OVERVIEW

The fund provides broad exposure to some of the fastest-growing economies around the world—the newest engines of economic growth. The strategy closely tracks the MSCI Frontier Markets Index, which helps to keep costs low, minimize operational risks and maximize access to liquidity.

THREE THINGS TO KNOW
  • Frontier markets offer rapid growth potential, attractive valuations and portfolio diversification.
  • The strategy aims to capitalize on the growth and potential of frontier markets, dampen risks and provide broad exposure in a simple, low-cost way.
  • The economic diversity of frontier economies results in lower correlations to more developed markets, such as the U.S., as well as to each other.
PROCESS

Objective: The fund seeks capital growth.

The fund tracks the broad index with the goal of addressing the “three Cs” (cost, complexity and capacity) while minimizing tracking error.

  • The fund uses total return swaps—an agreement whereby we receive the return stream from the index without actually owning the component securities—to increase portfolio efficiency while lowering trading costs.
  • The portfolio is weighted based on market capitalization, which increases exposure to more liquid names relative to thinly traded securities.
  • Keeping all holdings and transactions are in U.S. dollars helps minimize cost.

* The fund’s investment advisor is contractually obligated to waive a portion of its fees and reimburse other expenses until April 30, 2015, in amounts necessary to limit the fund’s operating expenses (exclusive of brokerage costs, interest, taxes, dividends, acquired fund fees and expenses, and extraordinary expenses) for Investor Class, Institutional Class and Advisor Class shares to an annual rate (as a percentage of the fund’s average daily net assets) of 1.29%, 0.99% and 0.99%, respectively. This expense limitation arrangement may not be terminated by the fund’s investment advisor prior to such date under any circumstances.

RISKS

There are risks involved with investing, including loss of principal. Past performance does not guarantee future results, share prices will fluctuate and you may have a gain or loss when you redeem shares.

Derivative instruments involve risks different from those associated with investing directly in securities and may cause, among other things, increased volatility and transaction costs or a fund to lose more than the amount invested.

Foreign securities, especially emerging or frontier markets, will involve additional risks including exchange rate fluctuations, social and political instability, less liquidity, greater volatility and less regulation.

Investing in a non-diversified fund involves the risk of greater price fluctuation than a more diversified portfolio.

Diversification does not assure profit or protect against risk.

Barclays Capital U.S. Aggregate Bond Index represents securities that are U.S. domestic, taxable and dollar denominated. The index covers the U.S. investment grade fixed-rate bond market, with index components for government and corporate securities, mortgage pass-through securities and asset-backed securities. These major sectors are subdivided into more specific indices that are calculated and reported on a regular basis.

Beta is a measure of risk which shows a fund’s volatility relative to its benchmark index.

Correlation is a statistical measure of the interdependence of two random variables that range in value from -1 to +1, indicating perfect negative correlation at -1, absence of correlation at zero and perfect positive correlation at +1.

MSCI Frontier Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of frontier markets.

MSCI EAFE (Europe, Australasia, and Far East) Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of 22 developed markets, excluding the U.S. and Canada.

MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets.

S&P 500 Index is an unmanaged index of 500 common stocks chosen to reflect the industries in the U.S. economy.

Standard deviation measures the degree to which a fund’s return varies from its previous returns or from the average of all similar funds.

Total return swap is a swap agreement in which one party makes payments based on a set rate, either fixed or variable, while the other party makes payments based on the return of an underlying asset, which includes both the income it generates and any capital gains.

Tracking error is a divergence between the price behavior of a position or a portfolio and the price behavior of a benchmark.

Valuation is the process of determining the value of an asset or company based on earnings and the market value of assets.

One cannot invest directly in an index.

Advisor Class shares are available only to fee-based advisory platforms and retirement plans via omnibus accounts.

Nathan Rowader and David Janec are registered representatives of ALPS Distributors, Inc.

Paul Broughton and Jim O’Donnell have earned the right to use the Chartered Financial Analyst designation. CFA Institute marks are trademarks owned by the CFA Institute.

David Janec has earned the right to use the Financial Risk Manager designation. The FRM designation is owned by GARP.

ADVISOR:Forward Management, LLC
Category:Global Exposure
Benchmark:MSCI Frontier Markets Index
Fund Details
TICKER FRNMX
Cusip 34987A574
Inception Date 12/31/2008
Share Class Institutional
Dividend Frequency Annual
Minimum investment $100,000
Benchmark MSCI Frontier Markets Index
Morningstar Category Diversified Emerging Mkts
© 2015 Morningstar, Inc. All rights reserved.
Expense Ratio as of 05/01/2014
Gross Net
1.26%* 1.01%*