fund has sold. These transactions may involve leverage.
·Emerging Markets Risk (Leader Short Duration Bond Fund, Leader Total Return Fund, and Leader High Quality Low Duration Bond Fund). The Fund may invest in countries with newly organized or less developed securities markets. Generally, economic structures in these countries are less diverse and mature than those in developed countries and their political systems tend to be less stable. Emerging market economies may be based on only a few industries, therefore security issuers, including governments, may be more susceptible to economic weakness and more likely to default. Emerging market countries also may have relatively unstable governments, weaker economies, and less-developed legal systems with fewer security holder rights.
·Extension Risk (Leader Government Bond Fund). When interest rates rise, certain obligations will be paid off by the obligor more slowly than anticipated, causing the value of these obligations to fall. Rising interest rates tend to extend the duration of securities, making them more sensitive to changes in interest rates. The value of longer-term securities generally changes more in response to changes in interest rates than shorter-term securities. As a result, in a period of rising interest rates, securities may exhibit additional volatility and may lose value.
·Foreign Risk (Leader Short Duration Bond Fund, Leader Total Return Fund, and Leader High Quality Low Duration Bond Fund). The Fund could be subject to greater risks because the Fund’s performance may depend on factors other than the performance of securities of U.S. issuers. Changes in foreign economies and political climates are more likely to affect the Fund than a mutual fund that invests exclusively in U.S. dollars and U.S. Issuers. The value of foreign currency denominated securities or foreign currency contracts is also affected by the value of the local currency relative to the U.S. dollar. There may also be less government supervision of foreign markets, resulting in non-uniform accounting practices and less publicly available information about issuers of foreign currency denominated securities. The value of foreign investments, including foreign currency denominated investments, may be affected by changes in exchange control regulations, application of foreign tax laws (including withholding tax), changes in governmental administration or economic or monetary policy (in this country or abroad) or changed circumstances in dealings between nations. In addition, foreign brokerage commissions, custody fees and other costs of investing in foreign securities are generally higher than in the United States. Investments in foreign issuers, whether denominated in U.S. dollars or foreign currencies, could be affected by other factors that do not exist in the United States, including expropriation, armed conflict, confiscatory taxation, and potential difficulties in enforcing contractual obligations. The withdrawal of the United Kingdom from the European Union (so-called Brexit) may create greater economic uncertainty for European debt issuers and negatively impact their credit quality.
·Futures Risk (Leader Government Bond Fund). The loss that may be incurred in futures contracts may exceed the amount of the premium paid and may be potentially unlimited. Futures markets are highly volatile and the use of futures may increase the volatility of the Fund’s NAV. Additionally, because of the low collateral deposits normally involved in futures trading, a relatively small price movement in a futures contract may result in substantial losses to the Fund. Futures contracts may be illiquid. Furthermore, exchanges may limit fluctuations in futures contract prices during a trading session by imposing a maximum permissible price movement on each futures contract. The Fund may be disadvantaged if it is prohibited from executing a trade outside the daily permissible price movement on each futures contract. Futures transactions involve additional risks, including counterparty risk, hedging risk, and pricing risk.
·Government Securities Risk (All Funds). It is possible that the U.S. Government would not provide financial support to its agencies or instrumentalities if it is not required to do so by law. If a U.S. Government agency or instrumentality in which the Fund invests defaults and the U.S. Government does not stand behind the obligation, the Fund’s share price or yield could fall. Securities of U.S. Government sponsored entities, such as Freddie Mac or Fannie Mae, are neither issued nor guaranteed by the U.S. Government. The U.S. Government’s guarantee of ultimate payment of principal and timely payment of interest of the U.S. Government securities owned by the Fund does not imply that the Fund’s shares are guaranteed by the Federal Deposit Insurance Corporation or any other government agency, or that the price of the Fund’s shares will not fluctuate.

 

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·Hedging Transactions Risk (Leader Government Bond Fund). The success of any hedging strategy utilized by the Fund will be subject to the Advisor’s ability to correctly assess the degree of correlation between the performance of the instruments used in the hedging strategy and the performance of the investments in the portfolio being hedged, and its ability to continually recalculate, readjust, and execute hedges in an efficient and timely manner. Therefore, a hedging strategy used by the Fund may not work as intended. In addition, it is not possible to hedge fully or perfectly against any risk, and hedging entails its own costs (such as trading commissions and fees).
·High-Yield Bond Risk (Leader Short Duration Bond Fund and Leader Total Return Fund). Lower-quality bonds, known as high-yield bonds or “junk bonds,” present a significant risk for loss of principal and interest. These bonds offer the potential for higher return, but also involve greater risk than bonds of higher quality, including an increased possibility that the bond’s issuer, obligor or guarantor may not be able to make its payments of interest and principal (credit quality risk). If that happens, the value of the bond may decrease, and the Fund’s share price may decrease and its income distribution may be reduced. An economic downturn or period of rising interest rates (interest rate risk) could adversely affect the market for these bonds and reduce the Fund’s ability to sell its bonds (liquidity risk). The lack of a liquid market for these bonds could decrease the Fund’s share price. The ability of governments to repay their obligations is adversely impacted by default, insolvency, bankruptcy or by political instability, including authoritarian and/or military involvement in governmental decision-making, armed conflict, civil war, social instability and the impact of these events and circumstances on a country’s economy and its government’s revenues. Therefore, government bonds can present a significant risk. Governments may also repudiate their debts in spite of their ability to pay. The Fund’s ability to recover from a defaulting government is limited because that same government may block access to court-mandated legal remedies or other means of recovery
·Interest Only Securities Risk (All Funds). Certain securities, called “interest only securities” involve greater uncertainty regarding the return on investment. An interest only security is not entitled to any principal payments. If the mortgage assets in a pool prepay or default at rapid rates, it may reduce the amount of interest available to pay a related interest only security and may cause an investor in that interest only security to fail to recover the investor’s initial investment.
·Interest Rate Risk (All Funds). The value of the Fund may fluctuate based on changes in interest rates and market conditions. As interest rates rise, the value of income producing instruments may decrease. This risk increases as the term of the note increases. Income earned on floating- or variable-rate securities will vary as interest rates decrease or increase. However, the interest rates on variable-rate securities, as well as certain floating-rate securities whose interest rates are reset only periodically, can fluctuate in value as a result of interest rate changes when there is an imperfect correlation between the interest rates on the securities and prevailing market interest rates.
·Issuer-Specific Risk (Leader Short Duration Bond Fund and Leader Total Return Fund). The value of a specific security can be more volatile than the market as a whole and can perform differently from the value of the market as a whole.
·Legislative Change Risk (Leader Short Duration Bond Fund). Municipal securities are subject to the risk that legislative changes and local and business developments may adversely affect the yield or value of the Fund’s investments in such securities.
·Leverage Risk (Leader Government Bond Fund). Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage.
·Liquidity Risk (All Funds). Liquidity risk is the risk that a security cannot be sold or replaced quickly at or very close to its market value. The Fund’s ability to sell a position in a security prior to maturity depends, in part, on the existence of a liquid secondary market for such a security. Some securities may have few market-makers and low trading volume, which tends to increase transaction costs and may make it difficult for the Fund to dispose of a security at all or at a price which represents current or fair market value.
·Loan and Loan Participation Risk (Leader High Quality Low Duration Bond Fund). The secondary market for loans and loan participations is a private, unregulated inter-dealer or inter-bank resale market. Purchases and sales of loans and loan participations are generally subject to contractual restrictions that must be satisfied before a loan or loan participation can be bought or sold. These restrictions may impede the Fund’s ability to buy or sell loans and loan participations and may negatively impact the transaction price. It may take longer than seven days for transactions in loans to settle. The Fund may hold cash, sell investments or temporarily borrow from banks or other lenders to meet short-term liquidity needs due to the extended loan settlement process, such as to satisfy redemption requests from Fund shareholders. Loans and loan participations may be unsecured which means that they are not collateralized by any specific assets of the borrower.
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U.S. federal securities laws afford certain protections against fraud and misrepresentation in connection with the offering or sale of a security, as well as against manipulation of trading markets for securities. The typical practice of a lender in relying exclusively or primarily on reports from the borrower may involve the risk of fraud, misrepresentation, or market manipulation by the borrower. It is unclear whether U.S. federal securities law protections are available to an investment in a loan. In certain circumstances, loans may not be deemed to be securities, and in the event of fraud or misrepresentation by a borrower, lenders may not have the protection of the anti-fraud provisions of the federal securities laws. However, contractual provisions in the loan documents may offer some protections, and lenders may also avail themselves of common-law fraud protections under applicable state law. Loan participations are indirectly subject to default risk of the bank granting the participation. Such a default will likely delay the Fund’s access to the cash flows from underlying loan.

·Management Risk (All Funds). he strategy used by the Advisor may fail to produce the intended results. The ability of the Fund to meet its investment objectives is directly related to the Advisor’s investment strategies for the Fund. Your investment in the Fund varies with the effectiveness of the Advisor’s research, analysis and asset allocation among portfolio securities. The Advisor’s judgments about the attractiveness, value and potential appreciation of particular security in which the Fund invests may prove to be incorrect and may not produce the desired results. If the Advisor’s investment strategies do not produce the expected results, your investment could be diminished or even lost. The Fund’s board of trustees may change Fund operating policies and strategies without prior notice or shareholder approval, the effects of which may be adverse.
·Market Risk (All Funds). Overall fixed income market risks may affect the value of individual securities in which the Fund invests. Factors such as global interest rate levels, economic growth, market conditions and political events affect the fixed income securities markets. When the value of the Fund’s investments goes down, your investment in the Fund decreases in value and you could lose money. The net asset value of the Fund will fluctuate based on changes in the value of the securities in which the Fund invests. The Fund invests in securities which may be more volatile and carry more risk than some other forms of investment. The price of securities fall because of economic or political changes. Security prices in general may decline over short or even extended periods of time. Market prices of securities and broad market segments may be adversely affected by a prominent issuer having experienced losses or by the lack of earnings or such an issuer’s failure to meet the market’s expectations with respect to new products or services, or even by factors wholly unrelated to the value or condition of the issuer, such as changes in economic growth rates.
·Mortgage-Backed and Asset-Backed Securities Risk (Leader Short Duration Bond Fund and Leader Total Return Fund). Mortgage-Backed (“MBS”) and asset-backed securities (“ABS”) are subject to certain additional risks. The default rate on underlying mortgage loans or asset loans may be higher than anticipated, potentially reducing payments to the Fund. Default rates are sensitive to overall economic conditions such as unemployment, wage levels and economic growth rates. MBS are susceptible maturity risk because issuers of securities held by the Fund are able to prepay principal due on these securities, particularly during periods of declining interest rates. Securities subject to prepayment risk generally offer less potential for gains when interest rates decline, and may offer a greater potential for loss when interest rates rise. When interest rates decline, borrowers may pay off their mortgages sooner than expected. This can reduce the returns of the Fund because the Fund may have to reinvest that money at the lower prevailing interest rates. Prepayment risk as well as the risk that the structure of certain MBS may make their reaction to interest rates and other factors difficult to predict, making their prices volatile. Generally, rising interest rates tend to be associated with longer MBS maturities because borrower prepayment rates tend to decline when rates rise. As a result, in a period of rising interest rates, MBS exhibit additional volatility, known as extension risk. ABS are also subject to maturity risk, although to a much smaller degree.
·Mortgage-Backed Securities Risk (Leader High Quality Low Duration Bond Fund). When the Fund invests in MBS and CMBS, the Fund is subject to the risk that, if the underlying borrowers fail to pay interest or repay principal, the assets backing these securities may not be sufficient to support payments on the securities. Prepayment risk is associated with mortgage-backed securities. If interest rates rise, there may be fewer prepayments, which would cause the average bond maturity to rise, increasing the potential for the Fund to lose money. Rising rates may also make it more difficult for borrowers to repay floating rate loans. The value of these securities may be significantly affected by changes in interest rates, the market’s perception of issuers, and the creditworthiness of the parties involved. The ability of the Fund to successfully utilize these instruments may depend on the ability of the Fund’s Advisor to forecast interest rates and other economic factors correctly. RMBS default rates tend to be sensitive to these conditions and to home prices. CMBS default rates tend to be sensitive to overall economic conditions and to localized commercial property vacancy rates and prices. Mortgage-backed securities and other securities issued by participants in housing and commercial real estate finance, as well as other real estate-related markets have experienced significant weakness and volatility in recent years. Possible legislation in the area of residential mortgages loans that may collateralize the securities in which the Fund may invest could negatively impact the value of the Fund’s investments. Any unrealized losses the Fund experiences with respect to its RMBS and CMBS investments may be an indication of future realized losses.
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The value of CMBS is affected by: (i) changes in general economic and market conditions; (ii) changes in the value of real estate properties; (iii) risks related to local economic conditions, overbuilding and increased competition; (iv) increases in property taxes and operating expenses; (v) changes in zoning laws; (vi) casualty and condemnation losses; (vii) variations in rental income, neighborhood values or the appeal of property to tenants; (viii) and the availability of financing. RMBS are subject to prepayment risk and extension risk. If interest rates rise, there may be fewer prepayments, which would cause an RMBS’s average maturity to rise, increasing the potential for the Fund to lose money. If interest rates fall, there may be faster prepayments, which would cause an RMBS’s average maturity to decline, increasing the risk that the Fund will have reinvest prepayment proceeds at lower interest rates.

Mortgage-backed securities issued or guaranteed by private issuers are also known as “non-agency MBS”. Non-agency MBS generally offer a higher rate of interest (but greater credit risk) than securities issued by the U.S. government, and the market for non-agency MBS is smaller and less liquid than the market for government issued MBS.

 

·Mortgage-Backed Securities Risk (Leader Government Bond Fund). Mortgage-backed securities represent interests in “pools” of assets. These securities are subject to credit risk, interest rate risk, “prepayment risk” (the risk that borrowers will repay a loan more quickly in periods of falling interest rates) and “extension risk” (the risk that borrowers will repay a loan more slowly in periods of rising interest rates). The value of these securities will be influenced by factors affecting the assets underlying such securities.

 

If the Fund invests in mortgage-backed securities that are subordinated to other interests in the same asset pool, the Fund may only receive payments after the pool’s obligations to other investors have been satisfied. During periods of difficult or frozen credit markets, such securities may decline in value, face valuation difficulties, become more volatile and/or become illiquid. An unexpectedly high rate of defaults on the mortgages held by a mortgage pool may limit substantially the pool’s ability to make payments of principal or interest to the Fund, reducing the values of those securities or in some cases rendering them worthless.

·Municipal Securities Risk. The value of municipal bonds that depend on a specific revenue source or general revenue source to fund their payment obligations may fluctuate as a result of changes in the cash flows generated by the revenue source(s) or changes in the priority of the municipal obligation to receive the cash flows generated by the revenue source(s). In addition, changes in federal tax laws or the activity of an issuer may adversely affect the tax-exempt status of municipal bonds. Investments in inverse floating rate securities typically involve greater risk than investments in municipal bonds of comparable maturity and credit quality and their values are more volatile than municipal bonds due to the leverage they entail.
·Options Risk (Leader Government Bond Fund). Options trading is a highly specialized activity that involves unique investment techniques and risks. The value of options can be highly volatile, and their use can result in loss if the Advisor is incorrect in its expectation of price fluctuations. Options are subject to correlation risk because there may be an imperfect correlation between the options and the underlying asset that cause a given transaction to fail to achieve its objectives. The successful use of options depends on the Advisor’s ability to correctly predict future price fluctuations and the degree of correlation between the options and such assets. Options are also particularly subject to leverage risk and can be subject to liquidity risk.
·Portfolio Turnover Risk (All Funds). The frequency of a Fund’s transactions will vary from year to year. Increased portfolio turnover may result in higher brokerage commissions, dealer mark-ups and other transaction costs and may result in taxable capital gains. Higher costs associated with increased portfolio turnover may offset gains in the Fund’s performance. Turnover increased as the Fund made strategic changes to portfolio allocation to take advantage of the changing interest rate landscape and to address an increase in capital share activity. The Fund’s portfolio turnover is expected to be over 100% annually, as the Fund’s holdings are frequently traded.
·Preferred Security Risk. The value of preferred securities will fluctuate with changes in interest rates. Typically, a rise in interest rates causes a decline in the value of preferred stock. Preferred securities are also subject to credit risk, which is the possibility that an issuer of preferred stock will fail to make its dividend payments.
·Prepayment Risk (Leader Government Bond Fund). The issuer of certain securities may repay principal in advance, especially when yields fall. Changes in the rate at which prepayments occur can affect the return on investment of these securities. When debt obligations are prepaid or when securities are called, the Fund may have to reinvest in securities with a lower yield. The Fund also may fail to recover additional amounts (i.e., premiums) paid for securities with higher coupons, resulting in an unexpected capital loss.
·Regulatory Risk (Leader High Quality Low Duration Bond Fund). Changes in laws or regulations governing the Fund’s operations may adversely affect the Fund or cause an alteration in the Fund’s strategy. The SEC has raised questions regarding certain non-traditional investments, including CLOs.
·Repurchase Agreement Risk (Leader Short Duration Bond Fund and Leader Government Bond Fund). The
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Fund may enter into repurchase agreements in which it purchases a security (known as the “underlying security”) from a securities dealer or bank. In the event of a bankruptcy or other default by the seller of a repurchase agreement, the Fund could experience delays in liquidating the underlying security and losses in the event of a decline in the value of the underlying security while the Fund is seeking to enforce its rights under the repurchase agreement.

·Restricted Securities Risk (Leader Government Bond Fund). The Fund may invest in privately placed and other securities or instruments exempt from SEC registration (collectively “private placements”), subject to liquidity and other regulatory restrictions. In the U.S. market, private placements are typically sold only to qualified institutional buyers, or qualified purchasers, as applicable. An insufficient number of buyers interested in purchasing private placements at a particular time could adversely affect the marketability of such investments, and the Fund might be unable to dispose of them promptly or at reasonable prices, subjecting the Fund to liquidity risk. The Fund may invest in private placements determined to be liquid as well as those determined to be illiquid. Even if determined to be liquid, the Fund’s holdings of private placements may increase the level of Fund illiquidity if eligible buyers are unable or unwilling to purchase them at a particular time. Issuers of Rule 144A eligible securities are required to furnish information to potential investors upon request. However, the required disclosure is much less extensive than that required of public companies and is not publicly available since the offering is not filed with the SEC. Further, issuers of Rule 144A eligible securities can require recipients of the offering information (such as the Fund) to agree contractually to keep the information confidential, which could also adversely affect the Fund’s ability to dispose of the security
·Short Sale Risk (Leader Short Duration Bond Fund and Leader Total Return Fund). If a security or other instrument sold short increases in price, the Fund may have to cover its short position at a higher price than the short sale price, resulting in a loss. The Fund may have substantial short security positions and must borrow those securities to make delivery to the buyer. The Fund may not be able to borrow a security that it needs to deliver or it may not be able to close out a short position at an acceptable price and may have to sell related long positions before it had intended to do so. Thus, the Fund may not be able to successfully implement its short sale strategy due to limited availability of desired securities or for other reasons. The Fund may not achieve the desired result of risk mitigation in the implementation of the short sale strategy.

The Fund also may be required to pay a commission and other transactional and ongoing costs, which would increase the cost of the security sold short. The amount of any gain will be decreased, and the amount of any loss increased, by the amount of the commission, dividends, interest or expenses the Fund may be required to pay in connection with the short sale.

Until the Fund replaces a borrowed security, it is required to maintain a segregated account of cash or liquid assets with a broker or custodian to cover the Fund’s short position. Generally, securities held in a segregated account cannot be sold unless they are replaced with other liquid assets. The Fund’s ability to access the pledged collateral may also be impaired in the event the broker fails to comply with the terms of the contract. In such instances the Fund may not be able to substitute or sell the pledged collateral. Additionally, the Fund must maintain sufficient liquid assets (less any additional collateral pledged to the broker), marked-to-market daily, to cover the short sale obligations. This may limit the Fund’s investment flexibility, as well as its ability to meet redemption requests or other current obligations. The timing of redemption requests may require unfavorable timing of the disposal of a short position which may impact the Fund’s return.

The Fund also may be required to pay a commission and other transactional and ongoing costs, which would increase the cost of the security sold short. The amount of any gain will be decreased, and the amount of any loss increased, by the amount of the commission, dividends, interest or expenses the Fund may be required to pay in connection with the short sale.

Until the Fund replaces a borrowed security, it is required to maintain a segregated account of cash or liquid assets with a broker or custodian to cover the Fund’s short position. Generally, securities held in a segregated account cannot be sold unless they are replaced with other liquid assets. The Fund’s ability to access the pledged collateral may also be impaired in the event the broker fails to comply with the terms of the contract. In such instances, the Fund may not be able to substitute or sell the pledged collateral. Additionally, the Fund must maintain sufficient liquid assets (less any additional collateral pledged to the broker), marked-to-market daily, to cover the short sale obligations. This may limit the Fund’s investment flexibility, as well as its ability to meet redemption requests or other current obligations. The timing of redemption requests may require unfavorable timing of the disposal of a short position which may impact the Fund’s return.

·STRIPS Risk. STRIPS are a type of zero-coupon bond. Zero coupon bonds do not make periodic interest payments. Instead, they are sold at a discount from their face value and can be redeemed at face value when they mature. The market value of a zero-coupon bond is generally more volatile than the market value of other fixed income securities with similar maturities that make periodic interest payments. Zero coupon bonds may also respond to changes in interest rates to a greater degree than other fixed income securities with similar maturities and credit quality.
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·Stripped Mortgage-Backed Securities Risk (Leader Government Bond Fund). Stripped mortgage-backed securities, including those structured as interest-only and principal-only, are more volatile and may be more sensitive to the rate of prepayments than other mortgage-related securities. The structure of some of these securities may be complex and there may be less available information than other types of debt securities.

 

Stripped mortgage-backed securities are a type of mortgage-backed security that receive differing proportions of the interest and principal payments from the underlying assets. Generally, there are two classes of stripped mortgage-backed securities: Interest Only (“IO”) and Principal Only (“PO”). IOs entitle the holder to receive distributions consisting of all or a portion of the interest on the underlying pool of mortgage loans or mortgage-backed securities. POs entitle the holder to receive distributions consisting of all or a portion of the principal of the underlying pool of mortgage loans or mortgage-backed securities. The cash flows and yields on IOs and POs are extremely sensitive to the rate of principal payments (including prepayments) on the underlying mortgage loans or mortgage-backed securities. A rapid rate of principal payments may adversely affect the yield to maturity of IOs. A slow rate of principal payments may adversely affect the yield to maturity of POs. If prepayments of principal are greater than anticipated, an investor in IOs may incur substantial losses. If prepayments of principal are slower than anticipated, the yield on a PO will be affected more severely than would be the case with a traditional mortgage-backed security.

·Swap Agreement Risk (Leader Government Bond Fund). Swap agreements can be either bilateral agreements traded over the counter or exchange-traded agreements. The Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a counterparty. Swap agreements may be illiquid and therefore may increase the Fund’s exposure to the credit risk of each counterparty.
·Tax Risk (Leader Government Bond Fund). The Federal income tax treatment of a derivative may not be as favorable as a direct investment in an underlying asset and may adversely affect the timing, character and amount of income the Fund realizes from its investments. As a result, a larger portion of the Fund’s distributions may be treated as ordinary income rather than capital gains. In addition, certain derivatives are subject to mark-to-market or straddle provisions of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). If such provisions are applicable, there could be an increase (or decrease) in the amount of taxable dividends paid by the Fund. In addition, the tax treatment of certain derivatives, such as swaps, is unsettled and may be subject to future legislation, regulation or administrative pronouncements issued by the Internal Revenue Ser vice (the “IRS”).
·To Be Announced Transactions Risk (Leader Government Bond Fund). TBA investments include when-issued and delayed delivery securities and forward commitments. TBA transactions involve the risk that the security the Fund buys will lose value prior to its delivery. The Fund is subject to this risk whether the Fund takes delivery of the securities on the settlement date for a transaction. There also is the risk that the security will not be issued or that the other party to the transaction will not meet its obligation. If this occurs, the Fund loses both the investment opportunity for the assets it set aside to pay for the security and any gain in the security’s price. The Fund may also take a short position in a TBA investment when it owns or has the right to obtain, at no added cost, identical securities. If the Fund takes such a short position, it may reduce the risk of a loss if the price of the securities declines in the future, but will lose the opportunity to profit if the price rises.
·Variable and Floating Rate Securities Risk Leader Short Duration Bond Fund). Variable and floating rate securities may decline in value if market interest rates or interest rates paid by them do not move as expected. Conversely, variable and floating rate securities will not generally rise in value if market interest rates decline. Variable and floating rate securities may be subject to greater liquidity risk than other debt securities, meaning that there may be limitations on the Fund’s ability to sell the securities at any given time. Certain variable and floating rate securities have an interest rate floor feature, which prevents the interest rate payable by the security from dropping below a specified level as compared to a reference interest rate (the “reference rate”), such as LIBOR. Such a floor protects the Fund from losses resulting from a decrease in the reference rate below the specified level. However, if the reference rate is below the floor, there will be a lag between a rise in the reference rate and a rise in the interest rate payable by the security, and the Fund may not benefit from increasing interest rates for a significant period of time.

 

Temporary Investments: To respond to adverse market, economic, political or other conditions, each Fund may invest 100% of its total assets, without limitation, in high-quality short-term debt securities and money market instruments. These short-term debt securities and money market instruments include: shares of money market mutual funds, commercial paper, certificates of deposit, bankers’ acceptances, U.S. Government securities and repurchase agreements. While a Fund is in a defensive position, it may not achieve its investment objective. Furthermore, to the extent that a Fund invests in money market mutual funds for cash positions, there will be some duplication of expenses because a Fund pays its pro-rata portion of such money market funds’ advisory fees and operational fees. Each Fund may also invest a substantial portion of its

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assets in such instruments at any time to maintain liquidity or pending selection of investments in accordance with its policies.

 

Portfolio Holdings Disclosure: A description of the Funds’ policies regarding the release of portfolio holdings information is available in the Funds’ Statement of Additional Information. Each Fund will post a complete list of its portfolio holdings as of the last day of each fiscal quarter or semi-annual period within 60 days following the end of such period on its website at www.leadercapital.com. Each Fund’s portfolio holdings will remain available on its website at least until the next quarterly update. Shareholders may request portfolio holdings schedules at no charge by calling 1-800-711-9164.

 

Cybersecurity: The computer systems, networks and devices used by the Funds and their service providers to carry out routine business operations employ a variety of protections designed to prevent damage or interruption from computer viruses, network failures, computer and telecommunication failures, infiltration by unauthorized persons and security breaches. Despite the various protections utilized by the Funds and their service providers, systems, networks, or devices potentially can be breached. The Funds and their shareholders could be negatively impacted as a result of a cybersecurity breach.

 

Cybersecurity breaches can include unauthorized access to systems, networks, or devices; infection from computer viruses or other malicious software code; and attacks that shut down, disable, slow, or otherwise disrupt operations, business processes, or website access or functionality. Cybersecurity breaches may cause disruptions and impact a Fund’s business operations, potentially resulting in financial losses; interference with the Fund’s ability to calculate their NAV; impediments to trading; the inability of a Fund, the Advisor, and other service providers to transact business; violations of applicable privacy and other laws; regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, or additional compliance costs; as well as the inadvertent release of confidential information.

 

Similar adverse consequences could result from cybersecurity breaches affecting issuers of securities in which the Funds invest; counterparties with which the Funds engage in transactions; governmental and other regulatory authorities; exchange and other financial market operators, banks, brokers, dealers, insurance companies, and other financial institutions (including financial intermediaries and service providers for a Fund’s shareholders); and other parties. In addition, substantial costs may be incurred by these entities in order to prevent any cybersecurity breaches in the future.

 

MANAGEMENT

 

Investment Advisor: Leader Capital Corp., 315 W. Mill Plain Blvd., Suite 204, Vancouver, WA 98660, serves as investment advisor to all Funds. John E. Lekas is the President of the Advisor, which he founded in 1997. The Advisor implements each Fund’s overall investment strategies, identifies securities for investment, determines when securities should be purchased or sold, selects brokers or dealers to execute transactions for each Fund’s portfolio and votes any proxies solicited by portfolio companies. As of December 31, 2019, the Advisor had approximately $294 million in assets under management.

 

Pursuant to an advisory agreement between the Leader Funds Trust (the “Trust”), on behalf of the Funds, and Leader Capital Corp., the Advisor is entitled to receive, on a monthly basis, an annual advisory fee equal to 0.75% on the first $1.25 billion of the average daily net assets and then 0.70% on assets greater than $1.25 billion of the Leader Short Duration Bond Fund, 0.75% of the average daily net assets of the Leader Total Return Fund, and 0.65% of the average daily net assets of the Leader High Quality Low Duration Bond Fund and Leader Government Bond Fund. For the fiscal year ended May 31, 2019, the Predecessor Short Duration Fund paid an investment advisory fee to the Advisor at an annual rate of 0.73% the average daily net assets of the Predecessor Short Duration Fund. For the fiscal year ended May 31, 2019, the Predecessor Total Return Fund paid an investment advisory fee to the Advisor at an annual rate of 0.75% the average daily net assets of the Predecessor Total Return Fund. For the fiscal year ended May 31, 2019, the Predecessor High Quality Low Duration Bond Fund accrued an investment advisory fee at an annual rate of 0.44% the average daily net assets of the Predecessor High Quality Low Duration Bond Fund.

 

The Advisor has contractually agreed to waive its fee with regard to the Leader High Quality Low Duration Bond Fund and Leader Government Bond Fund, and reimburse each Fund’s expenses so that the total annual operating expenses of the Fund (excluding any front-end or contingent deferred loads, brokerage fees and commissions, 12b-1 fees, Acquired Fund Fees and Expenses, borrowing costs (such as interest and dividend expense on securities sold short), taxes or extraordinary expenses, such as litigation) do not exceed:

·1.00% for the Leader High Quality Low Duration Bond Fund and
·[___%] for the Leader Government Bond Fund

of the average daily net assets attributable to the Fund’s Investor Class and Institutional Class, through September 30, 2020. Any expense waivers and reimbursements made by the Advisor 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 does not exceed both: (1) the expense cap in effect at the time of waiver/reimbursement; and (2) the expense cap in effect at the time of recoupment, if applicable. The expense limitation agreement may be terminated only by the Fund’s Board of Trustees, on 60 days written notice to the Advisor.

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The Advisor (not the Fund) may pay certain financial institutions (which may include banks, credit unions, brokers, securities dealers and other industry professionals) a fee for providing distribution-related services and/or for performing certain administrative servicing functions for Fund shareholders, to the extent these institutions are allowed to do so by applicable statute, rule or regulation. A discussion regarding the basis for the Board of Trustees’ approval of the advisory agreements for Leader Short Duration Bond Fund, Leader Total Return Fund and Leader High Quality Low Duration Bond Fund is included in the Funds’ annual report dated May 31, 2019. A discussion regarding the basis for the Board of Trustees’ approval of the advisory agreement for the Leader Government Bond Fund will be included in the Funds’ annual report dated May 31, 2020.

 

Investment Advisor Portfolio Manager: John E. Lekas serves as the portfolio manager and is responsible for the investment decisions of each Fund. Mr. Lekas has been responsible for managing each Predecessor Fund’s portfolio since such Fund’s inception. He has 20 years’ experience as an investment professional. Prior to founding the Advisor in 1997, Mr. Lekas served as a portfolio manager at Smith Barney where he focused on discretionary management of bond portfolios worth over $200 million. He received a bachelor’s degree in finance from the University of Oregon.

 

The Funds’ Statement of Additional Information provides information about Mr. Lekas’ compensation structure, other accounts managed by him and his ownership interests in shares of the Funds.

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HOW SHARES ARE PRICED

 

The net asset value (“NAV”) and offering price (NAV plus any applicable sales charges) of each class of shares is determined as of the close of the New York Stock Exchange (“NYSE”) (normally 4:00 p.m. Eastern Time) on each day the NYSE is open for business. NAV is computed by determining the aggregate market value of all assets of the Fund less its liabilities divided by the total number of each Fund’s shares outstanding ((asset-liabilities)/number of shares=NAV) attributable to each share class. The NYSE is closed on weekends and New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The NAV takes into account the expenses and fees of each Fund, including investment advisory, administration, and any distribution fees, which are accrued daily. The determination of NAV of each Fund for a particular day is applicable to all applications for the purchase of shares, as well as all requests for the redemption of shares, received by each Fund (or an authorized broker or agent, or its authorized designee) before the close of trading on the NYSE on that day.

 

Generally, securities are valued each day at the last quoted sales price on each security’s principal exchange. Securities traded or dealt in upon one or more securities exchanges (whether domestic or foreign) for which market quotations are readily available and not subject to restrictions against resale shall be valued at the last quoted sales price on the primary exchange or, in the absence of a sale on the primary exchange, at the mean between the current bid and ask prices on such exchange. Securities primarily traded in the National Association of Securities Dealers’ Automated Quotation System (“NASDAQ”) National Market System for which market quotations are readily available shall be valued using the NASDAQ Official Closing Price. Securities that are not traded or dealt in any securities exchange (whether domestic or foreign) and for which over-the-counter market quotations are readily available generally shall be valued at the last sale price or, in the absence of a sale, at the mean between the current bid and ask price on such over-the- counter market. Debt securities not traded on an exchange may be valued at prices supplied by a pricing agent(s) based on broker or dealer supplied valuations or matrix pricing, a method of valuing securities by reference to the value of other securities with similar characteristics, such as rating, interest rate and maturity. If market quotations are not readily available, securities will be valued at their fair market value as determined using the “fair value” procedures approved by the Board. In these cases, each Fund’s NAV will reflect certain portfolio securities’ fair value rather than their market price. Fair value pricing involves subjective judgments and it is possible that the fair value determined for a security may be materially different than the value that could be realized upon the sale of that security. The fair value prices can differ from market prices when they become available or when a price becomes available. The Board has delegated execution of these procedures to a fair value team composed of one or more representatives from each of the (i) Trust, (ii) administrator, and (iii) Advisor. The team may also enlist third party consultants such as an audit firm or financial officer of a security issuer on an as-needed basis to assist in determining a security-specific fair value. The Board reviews and ratifies the execution of this process and the resultant fair value prices at least quarterly to assure the process produces reliable results.

 

Each Fund may use independent pricing services to assist in calculating the value of the Fund’s securities. Although not part of the Advisor’s principal investment strategy, since each Fund may invest in foreign securities that are primarily listed on foreign exchanges that may trade on weekends or other days when the Fund does not price its shares, the value of the Fund’s portfolio may change on days when you may not be able to buy or sell Fund shares. In computing the NAV of each Fund, the Advisor values foreign securities held by each Fund at the latest closing price on the exchange in which they are traded immediately prior to closing of the NYSE. Prices of foreign securities quoted in foreign currencies are translated into U.S. dollars at current rates. If events materially affecting the value of a security in each Fund’s portfolio occur before the Fund prices its shares, the security will be valued at fair value. For example, if trading in a portfolio security is halted and does not resume before the Fund calculates its NAV, the Advisor may need to price the security using the Fund’s fair value pricing guidelines. Without a fair value price, short-term traders could take advantage of the arbitrage opportunity and dilute the NAV of long-term investors. Fair valuation of each Fund’s portfolio securities can serve to reduce arbitrage opportunities available to short-term traders, but there is no assurance that fair value pricing policies will prevent dilution of the Fund’s NAV by short-term traders.

 

With respect to any portion of each Fund’s assets that are invested in one or more open-end management investment companies that are registered under the 1940 Act, each Fund’s NAV is calculated based upon the net asset values of the registered open-end management investment companies in which each Fund invests, and the prospectuses for these companies explain the circumstances under which those companies will use fair value pricing and the effects of using fair value pricing.

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HOW TO PURCHASE SHARES

 

The Leader Short Duration Bond Fund and the Leader Total Return Fund each offer four classes of shares: Class A, Class C, Institutional Class and Investor Class. The Leader High Quality Low Duration Bond Fund and Leader Government Bond Fund each offer Institutional Class and Investor Class shares. The main difference between the share classes are the minimum investment, ongoing fees and sales charges. Class A, Class C and Investor Class shares, pay an annual fee of 0.50%, 1.00% and 0.50%, respectively, for distribution expenses pursuant to a plan under Rule 12b-1, and Institutional Class shares do not pay such fees. All share classes may not be available for purchase in all states.

 

Class A Shares: Class A shares are offered at their public offering price, which is net asset value per share plus the applicable sales charge. The sales charge varies, depending on how much you invest. There are no sales charges on reinvested distributions. The Funds reserve the right to waive sales charges. The following sales charges apply to your purchases of Class A shares of a Fund:

 

Amount Invested Sales Charge as a % of Offering Price(1) Sales Charge as a % of Amount Invested Dealer Reallowance(2)
Less than $50,000 1.50% 1.52% 1.50%
$50,000 but less than $250,000 1.00% 1.01% 1.00%
$250,000 but less than $500,000 0.50% 0.51% 0.50%
$500,000 or more None None None
(1)Offering price includes the front-end sales load. The sales charge you pay may differ slightly from the amount set forth above because of rounding that occurs in the calculations used to determine your sales charge.
(2)Represents amount of sales charge retained by the selling broker-dealer.

 

You may be able to buy Class A Shares without a sales charge (i.e. “load-waived”) when you are:

·reinvesting dividends or distributions;
·participating in an investment advisory or agency commission program under which you pay a fee to an investment advisor or other firm for portfolio management or brokerage services;
·exchanging an investment in Class A Shares of another fund for an investment in the Fund;
·a current or former director or trustee of the Fund;
·an employee (including the employee’s spouse, domestic partner, children, grandchildren, parents, grandparents, siblings, and any independent of the employee, as defined in Section 152 of the Internal Revenue Code) of the Fund’s advisor or its affiliates or of a broker-dealer authorized to sell shares of the fund;
·participants in certain “wrap-fee” or asset allocation programs or other fee-based arrangements sponsored by broker-dealers and other financial institutions that have entered into agreements with the Distributor;
·purchasing shares through the Fund’s advisor; or
·purchasing shares through a financial services firm (such as a broker-dealer, investment advisor or financial institution) that has a special arrangement with the Fund.

 

Whether a sales charge waiver is available for your retirement plan or charitable account depends upon the policies and procedures of your intermediary. Please consult your financial adviser for further information.

 

Right of Accumulation: For the purposes of determining the applicable reduced sales charge, the right of accumulation allows you to include prior purchases of Class A shares of a Fund as part of your current investment as well as reinvested dividends. To qualify for this option, you must be either:

·an individual;
·an individual and spouse purchasing shares for your own account or trust or custodial accounts for your minor children; or
·a fiduciary purchasing for any one trust, estate or fiduciary account, including employee benefit plans created under Sections 401, 403 or 457 of the Internal Revenue Code, including related plans of the same employer.

 

If you plan to rely on this right of accumulation, you must notify your financial advisor or the Funds’ transfer agent, at the time of your purchase. You will need to give your financial advisor or the Funds’ transfer agent your account numbers. Existing holdings of family members or other related accounts of a shareholder may be combined for purposes of determining eligibility. If applicable, you will need to provide the account numbers of your spouse and your minor children as well as the ages of your minor children.

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Further information regarding the Fund’s sales charges, breakpoints and waivers is available free of charge upon request. Please see Appendix A – Intermediary-Specific Sales Charge Waivers and Discounts in the prospectus for a description of variations in sales charges and waivers for Fund shares purchased through Raymond James.

 

Class C Shares: Class C shares are sold at NAV without an initial sales charge. This means that 100% of your initial investment is placed into shares of the Fund. Class C shares pay up to 1.00% on an annualized basis of the average daily net assets as reimbursement or compensation for service and distribution-related activities with respect to the Fund and/or shareholder services. Over time, fees paid under this distribution and service plan will increase the cost of a Class C shareholder’s investment and may cost more than other types of sales charges.

 

The Advisor will advance to, or reimburse, a Fund up to 1.00% in connection with 12b-1 fees advanced to authorized broker-dealers on purchases of Class C shares. However, when the Advisor makes such a payment, the respective Class C shares are subject to a CDSC on shares redeemed within 12 months of their purchase in the amount advanced to recover commissions paid to your broker-dealer.

 

Investor Class Shares: Investor Class Shares of each Fund are sold at NAV without an initial sales charge. Investor Class shares pay up to 0.50% on an annualized basis of the average daily net assets as reimbursement or compensation for service and distribution-related activities with respect to the Fund and/or shareholder services. Over time, fees paid under this distribution and service plan will increase the cost of an Investor Class shareholder’s investment and may cost more than other types of sales charges.

 

Institutional Shares: Institutional Shares are sold without any initial sales charge to the following:

1)Accounts for which the Advisor or any of its affiliates act as fiduciary, agent, investment Advisor or custodian and clients of the Advisor’s affiliates.
2)Institutional investors (such as qualified retirement plans, wrap fee plans and other programs charging asset-based fees) with a minimum initial investment of $10,000 that have received authorization from the Advisor.
3)Advisory clients of a registered investment advisor with a fee-based asset management account.
4)Any accounts established on behalf of registered investment advisors or their clients by broker-dealers that charge a transaction fee and that have entered into agreements with the Advisor.

 

For these purposes, “immediate family” is defined to include a person’s spouse, parents and children. The initial investment minimum may be waived for persons affiliated with the Advisor and its affiliated entities.

 

All share classes may not be available for purchase in every state.

 

Voluntary Conversion: Shareholders may be able to convert shares into Institutional Class shares of a Fund, which have a lower expense ratio, provided certain conditions are met. This conversion feature is intended for shares held through a financial intermediary offering a fee-based or wrap fee program that has an agreement with the Advisor or the Distributor for this purpose. In such instances, Class A, Class C or Investor Class shares may be converted under certain circumstances. Generally, Class C Shares are not eligible for conversion until the applicable CDSC period has expired. Please contact your financial intermediary for additional information. Not all share classes are available through all financial intermediaries. If shares of the Fund are converted to a different share class of the Fund, the transaction will be based on the respective NAV of each class as of the trade date of the conversion. Consequently, a shareholder may receive fewer shares than originally owned, depending on that day’s NAVs.

 

Minimum and Additional Investment Amounts: For Institutional Class shares, the minimum initial investment amount for an account is $2,000,000. There is no minimum for subsequent investments. For Leader Short Duration Bond Fund and Leader Total Return Fund Investor Class, Class A and Class C shares, the minimum initial investment amount for all accounts is $2,500 and the minimum subsequent investment is $100. For Leader High Quality Low Duration Bond Fund Investor Class shares, the minimum initial investment amount for all accounts is $2,500 and the minimum subsequent investment is $100. The minimum initial investment for each share class may be waived for clients of the Funds’ Advisor and accounts related to such Advisor clients. Lower minimum initial and additional investments may also be applicable if the shares are purchased through a financial intermediary or retirement account. There is no minimum investment requirement when you are buying shares by reinvesting dividends and distributions from the Funds.

 

Purchasing Shares: You may purchase shares of a Fund by sending a completed application form to the following address:

 

via Regular Mail: or Overnight Mail:
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Leader Funds

c/o Gemini Fund Services, LLC

P.O. Box 541150

Omaha, Nebraska 68154

Leader Funds

c/o Gemini Fund Services, LLC

17645 Wright Street, Suite 200

Omaha, Nebraska 68130

 

The USA PATRIOT Act requires financial institutions, including the Funds, to adopt certain policies and programs to prevent money-laundering activities, including procedures to verify the identity of customers opening new accounts. As requested on the Application, you should supply your full name, date of birth, social security number and permanent street address. Mailing addresses containing a P.O. Box will not be accepted. This information will assist a Fund in verifying your identity. Until such verification is made, the Funds may temporarily limit additional share purchases. In addition, the Funds may limit additional share purchases or close an account if it is unable to verify a shareholder’s identity. As required by law, the Fund may employ various procedures, such as comparing the information to fraud databases or requesting additional information or documentation from you, to ensure that the information supplied by you is correct.

 

Purchase through Brokers: You may invest in the Funds through brokers or agents who have entered into selling agreements with the Funds’ distributor. The brokers and agents are authorized to receive purchase and redemption orders on behalf of the Funds. Such brokers are authorized to designate other intermediaries to receive purchase and redemption orders on the fund’s behalf. Each Fund will be deemed to have received a purchase or redemption order when an authorized broker or its designee receives the order. The broker or agent may set their own initial and subsequent investment minimums. You may be charged a fee if you use a broker or agent to buy or redeem shares of the Funds. Finally, various servicing agents use procedures and impose restrictions that may be in addition to, or different from those applicable to investors purchasing shares directly from a Fund. You should carefully read the program materials provided to you by your servicing agent.

 

Purchase by Wire: If you wish to wire money to make an investment in a Fund, please call the Fund at
1-800-711-9164 for wiring instructions and to notify the Fund that a wire transfer is coming. Any commercial bank can transfer same-day funds via wire. The Fund will normally accept wired funds for investment on the day received if they are received by the Funds’ designated bank before the close of regular trading on the NYSE. Your bank may charge you a fee for wiring same-day funds.

 

Automatic Investment Plan: You may participate in the Funds’ Automatic Investment Plan, an investment plan that automatically moves money from your bank account and invests it in the Funds through the use of electronic funds transfers or automatic bank drafts. You may elect to make subsequent investments by transfers of a minimum of $100 on specified days of each month into your established Fund account for the Leader Short Duration Bond Fund. You may elect to make subsequent investments by transfers of a minimum of $25 on specified days of each month into your established Fund account for the Leader Total Return Fund. You may elect to make subsequent investments by transfers of a minimum of $100 on specified days of each month into your established Fund account for Leader High Quality Low Duration Bond Fund. Please contact the Funds at 1-800-711-9164 for more information about the Funds’ Automatic Investment Plan.

 

When Order is Processed: All shares will be purchased at the NAV per share next determined after the Funds or their designated financial intermediaries receive your application or request in good order. All requests received in good order by the Funds before 4:00 p.m. (Eastern Time) will be processed on that same day. Requests received after 4:00 p.m. will be processed on the next business day.

 

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 and share class;

·         the dollar amount of shares to be purchased;

·         a completed purchase application or investment stub; and

·         check payable to the “Leader Short Duration Bond Fund” or
“Leader Total Return Fund” or “Leader High Quality Low Duration Bond Fund.”

 

Retirement Plans: You may purchase shares of a Fund for your individual retirement plans. Please call the Funds at 1-800-711-9164 for the most current listing and appropriate disclosure documentation on how to open a retirement account.

 

Each Fund, however, reserves the right, in its sole discretion, to reject any application to purchase shares. Applications will not be accepted unless they are accompanied by a check drawn on a U.S. bank, savings and loan, or credit union in U.S. funds for the full amount of the shares to be purchased. After you open an account, you may purchase additional

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shares by sending a check together with written instructions stating the name(s) on the account and the account number, to the above address. Make all checks payable to the applicable Fund. The Funds will not accept payment in cash, including cashier’s checks or money orders. Also, to prevent check fraud, the Funds will not accept third party checks, U.S. Treasury checks, credit card checks or starter checks for the purchase of shares.

 

Note: Gemini Fund Services, LLC, the Funds’ transfer agent, (the “Transfer Agent”) will charge a $25 fee against a shareholder’s account, in addition to any loss sustained by a Fund, for any check returned to the transfer agent for insufficient funds.

 

HOW TO REDEEM SHARES

 

Redeeming Shares: You may redeem all or any portion of the shares credited to your account by submitting a written request for redemption to:

 

via Regular Mail: or Overnight Mail:

Leader Funds

c/o Gemini Fund Services, LLC

P.O. Box 541150

Omaha, Nebraska 68154

Leader Funds

c/o Gemini Fund Services, LLC

17645 Wright Street, Suite 200

Omaha, Nebraska 68130

 

Redemptions by Telephone: The telephone redemption privilege is automatically available to all new accounts except retirement accounts. If you do not want the telephone redemption privilege, you must indicate this in the appropriate area on your account application or you must write to the Funds and instruct it to remove this privilege from your account.

 

The proceeds will be sent by mail to the address designated on your account or wired directly to your existing account in a bank or brokerage firm in the United States as designated on your application. To redeem by telephone, call 1-800-711-9164. The redemption proceeds normally will be sent by mail or by wire within three business days after receipt of your telephone instructions. IRA accounts are not redeemable by telephone. You may redeem shares telephonically up to $100,000.

 

The Funds reserve the right to suspend the telephone redemption privileges with respect to your account if the name(s) or the address on the account has been changed within the previous 30 days. Neither the Funds, the Transfer Agent, nor their respective affiliates will be liable for complying with telephone instructions they reasonably believe to be genuine or for any loss, damage, cost or expenses in acting on such telephone instructions and you will be required to bear the risk of any such loss. The Funds or the transfer agent, or both, will employ reasonable procedures to determine that telephone instructions are genuine. If the Funds and/or the transfer agent do not employ these procedures, they may be liable to you for losses due to unauthorized or fraudulent instructions. These procedures may include, among others, requiring forms of personal identification prior to acting upon telephone instructions, providing written confirmation of the transactions and/or tape recording telephone instructions.

 

Redemptions through Broker: If shares of a Fund are held by a broker-dealer, financial institution or other servicing agent, you must contact that servicing agent to redeem shares of the Fund. The servicing agent may charge a fee for this service.

 

Redemptions by Wire: You may request that your redemption proceeds be wired directly to your bank account. The Funds’ transfer agent imposes a $15 fee for each wire redemption and deducts the fee directly from your account. Your bank may also impose a fee for the incoming wire.

 

Automatic Withdrawal Plan: If your individual account, IRA or other qualified plan account has a current account value of at least $10,000 for Investor Class shares or $3 million for Institutional Class shares, you may participate in the Funds’ Automatic Withdrawal Plan, an investment plan that automatically moves money to your bank account from a Fund through the use of electronic funds transfers. You may elect to make subsequent withdrawals by transfers of a minimum of $100 on specified days of each month into your established bank account. Please contact the Funds at 1-800-711-9164 for more information about the Funds’ Automatic Withdrawal Plan.

 

Redemptions in Kind: Each Fund reserves the right to honor requests for redemption or repurchase orders made by a shareholder during any 90-day period by making payment in whole or in part in portfolio securities (“redemption in kind”) if the amount of such a request is large enough to affect operations (if the request is greater than the lesser of $250,000 or 1% of the Fund’s net assets at the beginning of the 90-day period). In such a case, the Trustees may authorize payment to be made in readily marketable portfolio securities of a Fund, either through the distribution of selected individual portfolio securities or a pro-rata distribution of all portfolio securities held by the Fund. The securities will be valued using the same procedures as used in calculating the Fund’s NAV. A shareholder will be exposed to market risk until these securities are converted to cash and may incur transaction expenses in converting these securities to cash.

 

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When Redemptions are Sent: Once a Fund receives your redemption request in “good order” as described below, it will issue a check based on the next determined NAV following your redemption request. The redemption proceeds normally will be sent by mail or by wire within three business days after receipt of a request in “good order.” If you purchase shares using a check and soon after request a redemption, your redemption proceeds will not be sent until the check used for your purchase has cleared your bank.

 

Good Order: Your redemption request will be processed if it is in “good order.” To be in good order, the following conditions must be satisfied:

·         The request should be in writing, unless redeeming by telephone, indicating the number of shares or dollar amount to be redeemed;

·         the request must identify your account number;

·         the request should be signed by you and any other person listed on the account, exactly as the shares are registered; and

·         if you request that the redemption proceeds be sent to a person, bank or an address other than that of record or paid to someone other than the record owner(s), or if the address was changed within the last 30 days, or if the proceeds of a requested redemption exceed $100,000, the signature(s) on the request must be medallion signature guaranteed by an eligible signature guarantor.

 

Exchanging Shares: Shares of a Fund may be exchanged without payment of any exchange fee for shares of the other Fund of the same class at their respective net asset values.

 

An exchange of shares is treated for federal income tax purposes as a redemption (sale) of shares given in exchange by the shareholder, and an exchanging shareholder may, therefore, realize a taxable gain or loss in connection with the exchange.

 

Regarding redemptions and exchanges made by telephone, the Funds’ Transfer Agent will request personal or other identifying information to confirm that the instructions received from shareholders or their account representatives are genuine. Calls may be recorded. For your protection, we may delay a transaction or not implement one if we are not reasonably satisfied that the instructions are genuine. If this occurs, we will not be liable for any loss. The Fund and the transfer agent also will not be liable for any losses if they follow instruction by phone that they reasonably believe are genuine or if an investor is unable to execute a transaction by phone.

 

Limitations on Exchanges. The Funds believe that use of the exchange privilege by investors utilizing market-timing strategies adversely affects the Funds and their shareholders. Therefore, the Funds will not honor requests for exchanges by shareholders who identify themselves or are identified as “market timers”. Market timers are investors who repeatedly make exchanges within a short period of time. The Funds reserve the right to suspend, limit or terminate the exchange privilege of an investor who uses the exchange privilege more than six times during any twelve-month period, or in the Funds’ opinion, engages in excessive trading that would be disadvantageous to the Funds or their shareholders. In those emergency circumstances, wherein the SEC authorizes funds to do so, the Funds reserve the right to change or temporarily suspend the exchange privilege.

 

When You Need Medallion Signature Guarantees: If you wish to change the bank or brokerage account that you have designated on your account, you may do so at any time by writing to the Fund with your signature guaranteed. A medallion signature guarantee assures that a signature is genuine and protects you from unauthorized account transfers. You will need your signature guaranteed if:

·you request a redemption to be made payable to a person not on record with the Fund,
·you request that a redemption be mailed to an address other than that on record with the Fund,
·the proceeds of a requested redemption exceed $100,000,
·any redemption is transmitted by federal wire transfer to a bank other than the bank of record, or
·your address was changed within 30 days of your redemption request.

 

Signatures may be guaranteed by any eligible guarantor institution (including banks, brokers and dealers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations). Further documentation will be required to change the designated account if shares are held by a corporation, fiduciary or other organization. A notary public cannot guarantee signatures.

 

Retirement Plans: If you own an IRA or other retirement plan, you must indicate on your redemption request whether the Fund should withhold federal income tax. Unless you elect in your redemption request that you do not want to have federal tax withheld, the redemption will be subject to withholding.

 

Low Balances: If at any time your account balance in a Fund falls below $2,500 for Class A, Class C and Investor Class shares or $2 million for Institutional Class shares, the Fund may notify you that, unless the account is brought up to the

45 
 

applicable minimum within 60 days of the notice, your account could be closed. After the notice period, the Fund may redeem all of your shares and close your account by sending you a check to the address of record. Your account will not be closed if the account balance drops below the applicable minimum due to a decline in NAV.

 

It may take up to 7 days following the receipt of your redemption request to pay out redemption proceeds by check or electronic transfer. The Fund typically expects to pay redemptions from cash, cash equivalents, and proceeds from the sale of portfolio securities. These redemption payment methods will be used in regular and stressed market conditions.

 

FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES

 

Each Fund discourages and does not accommodate market timing. Frequent trading into and out of a Fund can harm all Fund shareholders by disrupting the Fund’s investment strategies, increasing Fund expenses, decreasing tax efficiency and diluting the value of shares held by long-term shareholders. Each Fund is designed for long-term investors and is not intended for market timing or other disruptive trading activities. Accordingly, the Funds’ Board has approved policies that seek to curb these disruptive activities while recognizing that shareholders may have a legitimate need to adjust their Fund investments as their financial needs or circumstances change. The Funds currently use several methods to reduce the risk of market timing. These methods include:

  • Committing staff to review, on a continuing basis, recent trading activity in order to identify trading activity that may be contrary to the Funds’ “Market Timing Trading Policy”;
  • reject or limit specific purchase requests; and
  • reject purchase requests from certain investors.

 

Though these methods involve judgments that are inherently subjective and involve some selectivity in their application, the Funds seek to make judgments and applications that are consistent with the interests of the Funds’ shareholders.

 

Each Fund reserves the right to reject or restrict purchase or exchange requests for any reason, particularly when the shareholder’s trading activity suggests that the shareholder may be engaged in market timing or other disruptive trading activities. Neither the Funds nor the Advisor will be liable for any losses resulting from rejected purchase or exchange orders. The Advisor may also bar an investor who has violated these policies (and the investor’s financial advisor) from opening new accounts with the Funds.

 

Although the Funds attempt to limit disruptive trading activities, some investors use a variety of strategies to hide their identities and their trading practices. There can be no guarantee that the Funds will be able to identify or limit these activities. Omnibus account arrangements are common forms of holding shares of the Funds. While the Funds will encourage financial intermediaries to apply the Funds’ Market Timing Trading Policy to their customers who invest indirectly in the Funds, the Funds are limited in its ability to monitor the trading activity or enforce the Funds’ Market Timing Trading Policy with respect to customers of financial intermediaries. For example, should it occur, a Fund may not be able to detect market timing that may be facilitated by financial intermediaries or made difficult to identify in the omnibus accounts used by those intermediaries for aggregated purchases, exchanges and redemptions on behalf of all their customers. More specifically, unless the financial intermediaries have the ability to apply the Funds’ Market Timing Trading Policy to their customers through such methods as implementing short-term trading limitations or restrictions and monitoring trading activity for what might be market timing, the Funds may not be able to determine whether trading by customers of financial intermediaries is contrary to the Funds’ Market Timing Trading Policy. Brokers maintaining omnibus accounts with the Funds have agreed to provide shareholder transaction information to the extent known to the broker to the Fund upon request. If the Funds or their transfer agent or shareholder servicing agent suspects there is market timing activity in the account, the Funds will seek full cooperation from the service provider maintaining the account to identify the underlying participant. At the request of the Advisor, the service providers may take immediate action to stop any further short-term trading by such participants.

 

TAX STATUS, DIVIDENDS AND DISTRIBUTIONS

 

Any sale or exchange of a Fund’s shares may generate tax liability (unless you are a tax-exempt investor or your investment is in a qualified retirement account). When you redeem your shares you will generally realize a taxable gain or loss. This is measured by the difference between the proceeds of the sale and the tax basis for the shares you sold. (To aid in computing your tax basis, you generally should retain your account statements for the period that you hold shares in the Fund.)

 

Each Fund intends to distribute all or substantially all of its net investment income monthly and net capital gains annually.

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Both distributions will be reinvested in shares of the Fund unless you elect to receive cash. Dividends from net investment income (including any excess of net short-term capital gain over net long-term capital loss) are taxable to investors as ordinary income, while distributions of net capital gain (the excess of net long-term capital gain over net short-term capital loss) are generally taxable as long-term capital gain, regardless of your holding period for the shares. Any dividends or capital gain distributions you receive from a Fund will normally be taxable to you when made, regardless of whether you reinvest dividends or capital gain distributions or receive them in cash. Each year each Fund will inform you of the amount and type of your distributions. IRAs and other qualified retirement plans are exempt from federal income taxation until retirement proceeds are paid out to the participant.

 

Your redemptions, including exchanges, will generally result in a capital gain or loss for federal tax purposes. A capital gain or loss on your investment is the difference between the tax basis (generally the cost) of your shares, including any sales charges, and the amount you receive when you sell them.

 

On the account application, you will be asked to certify that your social security number or taxpayer identification number is correct and that you are not subject to backup withholding for failing to report income to the IRS. If you are subject to backup withholding or you did not certify your taxpayer identification number, the IRS requires a Fund to withhold a percentage of any dividend, redemption or exchange proceeds. Each Fund reserves the right to reject any application that does not include a certified social security or taxpayer identification number. If you do not have a social security number, you should indicate on the purchase form that your application to obtain a number is pending. Each Fund is required to withhold taxes if a number is not delivered to the Fund within seven days.

 

Fund distributions and gains from the sale or exchange of your shares will generally be subject to state and local income tax. Non-U.S. investors may be subject to U.S. withholding and estate tax. You should consult with your tax adviser about the federal, state, local or foreign tax consequences of your investment in the Fund.

 

Federal law requires that mutual fund companies report their shareholders’ cost basis, gain/loss, and holding period to the IRS on each Fund’s shareholders’ Consolidated Form 1099s when “covered” securities are sold. Covered securities are any regulated investment company and/or dividend reinvestment plan shares acquired on or after January 1, 2012. Each Fund has chosen average cost as its standing (default) tax lot identification method for all shareholders. A tax lot identification method is the way a Fund will determine which specific shares are deemed to be sold when there are multiple purchases on different dates at differing NAVs, and the entire position is not sold at one time. A Fund’s standing tax lot identification method is the method covered shares will be reported on your Consolidated Form 1099 if you do not select a specific tax lot identification method. You may choose a method different than the Fund’s standing method and will be able to do so at the time of your purchase or upon the sale of covered shares. Please refer to the appropriate Internal Revenue Service regulations or consult your tax advisor with regard to your personal circumstances.

 

For those securities defined as “covered” under current IRS cost basis tax reporting regulations, a Fund is responsible for maintaining accurate cost basis and tax lot information for tax reporting purposes. The Fund is not responsible for the reliability or accuracy of the information for those securities that are not “covered.” The Fund and its service providers do not provide tax advice. You should consult independent sources, which may include a tax professional, with respect to any decisions you may make with respect to choosing a tax lot identification method.

 

This summary is not intended to be and should not be construed to be legal or tax advice. You should consult your own tax advisors to determine the tax consequences of owning the Funds’ shares.

 

DISTRIBUTION OF SHARES

 

Distributor: Ceros Financial Services, Inc., (the “Distributor”) located at 1445 Research Boulevard, Suite 530, Rockville, MD 20850, serves as distributor of the shares of each Fund. The Distributor is a registered broker-dealer and member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). Shares of the Funds are offered on a continuous basis.

 

Distribution (12b-1) and Shareholder Servicing Fees: The Trust, with respect to the Leader Short Duration Bond Fund and the Leader Total Return Fund, has adopted the Trust’s Master Distribution and Shareholder Servicing Plans for Class A, Class C, and Investor Class shares (the “Plans”) pursuant to Rule 12b-1 of the 1940 Act which allows each Fund to pay the Fund’s distributor an annual fee for distribution and shareholder servicing expenses of 0.50%, 1.00%, and 0.50% of Fund’s average daily net assets attributable to Class A, Class C, and Investor Class shares, respectively.

 

The Trust, with respect to the Leader High Quality Low Duration Bond Fund and Leader Government Bond Fund, has

47 
 

adopted the Trust’s Master Distribution and Shareholder Servicing Plan for Investor Class shares (the “Plan”) pursuant to Rule 12b-1 of the 1940 Act which allows the Fund to pay the Fund’s distributor an annual fee for distribution and shareholder servicing expenses of 0.50% of Fund’s average daily net assets attributable to Investor Class shares. For the current fiscal year the Board has authorized a rate of 0.38% for Investor Class shares.

 

The Funds’ Distributor and other entities are paid pursuant to the Plans, for distribution and shareholder servicing provided and the expenses borne by the Distributor and others in the distribution of Investor Class, Class A, and Class C Fund shares, including the payment of commissions for sales of the shares and incentive compensation to and expenses of dealers and others who engage in or support distribution of shares or who service shareholder accounts, including overhead and telephone expenses; printing and distribution of prospectuses and reports used in connection with the offering of the Fund’s shares to other than current shareholders; and preparation, printing and distribution of sales literature and advertising materials. In addition, the Distributor or other entities may utilize fees paid pursuant to the Plan to compensate dealers or other entities for their opportunity costs in advancing such amounts, which compensation would be in the form of a carrying charge on any un-reimbursed expenses.

 

You should be aware that if you had your shares for a substantial period of time, you may indirectly pay more than the economic equivalent of the maximum front-end sales charge allowed by FINRA due to the recurring nature of distribution (12b-1) fees.

 

Additional Compensation to Financial Intermediaries: The Funds’ Distributor, its affiliates, and the Fund’s Advisor and its affiliates may each, at its own expense and out of its own assets including their legitimate profits from Fund-related activities, provide additional cash payments to financial intermediaries who sell shares of the Fund. Financial intermediaries include brokers, financial planners, banks, insurance companies, retirement or 401(k) plan administrators and others. These payments may be in addition to the Rule 12b-1 fees that are disclosed elsewhere in this Prospectus. These payments are generally made to financial intermediaries that provide shareholder or administrative services, or marketing support. Marketing support may include access to sales meetings, sales representatives and financial intermediary management representatives, inclusion of the Funds on a sales list, including a preferred or select sales list, or other sales programs. These payments also may be made as an expense reimbursement in cases where the financial intermediary provides shareholder services to Fund shareholders. The Advisor may, from time to time, provide promotional incentives to certain investment firms. Such incentives may, at the Advisor’s discretion, be limited to investment firms who allow their individual selling representatives to participate in such additional commissions.

 

Householding: To reduce expenses, only one copy of the prospectus and each annual and semi-annual report will be mailed to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, please call the Funds at 1-800-711-9164 on days the Fund is open for business or contact your financial institution.


The Funds will begin sending you individual copies thirty days after receiving your request.

48 
 

FINANCIAL HIGHLIGHTS

 

The following tables are intended to help you understand each Predecessor Fund’s financial performance. Certain information reflects financial results for a single Predecessor Fund share. The total return figures represent the percentage that an investor in a Predecessor Fund would have earned (or lost) on an investment in the Predecessor Fund (assuming reinvestment of all dividends and distributions). The information for each Predecessor Fund has been derived from the financial statements audited by BBD, LLP, whose report, along with the Funds’ financial statements, are included in the Predecessor Funds’ May 31, 2019 annual report, which is available upon request.

 

Leader Short Duration Bond Fund

 

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout Each Year Presented.

 

    Investor Class  
    Year Ended May 31,  
    2019     2018     2017     2016     2015  
                               
Net asset value, beginning of year   $ 8.91     $ 8.98     $ 9.05     $ 9.79     $ 10.10  
From investment operations:                                        
Net investment income(1)     0.22       0.24 (10)     0.20       0.19       0.24  
Net realized and unrealized gain (loss) on investments     0.01 (9)     (0.06 )(10)     (0.08 )     (0.74 )     (0.23 )
Total from investment operations     0.23       0.18       0.12       (0.55 )     0.01  
Paid-in-capital from redemption fees     0.00 (8)                        
Less distributions from:                                        
Net investment income     (0.20 )     (0.25 )     (0.17 )     (0.15 )     (0.24 )
Net realized gains                             (0.08 )
Return of capital                 (0.02 )     (0.04 )      
Total distributions     (0.20 )     (0.25 )     (0.19 )     (0.19 )     (0.32 )
Net asset value, end of year   $ 8.94     $ 8.91     $ 8.98     $ 9.05     $ 9.79  
Total return(2)     2.58 %(6)     1.99 %(6)     1.34 %(3)     (5.60 )%     0.11 %
Net assets, end of year (000s)   $ 43,489     $ 54,874     $ 89,743     $ 193,008     $ 335,258  
Ratio of gross expenses to average net assets including dividend and interest expense, excluding waiver(4)     1.81 %     1.65 %     1.54 %     1.41 %     1.43 %
Ratio of net expenses to average net assets including dividend and interest expense(4)     1.79 %     1.62 %     1.54 %     1.41 %     1.43 %
Ratio of net expenses to average net assets:                                        
excluding dividends and interest expense(4)     1.66 %     1.54 %     1.48 %     1.41 %     1.43 %
Ratio of net investment income to average net assets(4,5)     2.48 %     2.68 %(10)     2.16 %     2.08 %     2.38 %
Portfolio Turnover Rate     496.37 %     325.30 %     143.80 %     106.98 %     71.38 %
                                         
(1)Per shares amounts calculated using the average share method, which appropriately presents the per share data for the year.
(2)Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends and distributions.
(3)Total Return would have been 1.22% if the reimbursement of trade errors had not been made by the Advisor.
(4)The ratios shown do not include the Fund’s proportionate shares of the expenses of the underlying funds in which the Fund invests.
(5)Recognition of net investment income is affected by the timing and declaration of dividends by the underlying funds in which the Fund invests.
(6)Includes adjustments in accordance with accounting principles generally accepted in the United States and, consequently, the net asset value for financial reporting purposes and the returns based upon the net asset values may differ from the net asset values and returns for shareholder transactions.
(8)Less than $0.01 per share.
(9)The amount of net realized and unrealized gain (loss) on investment per share does not accord with the amounts in the Statements of Operations due to the timing of purchases and sales of Fund shares in relation to fluctuating market values.
(10)Net Investment Income, net realized and unrealized gain(loss) and ratio of net investment income to average net assets were restated.
49 
 

Leader Short Duration Bond Fund

 

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout Each Year Presented.

 

    Institutional Class  
    Year Ended May 31,  
    2019     2018     2017     2016     2015  
                               
Net asset value, beginning of year   $ 8.98     $ 9.05     $ 9.12     $ 9.86     $ 10.17  
From investment operations:                                        
Net investment income(1)     0.27       0.28 (8)     0.24       0.25       0.29  
Net realized and unrealized gain (loss) on investments     0.01 (7)     (0.05 )(8)     (0.08 )     (0.75 )     (0.23 )
Total from investment operations     0.28       0.23       0.16       (0.50 )     0.06  
Less distributions from:                                        
Net investment income     (0.24 )     (0.30 )     (0.21 )     (0.18 )     (0.29 )
Net realized gains                             (0.08 )
Return of capital                 (0.02 )     (0.06 )      
Total distributions     (0.24 )     (0.30 )     (0.23 )     (0.24 )     (0.37 )
Net asset value, end of year   $ 9.02     $ 8.98     $ 9.05     $ 9.12     $ 9.86  
Total return(2)     3.11 %(6)     2.54 %(6)     1.79 %(3)     (5.08 )%     0.62 %
Net assets, end of year (000s)   $ 45,994     $ 59,181     $ 106,392     $ 245,710     $ 504,366  
Ratio of gross expenses to average net assets including dividend and interest expense, excluding waiver(4)     1.30 %     1.15 %     1.04 %     0.91 %     0.93 %
Ratio of net expenses to average net assets including dividend and interest expense(4)     1.29 %     1.12 %     1.04 %     0.91 %     0.93 %
Ratio of net expenses to average net assets:                                        
excluding dividends and interest expense(4)     1.16 %     1.04 %     0.99 %     0.91 %     0.93 %
Ratio of net investment income to average net assets(4,5)     3.04 %     3.16 %(8)     2.65 %     2.68 %     2.89 %
Portfolio Turnover Rate     496.37 %     325.30 %     143.80 %     106.98 %     71.38 %
                                         
(1)Per shares amounts calculated using the average share method, which appropriately presents the per share data for the year.
(2)Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends and distributions, if any.
(3)Total Return would have been 1.66% if the reimbursement of trade errors had not been made by the Advisor.
(4)The ratios shown do not include the Fund’s proportionate shares of the expenses of the underlying funds in which the Fund invests.
(5)Recognition of net investment income is affected by the timing and declaration of dividends by the underlying funds in which the Fund invests.
(6)Includes adjustments in accordance with accounting principles generally accepted in the United States and, consequently, the net asset value for financial reporting purposes and the returns based upon the net asset values may differ from the net asset values and returns for shareholder transactions.
(7)The amount of net realized and unrealized gain (loss) on investment per share does not accord with the amounts in the Statements of Operations due to the timing of purchases and sales of Fund shares in relation to fluctuating market values.
(8)Net Investment Income, net realized and unrealized gain(loss) and ratio of net investment income to average net assets were restated.
50 
 

Leader Short Duration Bond Fund

 

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout Each Year Presented.

 

    Class A  
    Year Ended May 31,  
    2019     2018     2017     2016     2015  
                               
Net asset value, beginning of year   $ 8.90     $ 8.96     $ 9.04     $ 9.77     $ 10.08  
From investment operations:                                        
Net investment income(1)     0.22       0.24 (10)     0.20       0.20       0.23  
Net realized and unrealized gain (loss) on investments     0.00  (8,9)     (0.05 )(10)     (0.09 )     (0.74 )     (0.22 )
Total from investment operations     0.22       0.19       0.11       (0.54 )     0.01  
Less distributions from:                                        
Net investment income     (0.20 )     (0.25 )     (0.17 )     (0.15 )     (0.24 )
Net realized gains                             (0.08 )
Return of capital                 (0.02 )     (0.04 )      
Total distributions     (0.20 )     (0.25 )     (0.19 )     (0.19 )     (0.32 )
Net asset value, end of year   $ 8.92     $ 8.90     $ 8.96     $ 9.04     $ 9.77  
Total return(2)     2.46 %(6)     2.11 %(6)     1.21 %(3)     (5.52 )%     0.10 %
Net assets, end of year (000s)   $ 6,843     $ 6,776     $ 10,026     $ 23,619     $ 46,008  
Ratio of gross expenses to average net assets including dividend and interest expense, excluding waiver(4)     1.81 %     1.64 %     1.54 %     1.41 %     1.43 %
Ratio of net expenses to average net assets including dividend and interest expense(4)     1.80 %     1.61 %     1.54 %     1.41 %     1.43 %
Ratio of net expenses to average net assets:                                        
excluding dividends and interest expense(4)     1.66 %     1.55 %     1.48 %     1.41 %     1.43 %
Ratio of net investment income to average net assets(4,5)     2.52 %     2.66 %(10)     2.16 %     2.11 %     2.38 %
Portfolio Turnover Rate     496.37 %     325.30 %     143.80 %     106.98 %     71.38 %
                                         
(1)Per shares amounts calculated using the average share method, which appropriately presents the per share data for the year.
(2)Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends and distributions, if any. Class A total return does not reflect the applicable sales load.
(3)Total Return would have been 1.04% if the reimbursement of trade errors had not been made by the Advisor.
(4)The ratios shown do not include the Fund’s proportionate shares of the expenses of the underlying funds in which the Fund invests.
(5)Recognition of net investment income is affected by the timing and declaration of dividends by the underlying funds in which the Fund invests.
(6)Includes adjustments in accordance with accounting principles generally accepted in the United States and, consequently, the net asset value for financial reporting purposes and the returns based upon the net asset values may differ from the net asset values and returns for shareholder transactions.
(8)Less than $0.01 per share.
(9)The amount of net realized and unrealized gain (loss) on investment per share does not accord with the amounts in the Statements of Operations due to the timing of purchases and sales of Fund shares in relation to fluctuating market values.
(10)Net Investment Income, net realized and unrealized gain(loss) and ratio of net investment income to average net assets were restated.
51 
 

Leader Short Duration Bond Fund

 

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout Each Year Presented.

 

    Class C  
    Year Ended May 31,  
    2019     2018     2017     2016     2015  
                               
Net asset value, beginning of year   $ 8.92     $ 8.99     $ 9.07     $ 9.81     $ 10.12  
From investment operations:                                        
Net investment income(1)     0.18       0.19 (7)     0.15       0.15       0.19  
Net realized and unrealized gain (loss) on investments     (0.01 )     (0.05 )(7)     (0.07 )     (0.74 )     (0.23 )
Total from investment operations     0.17       0.14       0.08       (0.59 )     (0.04 )
Less distributions from:                                        
Net investment income     (0.16 )     (0.21 )     (0.15 )     (0.13 )     (0.19 )
Net realized gains                             (0.08 )
Return of capital                 (0.01 )     (0.02 )      
Total distributions     (0.16 )     (0.21 )     (0.16 )     (0.15 )     (0.27 )
Net asset value, end of year   $ 8.93     $ 8.92     $ 8.99     $ 9.07     $ 9.81  
Total return(2)     1.93 %(6)     1.56 %(6)     0.84 %(3)     (6.07 )%     (0.39 )%
Net assets, end of year (000s)   $ 3,362     $ 3,915     $ 5,934     $ 12,488     $ 20,337  
Ratio of gross expenses to average net assets including dividend and interest expense, excluding waiver(4)     2.31 %     2.15 %     2.04 %     1.91 %     1.93 %
Ratio of net expenses to average net assets including dividend and interest expense(4)     2.29 %     2.11 %     2.04 %     1.91 %     1.93 %
Ratio of net expenses to average net assets:                                        
excluding dividends and interest expense(4)     2.16 %     2.05 %     1.98 %     1.91 %     1.93 %
Ratio of net investment income to average net assets(4,5)     2.04 %     2.11 %(7)     1.66 %     1.56 %     1.92 %
Portfolio Turnover Rate     496.37 %     325.30 %     143.80 %     106.98 %     71.38 %
                                         
(1)Per shares amounts calculated using the average share method, which appropriately presents the per share data for the year.
(2)Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends and distributions, if any.
(3)Total Return would have been 0.71% if the reimbursement of trade errors had not been made by the Advisor.
(4)The ratios shown do not include the Fund’s proportionate shares of the expenses of the underlying funds in which the Fund invests.
(5)Recognition of net investment income is affected by the timing and declaration of dividends by the underlying funds in which the Fund invests.
(6)Includes adjustments in accordance with accounting principles generally accepted in the United States and, consequently, the net asset value for financial reporting purposes and the returns based upon the net asset values may differ from the net asset values and returns for shareholder transactions.
(7)Net Investment Income, net realized and unrealized gain(loss) and ratio of net investment income to average net assets were restated.
52 
 

Total Return Fund

 

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout Each Year Presented.

 

    Investor Class  
    Year Ended May 31,  
    2019     2018     2017     2016     2015  
                               
Net asset value, beginning of year   $ 9.71     $ 9.60     $ 9.35     $ 10.74     $ 11.36  
From investment operations:                                        
Net investment income(1)     0.23       0.28 (8)     0.27       0.40       0.42  
Net realized and unrealized gain (loss) on investments     0.37       0.11 (2,8)     0.24       (1.37 )     (0.46 )
Total from investment operations     0.60       0.39       0.51       (0.97 )     (0.04 )
Less distributions from:                                        
Net investment income     (0.24 )     (0.28 )     (0.22 )     (0.28 )     (0.42 )
Net realized gains                             (0.16 )
Return of capital                 (0.04 )     (0.14 )      
Total distributions     (0.24 )     (0.28 )     (0.26 )     (0.42 )     (0.58 )
Net asset value, end of year   $ 10.07     $ 9.71     $ 9.60     $ 9.35     $ 10.74  
Total return(3)     6.33 %(7)     4.08 %(7)     5.57 %     (9.04 )%     (0.30 )%
Net assets, end of year (000s)   $ 10,955     $ 8,091     $ 14,209     $ 20,087     $ 80,582  
Ratio of net expenses to average net assets including
dividend and interest expense(4)
    2.42 %     2.28 %     1.81 %     1.54 %     1.55 %(6)
Ratio of net expenses to average net assets:                                        
excluding dividends and interest expense(4)     2.42 %     2.20 %     1.77 %     1.54 %     1.52 %(6)
Ratio of net investment income to average net assets(4,5)     2.28 %     2.93 %(8)     2.88 %     4.00 %     3.81 %(6)
Portfolio Turnover Rate     397.79 %     535.81 %     175.53 %     208.59 %     173.78 %
                                         
(1)Per shares amounts calculated using the average share method, which appropriately presents the per share data for the year.
(2)Realized and unrealized gain/loss per share in this caption are balancing amounts necessary to reconcile the change in net asset value per share for the year, and may not reconcile with aggregate gains and losses in the statement of operations due to the share transactions for the year.
(3)Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends and distributions, if any.
(4)The ratios shown do not include the Fund’s proportionate shares of the expenses of the underlying funds in which the Fund invests.
(5)Recognition of net investment income is affected by the timing and declaration of dividends by the underlying funds in which the Fund invests.
(6)Inclusive of Advisor’s recapture of waived/reimbursed fees from prior periods.
(7)Includes adjustments in accordance with accounting principles generally accepted in the United States and, consequently, the net asset value for financial reporting purposes and the returns based upon the net asset values may differ from the net asset values and returns for shareholder transactions.
(8)Net Investment Income, net realized and unrealized gain(loss) and ratio of net investment income to average net assets were restated.
53 
 

 

Leader Total Return Fund

 

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout Each Year Presented.

 

    Institutional Class  
    Year Ended May 31,  
    2019     2018     2017     2016     2015  
                               
Net asset value, beginning of year   $ 9.67     $ 9.56     $ 9.30     $ 10.69     $ 11.31  
From investment operations:                                        
Net investment income(1)     0.26       0.31 (8)     0.33       0.48       0.47  
Net realized and unrealized gain (loss) on investments     0.39       0.12 (2,8)     0.24       (1.40 )     (0.46 )
Total from investment operations     0.65       0.43       0.57       (0.92 )     0.01  
Less distributions from:                                        
Net investment income     (0.28 )     (0.32 )     (0.26 )     (0.31 )     (0.47 )
Net realized gains                             (0.16 )
Return of capital                 (0.05 )     (0.16 )      
Total distributions     (0.28 )     (0.32 )     (0.31 )     (0.47 )     (0.63 )
Net asset value, end of year   $ 10.04     $ 9.67     $ 9.56     $ 9.30     $ 10.69  
Total return(3)     6.84 %(7)     4.56 %(7)     6.22 %     (8.64 )%     0.18 %
Net assets, end of year (000s)   $ 14,162     $ 8,831     $ 22,291     $ 42,043     $ 141,065  
Ratio of net expenses to average net assets including
dividend and interest expense(4)
    1.88 %     1.78 %     1.31 %     1.04 %     1.05 %(6)
Ratio of net expenses to average net assets:                                        
excluding dividends and interest expense(4)     1.88 %     1.70 %     1.27 %     1.04 %     1.02 %(6)
Ratio of net investment income to average net assets(4,5)     2.62 %     3.22 %(8)     3.47 %     4.80 %     4.35 %(6)
Portfolio Turnover Rate     397.79 %     535.81 %     175.53 %     208.59 %     173.78 %
                                         
(1)Per shares amounts calculated using the average share method, which appropriately presents the per share data for the year.
(2)Realized and unrealized gain/loss per share in this caption are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with aggregate gains and losses in the statement of operations due to the share transactions for the period.
(3)Total return in the above table represents the rate that the investor would have earned or lost as an investment in the Fund, assuming reinvestment of dividends and distributions, if any.
(4)The ratios shown do not include the Fund’s proportionate shares of the expenses of the underlying funds in which the Fund invests.
(5)Recognition of net investment income is affected by the timing and declaration of dividends by the underlying funds in which the Fund invests.
(6)Inclusive of Advisor’s recapture of waived/reimbursed fees from prior periods.
(7)Includes adjustments in accordance with accounting principles generally accepted in the United States and, consequently, the net asset value for financial reporting purposes and the returns based upon the net asset values may differ from the net asset values and returns for shareholder transactions.
(8)Net Investment Income, net realized and unrealized gain(loss) and ratio of net investment income to average net assets were restated.
54 
 

Leader Total Return Fund

 

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout Each Year Presented.

 

    Class A  
    Year Ended May 31,  
    2019     2018     2017     2016     2015  
                               
Net asset value, beginning of year   $ 9.68     $ 9.59     $ 9.33     $ 10.72     $ 11.34  
From investment operations:                                        
Net investment income(1)     0.16       0.25 (8)     0.28       0.44       0.42  
Net realized and unrealized gain (loss) on investments     0.44       0.12 (2,8)     0.24       (1.41 )     (0.46 )
Total from investment operations     0.60       0.37       0.52       (0.97 )     (0.04 )
Less distributions from:                                        
Net investment income     (0.24 )     (0.28 )     (0.22 )     (0.28 )     (0.42 )
Net realized gains                             (0.16 )
Return of capital                 (0.04 )     (0.14 )      
Total distributions     (0.24 )     (0.28 )     (0.26 )     (0.42 )     (0.58 )
Net asset value, end of year   $ 10.04     $ 9.68     $ 9.59     $ 9.33     $ 10.72  
Total return(3)     6.33 %(7)     3.89 %(7)     5.69 %     (9.06 )%     (0.31 )%
Net assets, end of year (000s)   $ 11,529     $ 952     $ 4,292     $ 10,027     $ 39,175  
Ratio of net expenses to average net assets including
dividend and interest expense(4)
    2.29 %     2.28 %     1.81 %     1.54 %     1.55 %(6)
Ratio of net expenses to average net assets:                                        
excluding dividends and interest expense(4)     2.29 %     2.20 %     1.77 %     1.54 %     1.52 %(6)
Ratio of net investment income to average net assets(4,5)     1.58 %     2.55 %(8)     2.94 %     4.44 %     3.86 %(6)
Portfolio Turnover Rate     397.79 %     535.81 %     175.53 %     208.59 %     173.78 %
                                         
(1)Per shares amounts calculated using the average share method, which appropriately presents the per share data for the year.
(2)Realized and unrealized gain/loss per share in this caption are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with aggregate gains and losses in the statement of operations due to the share transactions for the period.
(3)Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends and distributions, if any. Class A total return does not reflect the applicable sales load.
(4)The ratios shown do not include the Fund’s proportionate shares of the expenses of the underlying funds in which the Fund invests.
(5)Recognition of net investment income is affected by the timing and declaration of dividends by the underlying funds in which the Fund invests.
(6)Inclusive of Advisor’s recapture of waived/reimbursed fees from prior periods.
(7)Includes adjustments in accordance with accounting principles generally accepted in the United States and, consequently, the net asset value for financial reporting purposes and the returns based upon the net asset values may differ from the net asset values and returns for shareholder transactions.
(8)Net Investment Income, net realized and unrealized gain(loss) and ratio of net investment income to average net assets were restated.
55 
 

Leader Total Return Fund

 

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout Each Year Presented.

 

    Class C  
    Year Ended May 31,  
    2019     2018     2017     2016     2015  
                               
Net asset value, beginning of year   $ 9.76     $ 9.66     $ 9.40     $ 10.81     $ 11.43  
From investment operations:                                        
Net investment income(1)     0.14       0.23 (8)     0.24       0.39       0.37  
Net realized and unrealized gain (loss) on investments     0.41       0.10 (2,8)     0.24       (1.42 )     (0.46 )
Total from investment operations     0.55       0.33       0.48       (1.03 )     (0.09 )
Paid-in-capital from redemption fees                              
Less distributions from:                                        
Net investment income     (0.20 )     (0.23 )     (0.19 )     (0.25 )     (0.37 )
Net realized gains                             (0.16 )
Return of capital                 (0.03 )     (0.13 )      
Total distributions     (0.20 )     (0.23 )     (0.22 )     (0.38 )     (0.53 )
Net asset value, end of year   $ 10.11     $ 9.76     $ 9.66     $ 9.40     $ 10.81  
Total return(3)     5.78 %(7)     3.50 %(7)     5.16 %     (9.60 )%     (0.77 )%
Net assets, end of year (000s)   $ 871     $ 1,256     $ 2,334     $ 5,712     $ 13,021  
Ratio of net expenses to average net assets including
dividend and interest expense(4)
    2.96 %     2.78 %     2.31 %     2.04 %     2.05 %(6)
Ratio of net expenses to average net assets:                                        
excluding dividends and interest expense(4)     2.96 %     2.70 %     2.27 %     2.04 %     2.02 %(6)
Ratio of net investment income to average net assets(4,5)     1.32 %     2.39 %(8)     2.47 %     3.90 %     3.36 %(6)
Portfolio Turnover Rate     397.79 %     535.81 %     175.53 %     208.59 %     173.78 %
                                         
(1)Per shares amounts calculated using the average share method, which appropriately presents the per share data for the year or period.
(2)Realized and unrealized gain/loss per share in this caption are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with aggregate gains and losses in the Statement of Operations due to the share transactions for the period.
(3)Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends and distributions, if any.
(4)The ratios shown do not include the Fund’s proportionate shares of the expenses of the underlying funds in which the Fund invests.
(5)Recognition of net investment income is affected by the timing and declaration of dividends by the underlying funds in which the Fund invests.
(6)Inclusive of Advisor’s recapture of waived/reimbursed fees from prior periods.
(7)Includes adjustments in accordance with accounting principles generally accepted in the United States and, consequently, the net asset value for financial reporting purposes and the returns based upon the net asset values may differ from the net asset values and returns for shareholder transactions.
(8)Net Investment Income, net realized and unrealized gain(loss) and ratio of net investment income to average net assets were restated.
56 
 

Leader High Quality Low Duration Bond Fund

 

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout Each Year/Period Presented.

 

    Investor Class  
                Period Ended  
    Year Ended May 31,     May 31,  
    2019     2018     2017(1)  
                   
Net asset value, beginning of year/period   $ 10.04     $ 10.02     $ 10.00  
From investment operations:                        
Net investment income(2)     0.24       0.23       0.06  
Net realized and unrealized gain on investments     0.02       0.02 (3)     0.01  
Total from investment operations     0.26       0.25       0.07  
Less distributions from:                        
Net investment income     (0.24 )     (0.23 )     (0.05 )
Total distributions     (0.24 )     (0.23 )     (0.05 )
Net asset value, end of year/period   $ 10.06     $ 10.04     $ 10.02  
Total return(4)     2.64 %     2.55 %(6)     0.68 %(5,6)
Net assets, end of year/period (000s)   $ 28,704     $ 13,622     $ 1,857  
Ratio of total expenses to average net assets before waiver/reimbursed     1.34 %     1.84 %     8.56 %(7)
Ratio of net expenses to average net assets     1.12 %     1.03 %     1.03 %(7)
Ratio of net investment income to average net assets     2.40 %     2.32 %     1.54 %(7)
Portfolio Turnover Rate     248.18 %     128.78 %     43.77 %(5)
                         
(1)The Fund commenced operations on December 30, 2016.
(2)Per shares amounts calculated using the average share method, which appropriately presents the per share data for the year/period.
(3)Realized and unrealized losses per share in this caption are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with aggregate gains and losses in the Statement of Operations due to the share transactions for the period.
(4)Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends and distributions, if any.
(5)Not annualized.
(6)Includes adjustments in accordance with accounting principles generally accepted in the United States and, consequently, the net asset value for financial reporting purposes and the returns based upon the net asset values may differ from the net asset values and returns for shareholder transactions.
(7)Annualized.
57 
 

Leader High Quality Low Duration Bond Fund

 

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout Each Year/Period Presented.

 

    Institutional Class  
                Period Ended  
    Year Ended May 31,     May 31,  
    2019     2018     2017(1)  
                   
Net asset value, beginning of year/period   $ 10.04     $ 10.03     $ 10.00  
From investment operations:                        
Net investment income(2)     0.27       0.27       0.08  
Net realized and unrealized gain on investments     0.04       0.01 (3)     0.01  
Total from investment operations     0.31       0.28       0.09  
Less distributions from:                        
Net investment income     (0.28 )     (0.27 )     (0.06 )
Total distributions     (0.28 )     (0.27 )     (0.06 )
Net asset value, end of year/period   $ 10.07     $ 10.04     $ 10.03  
Total return(4)     3.12 %     2.84 %(6)     0.94 %(5,6)
Net assets, end of year/period (000s)   $ 161,041     $ 55,680     $ 2,163  
Ratio of total expenses to average net assets before waiver/reimbursed     0.95 %     1.42 %     11.08 %(7)
Ratio of net expenses to average net assets     0.74 %     0.65 %     0.65 %(7)
Ratio of net investment income to average net assets     2.72 %     2.71 %     2.01 %(7)
Portfolio Turnover Rate     248.18 %     128.78 %     43.77 %(5)
                         
(1)The Fund commenced operations on December 30, 2016.
(2)Per shares amounts calculated using the average share method, which appropriately presents the per share data for the year/period.
(3)Realized and unrealized losses per share in this caption are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with aggregate gains and losses in the Statement of Operations due to the share transactions for the period.
(4)Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends and distributions, if any.
(5)Not annualized.
(6)Includes adjustments in accordance with accounting principles generally accepted in the United States and, consequently, the net asset value for financial reporting purposes and the returns based upon the net asset values may differ from the net asset values and returns for shareholder transactions.
(7)Annualized.
58 
 

PRIVACY NOTICE

LEADER FUNDS TRUST

March 2019

FACTS WHAT DOES LEADER FUNDS TRUST 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 depends on the product or service that you have with us. This information can include:

  • Social Security number and wire transfer instructions
  • account transactions and transaction history

·         investment experience and purchase history

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 customers’ personal information to run their everyday business.  In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Leader Funds Trust chooses to share; and whether you can limit this sharing.

 

Reasons we can share your personal information: Does Leader Funds Trust
share information?
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. NO We don’t share
For joint marketing with other financial companies. NO We don’t share
For our affiliates’ everyday business purposes - information about your transactions and records. NO We don’t share
For our affiliates’ everyday business purposes - information about your credit worthiness. NO We don’t share
For nonaffiliates to market to you NO We don’t share

 

QUESTIONS?   Call 1-(800) 711-9164
59 
 

 

 

What we do:
How does Leader Funds Trust 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.

 

Our service providers are held accountable for adhering to strict policies and procedures to prevent any misuse of your nonpublic personal information.

How does Leader Funds Trust collect my personal information?

We collect your personal information, for example, when you

·   open an account or deposit money

·   direct us to buy securities or direct us to sell your securities

·   seek advice about your investments

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.

·   Leader Funds Trust does not share with our affiliates.

Nonaffiliates

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

·   Leader Funds Trust 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 or services to you.

·   Leader Funds Trust doesn’t jointly market.

 

 

 

60 
 

Appendix A

 

Intermediary-Specific Sales Charge Waivers and Discounts

The availability of initial and contingent deferred sales charge waivers and discounts may depend on the particular financial intermediary or type of account through which you purchase or hold Fund shares. Financial intermediaries may have different policies and procedures regarding the waivers and discounts set forth in this Appendix. These sales charge waivers and/or discounts are implemented and administered by the applicable financial intermediary.

 

In all instances, it is an investor’s responsibility to notify the financial intermediary of any facts that may qualify the investor for sales charge waivers or discounts. These waivers or discounts (and their terms and availability) may vary from those disclosed elsewhere in the Prospectus and are subject to change at any time. You may wish to contact your financial intermediary for more information regarding the sales charge waivers and discounts available to you and the intermediary’s related policies and procedures, including with respect to eligibility requirements, and to ensure that you have the most current information regarding waivers and discounts available to you.

 

Raymond James & Associates, Inc., Raymond James Financial Services, Inc. and each entity's affiliates (“Raymond James”)

 

Shareholders Purchasing Fund Shares Through Raymond James

 

Effective March 1, 2019, shareholders purchasing fund shares through a Raymond James platform or account, or through an introducing broker-dealer or independent registered investment adviser for which Raymond James provides trade execution, clearance, and/or custody services, will be eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in this Fund’s prospectus or SAI.

 

Front-end Sales Charge Waivers on Class A Shares available at Raymond James

 

   
Shares purchased in an investment advisory program.

 

   
Shares purchased within the same fund family through a systematic reinvestment of capital gains and dividend distributions.

 

   
Employees and registered representatives of Raymond James or its affiliates and their family members as designated by Raymond James.

 

   
Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within 90 days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (known as Rights of Reinstatement).

 

   
A shareholder in the Fund’s Class C shares will have their shares converted at net asset value to Class A shares (or the appropriate share class) of the Fund if the shares are no longer subject to a CDSC and the conversion is in line with the policies and procedures of Raymond James.

 

CDSC Waivers on Classes A, B and C shares available at Raymond James

 

   
Death or disability of the shareholder.

 

   
Shares sold as part of a systematic withdrawal plan as described in the Fund’s prospectus.

 

   
Return of excess contributions from an IRA Account.

 

   
Shares sold as part of a required minimum distribution for IRA and retirement accounts due to the shareholder reaching age 70½ as described in the Fund’s prospectus.

 

   
Shares sold to pay Raymond James fees but only if the transaction is initiated by Raymond James.

 

   
Shares acquired through a right of reinstatement.

 

Front-end load discounts available at Raymond James: breakpoints, and/or Rights of Accumulation, and/or Letters of Intent

 

   
Breakpoints as described in this prospectus.

 

   
Rights of accumulation which entitle shareholders to breakpoint discounts will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Raymond James. Eligible fund family assets not held at Raymond James may be included in the calculation of rights of accumulation calculation only if the shareholder notifies his or her financial advisor about such assets.

 

   
Letters of intent which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Raymond James may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such assets.
61 
 

 

 

 

Leader Short Duration Bond Fund

Leader Total Return Fund

Leader High Quality Low Duration Bond Fund

Leader Government Bond Fund


Advisor

Leader Capital Corp.

315 W. Mill Plain Blvd., Suite 204

Vancouver, WA 98660

Distributor

Ceros Financials Services, Inc.

1445 Research Boulevard, Suite 530

Rockville, MD 20850

Legal Counsel

Practus, LLP

11300 Tomahawk Creek Parkway, Suite 310

Leawood, KS 66211

Transfer Agent Gemini Fund Services, LLC
17645 Wright Street, Suite 200
Omaha, NE  68130
Custodian

Fifth Third Bank

38 Fountain Square Plaza

Cincinnati, OH 45202

Independent Registered Public Accounting Firm

BBD, LLP

1835 Market Street, 3rd FLR

Philadelphia, PA 19103

 

Additional information about the Funds is included in the Funds’ Statement of Additional Information dated October 1, 2019 (the “SAI”). The SAI is incorporated into this Prospectus by reference (i.e., legally made a part of this Prospectus). The SAI provides more details about the Funds’ policies and management. Additional information about the Funds’ investments will be available in the Funds’ Annual and Semi-Annual Reports to Shareholders. In the Funds’ Annual Report, you will find a discussion of the market conditions and investment strategies that significantly affected the Funds’ performance during its most recent fiscal year.

 

To obtain a free copy of the SAI and the Annual and Semi-Annual Reports to Shareholders (when available), or other information about the Funds, or to make shareholder inquiries about the Funds, please call 1-800-711-9164 or visit http://www.leadercapital.com. You may also write to:

 

Leader Short Duration Bond Fund

Leader Total Return Fund

Leader High Quality Low Duration Bond Fund

Leader Government Bond Fund

c/o Gemini Fund Services, LLC

17645 Wright Street, Suite 200

Omaha, Nebraska 68130

 

You may review and obtain copies of the Funds’ information (including the SAI) at the SEC Public Reference Room in Washington, D.C. Please call 1-202-551-8090 for information relating to the operation of the Public Reference Room. Reports and other information about the Funds are available on the EDGAR Database on the SEC’s Internet site at http://www.sec.gov. Copies of the information may be obtained, after paying a duplicating fee, by electronic request at the following E-mail address: publicinfo@sec.gov, or by writing the Public Reference Section, Securities and Exchange Commission, 100 F Street, N.E. Washington, D.C. 20549-0102.

 

 

Investment Company Act File Number: 811-23419

 

 
 

 


 

 LEADER SHORT DURATION BOND FUND

INSTITUTIONAL SHARES: LCCIX

INVESTOR SHARES: LCCMX

CLASS A SHARES: LCAMX

CLASS C SHARES: LCMCX

 

 LEADER TOTAL RETURN FUND

INSTITUTIONAL SHARES: LCTIX

INVESTOR SHARES: LCTRX

CLASS A SHARES: LCATX

CLASS C SHARES: LCCTX

 

LEADER HIGH QUALITY LOW DURATION BOND FUND

(formerly, Leader Floating Rate Fund)

INSTITUTIONAL SHARES: LFIFX

INVESTOR SHARES: LFVFX

 

LEADER GOVERNMENT BOND FUND

INSTITUTIONAL SHARES:

INVESTOR SHARES:

 

Each a Series of Leader Funds Trust (the “Trust”)

 


 

STATEMENT OF ADDITIONAL INFORMATION

 

April __, 2020

 

This Statement of Additional Information (“SAI”) is not a Prospectus and should be read in conjunction with the Prospectus of the Leader Short Duration Bond Fund, Leader Total Return Fund, and Leader High Quality Low Duration Bond Fund (each a “Fund” and together the “Funds”) dated January 2, 2020. You can obtain copies of the Funds’ Prospectus, without charge by contacting the Funds’ Transfer Agent, Gemini Fund Services, LLC, 17645 Wright Street, Suite 200, Omaha, Nebraska 68130 or by calling 1-800-711-9164. Leader Capital Corp. (the “Advisor” or “Leader”) is the investment advisor to the Funds. You may also obtain a prospectus by visiting our website at www.LeaderCapital.com.

 

Each Fund is the successor to a corresponding series within the Northern Lights Fund Trust that was managed by the Advisor and reorganized into the Fund (each a “Predecessor Fund” and together, the Predecessor Funds”). The audited financial statements of the Predecessor Funds and the related report of the Predecessor Funds’ independent registered public accounting firm for the fiscal year ended May 31, 2019 appearing in the Predecessor Funds’ annual report to shareholders and the Predecessor Funds’ semi-annual reported dated November 30, 2018, are incorporated herein by reference. A copy of the annual report and semi-annual report for the Predecessor Funds may be obtained upon request and without charge by calling 1-800-711-9164.

 

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES

 
 

EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF SUCH STATE. 

 
 

TABLE OF CONTENTS

 

THE FUNDS 1
TYPES OF INVESTMENTS 2
INVESTMENT RESTRICTIONS 34
POLICIES AND PROCEDURES FOR DISCLOSURE OF PORTFOLIO HOLDINGS 36
MANAGEMENT 37
CONTROL PERSONS AND PRINCIPAL HOLDERS 41
INVESTMENT ADVISOR 45
DISTRIBUTION OF FUND SHARES 48
PORTFOLIO MANAGER 51
ALLOCATION OF PORTFOLIO BROKERAGE 52
PORTFOLIO TURNOVER 53
OTHER SERVICE PROVIDERS 53
DESCRIPTION OF SHARES 56
ANTI-MONEY LAUNDERING PROGRAM 57
PURCHASE, REDEMPTION AND PRICING OF SHARES 57
TAXES 61
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 72
LEGAL COUNSEL 72
FINANCIAL STATEMENTS 73
APPENDIX A -- PROXY VOTING POLICIES 74
APPENDIX B- DESCRIPTION OF BOND RATINGS 77
 
 

THE FUNDS


     

The Trust was organized as a Delaware statutory trust on February 1, 2019 and is registered with the U.S. Securities and Exchange Commission (“SEC”) as an open-end investment management company. The Trust is authorized to offer an unlimited number of shares of beneficial interest, which may be divided into different series and classes. Each Fund is a diversified series of the Trust. The Trust is governed by its Board of Trustees (the “Board” or “Trustees”). Each Fund may issue an unlimited number of shares of beneficial interest. All shares of the Funds have equal rights and privileges. Each share of a Fund is entitled to one vote on all matters as to which shares are entitled to vote. In addition, each share of a Fund is entitled (i) to participate equally with other shares in dividends and distributions declared by the Fund and (ii) upon liquidation to its proportionate share of the assets remaining after satisfaction of outstanding liabilities. Shares of a Fund are fully paid, non-assessable and fully transferable when issued and have no pre-emptive, conversion or exchange rights. Fractional shares have proportionately the same rights, including voting rights, as are provided for a full share.

 

On July 15, 2019, the Funds listed below acquired all the assets and liabilities of a corresponding series of the Northern Lights Fund Trust, as identified below (each, a “Predecessor Fund”).

 

PREDECESSOR FUND FUND
Leader Short Duration Bond Fund – Institutional Shares Leader Short Duration Bond Fund – Institutional Shares
Leader Short Duration Bond Fund – Investor Shares Leader Short Duration Bond Fund – Investor Shares
Leader Short Duration Bond Fund – Class A Shares Leader Short Duration Bond Fund – Class A Shares
Leader Short Duration Bond Fund – Class C Shares Leader Short Duration Bond Fund – Class C Shares
   
Leader Total Return Fund – Institutional Shares Leader Total Return Fund – Institutional Shares
Leader Total Return Fund – Investor Shares Leader Total Return Fund – Investor Shares
Leader Total Return Fund – Class A Shares Leader Total Return Fund – Class A Shares
Leader Total Return Fund – Class C Shares Leader Total Return Fund – Class C Shares
   
Leader High Quality Low Duration Bond Fund – Institutional Shares Leader High Quality Low Duration Bond Fund – Institutional Shares
Leader High Quality Low Duration Bond Fund – Investor Shares Leader High Quality Low Duration Bond Fund – Investor Shares

 

Each of the Funds listed in the table adopted the prior performance and financial history of its corresponding Predecessor Fund. Accordingly, all performance and other information shown for the Funds for periods prior to the date of this SAI is that of the corresponding Predecessor Funds.

 

Leader Short Duration Bond Fund and Leader Total Return Fund consists of four classes of shares. Leader High Quality Low Duration Bond Fund and Leader Government Bond Fund consists of two classes of shares. Each Fund’s investment objective, restrictions and policies are more fully described here and in Prospectus. The Board may start other series and offer shares of a new fund under the Trust at any time.

 

Under the Trust’s Agreement and Declaration of Trust, each Trustee will continue in office until the termination of the Trust or his/her earlier death, incapacity, resignation or removal. Shareholders can remove a Trustee to the extent provided by the Investment Company Act of 1940, as amended (the “1940 Act”) and the rules and regulations promulgated thereunder. Vacancies may be filled by a majority of the remaining Trustees, except insofar as the 1940 Act may require the election by shareholders. As a result, normally no annual or regular meetings of shareholders will be held unless matters arise requiring a vote of shareholders under the Agreement and Declaration of Trust or the 1940 Act.

 

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TYPES OF INVESTMENTS


 

The investment objective of each Fund and a description of its principal investment strategies are set forth under “Risk/Return Summary” in the Prospectus. Each Fund’s investment objective is not fundamental and may be changed without the approval of a majority of the outstanding voting securities of the Trust.

 

The following pages contain more detailed information in which the Advisor may employ in pursuit of each Fund’s investment objective and a summary of related risks. To the extent that a type of investment is not disclosed in the Principal Investment Strategies section of the Funds’ prospectus, such type of investment is not used as a principal strategy for the Funds.

 

A.            Asset-Backed Debt Obligations and Mortgage-Backed Securities.  Asset-backed debt obligations represent direct or indirect participation in, or are secured by and payable from, assets such as motor vehicle installment sales contracts, other installment loan contracts, home equity loans, leases of various types of property and receivables from credit card or other revolving credit arrangements.  The credit quality of most asset-backed securities depends primarily on the credit quality of the assets underlying such securities, how well the entity issuing the security is insulated from the credit risk and bankruptcy of the originator or any other affiliated entities and the amount and quality of any credit enhancement of the securities.  Payments or distributions of principal and interest on asset-backed debt obligations may be supported by non-governmental credit enhancements including letters of credit, reserve funds, over-collateralization and guarantees by third parties.  The market for privately issued asset-backed debt obligations is smaller and less liquid than the market for government sponsored mortgage-backed securities.

 

Mortgage-backed securities represent direct or indirect participations in, or are secured by and payable from, mortgage loans secured by real property, and include single- and multi-class pass-through securities and Collateralized Mortgage Obligations (“CMOs”).  Such securities may be issued or guaranteed by U.S. Government agencies or instrumentalities, such as the Government National Mortgage Association and the Federal National Mortgage Association, or by private issuers, generally originators and investors in mortgage loans, including savings associations, mortgage bankers, commercial banks, investment bankers and special purpose entities (collectively, “private lenders”).  Mortgage-backed securities issued by private lenders may be supported by pools of mortgage loans or other mortgage-backed securities that are guaranteed, directly or indirectly, by the U.S. Government or one of its agencies or instrumentalities, or they may be issued without any governmental guarantee of the underlying mortgage assets but with some form of non-governmental credit enhancement.

 

The rate of principal payment on mortgage- and asset-backed securities generally depends on the rate of principal payments received on the underlying assets, which in turn may be affected by a variety of economic and other factors.  As a result, the yield on any mortgage- or asset-backed security is difficult to predict with precision and actual yield to maturity may be more or less than the anticipated yield to maturity.  The yield characteristics of mortgage- and asset-backed debt obligations differ from those of traditional debt obligations.  Among the principal differences are that interest and principal payments are made more frequently on mortgage- and asset-backed debt obligations, usually monthly, and that principal may be prepaid at any time because the underlying assets generally may be prepaid at any time.  As a result, if these debt obligations or securities are purchased at a premium, a prepayment rate that is faster than expected will reduce yield to maturity, while a prepayment rate that is slower than expected will have the opposite effect of increasing the yield to maturity.  Conversely, if these debt obligations or securities are purchased at a discount, a prepayment rate that is faster than expected will increase yield to maturity, while a prepayment rate that is slower than expected will reduce yield to maturity.  Mortgage-backed securities available for reinvestment by a Fund are likely to be greater during a period of declining interest rates and, as a result, are likely to be reinvested at lower interest rates than during a period of rising interest rates.  Accelerated prepayments on debt obligations or securities purchased at a premium also impose a risk of loss of principal because the premium may not have been fully amortized at the time the principal is prepaid in full.  The market for privately issued mortgage-backed securities is smaller and less liquid than the market for government-sponsored mortgage-backed securities.

 

While asset-backed securities may be issued with only one class of security, many asset-backed securities are issued in more than one class, each with different payment terms.  Mortgage-backed securities may be issued with either a single class of security or multiple classes, which are commonly referred to as a CMO.  Multiple class mortgage- and asset-backed securities are issued for two main reasons.  First, multiple classes may be used as a method of providing

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selective credit support.  This is accomplished typically through creation of one or more classes whose right to payments on the asset-backed security is made subordinate to the right to such payments of the remaining class or classes.  Second, multiple classes may permit the issuance of securities with payment terms, interest rates or other characteristics differing both from those of each other and from those of the underlying assets.  Examples include separate trading of registered interest and principal of securities (“STRIPS”) (mortgage- and asset-backed securities entitling the holder to disproportionate interests with respect to the allocation of interest and principal of the assets backing the security), and securities with class or classes having characteristics that mimic the characteristics of non-asset-backed securities, such as floating interest rates (i.e., interest rates that adjust as a specified benchmark changes) or scheduled amortization of principal.

 

The Funds may invest in stripped mortgage-backed securities, which receive differing proportions of the interest and principal payments from the underlying assets, including interest-only (“IO”) and principal-only (“PO”) securities.  IO and PO mortgage-backed securities may be illiquid.  The market value of such securities generally is more sensitive to changes in prepayment and interest rates than is the case with traditional mortgage-backed securities, and in some cases such market value may be extremely volatile. IO securities involve greater uncertainty regarding the return on investment.  An interest only security is not entitled to any principal payments. If the mortgage assets in a pool prepay or default at rapid rates, it may reduce the amount of interest available to pay a related interest only security and may cause an investor in that interest only security to fail to recover the investor's initial investment

 

Mortgage- and asset-backed securities backed by assets, other than as described above, or in which the payment streams on the underlying assets are allocated in a manner different than those described above may be issued in the future. The Funds may invest in such mortgage- and asset-backed securities if such investment is otherwise consistent with its investment objectives and policies and with the investment restrictions of each Fund.

 

If a Fund purchases mortgage- or asset-backed securities that are “subordinated” to other interests in the same mortgage pool, the Fund as a holder of those securities may only receive payments after the pool’s obligations to other investors have been satisfied.  An unexpectedly high rate of defaults on the mortgages held by a mortgage pool may substantially limit the pool’s ability to make payments of principal or interest to the Fund as a holder of such subordinated securities, reducing the values of those securities or in some cases rendering them worthless; the risk of such defaults is generally higher in the case of mortgage pools that include so called “subprime” mortgages.  An unexpectedly high or low rate of prepayments on a pool’s underlying mortgages may have a similar effect on subordinated securities.  A mortgage pool may issue securities subject to various levels of subordination; the risk of non-payment affects securities at each level, although the risk is greater in the case of more highly subordinated securities.

  

 B.            Auction Rate Securities.  Auction Rate Securities (“ARS”) are long-term, variable-rate bonds tied to short-term interest rates.  ARS have a long-term nominal maturity with interest rates reset through a modified Dutch auction, at pre-determined short-term intervals, usually, 7, 28 or 35 days.  ARS trade at par and are “callable” (the issuer can require the bondholder to sell the bond back to the issuer) at par on any interest payment date.  Common issuers of ARS include municipalities, non-profit hospitals, utilities, housing finance agencies, student loan finance authorities and universities.  Credit risk associated with ARS is similar to the default risk associated with other municipal and corporate bond issuers.  Bond insurance is usually used to lower the credit risk of ARS.  Although very infrequent, and almost always due to a dramatic decline in the credit quality of the issuers, ARS would be subject to liquidity risk if the auction process used to reset the interest rates failed because there were more orders to sell the ARS than bids to purchase the ARS.  If an auction process failed, existing holders of ARS would have to continue to hold their ARS until there were a sufficient number of bids to purchase the ARS at the next auction to calculate the interest rate reset.

 

C.             Cash Management. The Funds may invest directly in cash, ARS and other short-term fixed-income securities.  All money market instruments can change in value when interest rates or an issuer’s creditworthiness change dramatically.

 

D.             Closed-End Investment Companies. Each Fund may invest its assets in "closed-end" investment companies (or "closed-end funds"), subject to the investment restrictions set forth above. Shares of closed-end funds are typically offered to the public in a one-time initial public offering by a group of underwriters who retain a spread or underwriting commission of between 4% or 6% of the initial public offering price. Such securities are then listed

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for trading on an exchange such as the New York Stock Exchange or the National Association of Securities Dealers Automated Quotation System (commonly known as "NASDAQ") and, in some cases, may be traded in other over-the-counter markets. Because the shares of closed-end funds cannot be redeemed upon demand to the issuer like the shares of an open-end investment company (such as the Funds), investors seek to buy and sell shares of closed-end funds in the secondary market.

 

Each Fund generally will purchase shares of closed-end funds only in the secondary market. A Fund will incur normal brokerage costs on such purchases similar to the expenses the Fund would incur for the purchase of securities of any other type of issuer in the secondary market. A Fund may, however, also purchase securities of a closed-end fund in an initial public offering when, in the opinion of the Adviser, based on a consideration of the nature of the closed-end fund's proposed investments, the prevailing market conditions and the level of demand for such securities, they represent an attractive opportunity for growth of capital. The initial offering price typically will include a dealer spread, which may be higher than the applicable brokerage cost if a Fund purchased such securities in the secondary market.

 

The shares of many closed-end funds, after their initial public offering, frequently trade at a price per share that is less than the net asset value per share, the difference representing the "market discount" of such shares. This market discount may be due in part to the investment objective of long-term appreciation, which is sought by many closed-end funds, as well as to the fact that the shares of closed-end funds are not redeemable by the holder upon demand to the issuer at the next determined net asset value, but rather are subject to the principles of supply and demand in the secondary market. A relative lack of secondary market purchasers of closed-end fund shares also may contribute to such shares trading at a discount to their net asset value.

 

Each Fund may invest in shares of closed-end fu