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Tealeaf Long/Short Deep Value Fund prospectus

edited September 2013 in Fund Discussions
Fund has a load. Class A Shares (LEFAX), Class C Shares (LEAFX), and Class I Shares (LEFIX).

http://www.sec.gov/Archives/edgar/data/1555919/000116204413001057/tealeaf497201309.htm

Excerpt:

PRINCIPAL INVESTMENT STRATEGIES:

The Fund invests in long positions in equity securities of American and Canadian companies identified by the Fund's investment adviser (AMH Equity, Ltd. or "AMH") as undervalued and takes short positions in equity securities that AMH has identified as overvalued. The Fund invests, both long and short, primarily in securities principally traded in the United States markets. AMH will determine the size of each long or short position by analyzing the tradeoff between the attractiveness of each position and its impact on the risk of the overall portfolio. AMH examines various factors in determining the value characteristics of such issuers including net cash per share, price-to-sales ratios, price-to-tangible book value ratios and price-to-earnings ratios. These value characteristics are examined in the context of the issuer's operating and financial fundamentals such as length of operating history, return on equity, earnings growth and cash flow growth. AMH generally meets with company management at investment conferences, through site visits or by teleconference, and often speaks with company suppliers, customers and/or competitors as part of its research process. Additionally, AMH screens securities for the Fund based on a continuous study of trends in industries and company-specific earnings, cash flow power and growth of sales and earnings per share. AMH may buy index-based exchange traded funds ("ETFs") to gain market exposure. Additionally, AMH may also sell short ETFs or buy inverse ETFs, including leveraged inverse ETFs, to hedge overall equity market risk when it believes market conditions are unfavorable.

The Fund may invest up to 20% of its total assets in equity securities of companies located outside of the U.S. or Canada through American Depositary Receipts ("ADRs") traded on a U.S. exchange and through equity securities traded on a foreign exchange outside of the U.S. or Canada. AMH selects equity securities without restriction as to market capitalization, although it anticipates that a significant portion of the Fund's assets will be invested in long positions in equity securities of smaller issuers (issuers with a market capitalization below $1.5 billion at the time of investment). The Fund may invest a large percentage of its assets in a few sectors, such as information technology, healthcare, energy/alternative energy, consumer cyclicals, and industrials. When AMH believes market conditions are appropriate, the Fund may borrow money from banks to make additional portfolio investments. The Fund may borrow an amount equal to as much as one-third of the value of its total assets (which includes the amount borrowed). The Fund may purchase put and call options on equity securities, equity indexes and ETFs as substitutes for the underlying instrument or index, to hedge its portfolio, to manage risk or to obtain market exposure. To generate additional returns, the Fund may also write "covered" call options on equity securities and ETFs it owns and on equity indexes that are expected to have return characteristics substantially similar to the Fund's portfolio.

The Fund intends, under normal circumstances, to maintain at least 65% net exposure (longs (other than inverse ETFs) minus shorts (including inverse ETFs)) to equity securities. Additionally, under normal circumstances, AMH expects that the Fund's gross exposure to equity securities will not exceed 150% of the Fund's net assets. The Fund defines gross exposure as the value of longs plus shorts plus options as a percentage of the Fund’s net assets. The Fund generally restricts short positions to 75% of net assets and long positions to 120% of net assets. AMH will not take a greater than 10% position at cost, and will generally keep position size at or below 15% through sales or other portfolio management techniques.

AMH sells a long position when a price target is reached, fundamentals have deteriorated or more attractive investments are available. AMH may also sell a position to adjust the Fund's net exposure to equity securities or to implement its hedging strategy. AMH covers (buys back) short positions when a price target is reached, fundamentals have improved or more attractive short positions are available or it believes hedging is no longer attractive. AMH closes out written call options when a price target is reached, fundamentals have improved or more attractive call options are available.



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