Sherwood Forest Long/Short Fund | Ticker Symbols SFCMX SFCPX

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Sherwood Forest Bi-Weekly Report | Market Commentary

Posted on February 21, 2012 by Investment Team

The market environment has completely changed from the volatile, trendless environment in 2011 to a low volatility trending one in the beginning of 2012. Informal research since the turn of the calendar reveals that the last three years have been the worst environment for trend followers for many years. The Managed Futures Category, which is a collection of diversified Trend Following strategies, suggests that it was the worst three year period since the inception of their index, dating back to 1994. Some will read this anecdotal evidence and suggest that Trend Following, as an investment strategy is dead. And it will not be the first time that short sighted investors have written off this proven long term strategy.

If an investor was to combine two important investment concepts; that being “Trend Following” and “Contrarian Investing,” it would suggest that after coming out of a period of underperformance with a long term successful investment strategy, an investor would be positioning themselves in a favorable risk/reward in regards to the timing of such a strategy.

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Important Disclosure Performance data quoted represents past performance; the Fund's past performance does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-800-673-0550.

Investors should consider the Fund's investment objectives, potential risks, management fees and charges and expenses carefully before investing. This and other information is contained in the Fund’s prospectus, which may be obtained by calling 1-800-673-0550. Please read the prospectus carefully before investing. Distributed by First Dominion Capital Corp., Richmond, VA. Member FINRA.

Important Disclosure About Risk There are risks associated with this Fund that may differ from other funds. Since the Fund invests in ETFs, the Fund will be subject to substantially the same risks as those associated with the direct ownership of the securities comprising the index on which the ETF is based and the value of the Fund’s investment will fluctuate in response to the performance of the underlying index. When investing “short”, the Fund may utilize enhanced ETFs, which are composed of various derivatives, designed to profit from a decline in the value of an underlying benchmark. As such, the portfolio is exposed to short sales risk and derivatives risk. Because the market price of a security sold short could increase without limit, the Fund could be subject to a theoretically unlimited loss. Further, because derivative instruments may be purchased by the Fund or an underlying ETF for a fraction of the market value of the investments underlying such instruments, a relatively small price movement in the underlying security may result in an immediate and substantial gain or loss to the Fund or underlying ETF. Derivatives are often more volatile than other investments and the Fund or underlying ETF may lose more in a derivative than it originally invested in it. Additionally, to the extent the Fund invests in enhanced ETFs that seek to provide investment results that match a negative multiple of the performance of an underlying index, the Fund will indirectly be subject to the risk that the performance of such enhanced ETF will fall as the performance of that enhanced ETFs benchmark rises – a result that is opposite from traditional mutual funds. The Fund may experience portfolio turnover between 500% and 700% on an annualized basis. High portfolio turnover rates could result in an increase of brokerage commissions and increased expenses to the Fund, which could negatively impact Fund performance. High portfolio turnover could also result in an increase in taxable capital gains distributions to the Fund’s shareholders. The Fund may also invest in foreign securities, which may involve financial, economic or political risks that are not ordinarily associated with investments in U.S. securities. Each of the preceding risks is discussed in the prospectus. Any hyperlinks on this website are provided as a convenience and we disclaim any responsibility for information, services or products found on websites linked hereto. Information on this web site is directed toward U.S residents only. This site and any information herein does not constitute an offer to sell, or the solicitation of an offer to buy any securities and must not be relied upon in connection with any investment decision.

This site and any information herein does not constitute an offer to sell, or the solicitation of an offer to buy any securities and must not be relied upon in connection with any investment decision.

Definition of the S&P 500 Index: A market-value weighted index of the 500 largest stocks in the US markets maintained by Standard & Poor Corporation. Generally considered to be a benchmark of the overall US stock market.

Definition of the Morningstar Managed Futures Mutual Fund Category: Group of mutual funds categorized and measured by Morningstar, a leading provider of data and analysis on mutual funds. Morningstar publishes reviews and commentary of mutual funds for individuals and corporations.

Definition of the IASG Trend Following Index: The Trend Following Index is based on the performance of roughly 275 investment programs which utilize Trend Following. IASG Indexes are generated daily based on CTA manager-supplied sector focus, investment strategy and performance. To participate in the IASG CTA index, a program must have a minimum track record of 3 year's performance. Other indexes require a minimum two year track record. Strategy-based indexes require the program's composition be more than 50% of the specific strategy.