DF Tactical 30 ETF

Donoghue Forlines LLC   |   125 High Street, Suite 220   |   Boston, MA 02110   |   1.800.642.4276

Past performance is no guarantee of future results. ETFs involve risk including possible loss of principal. An investor should consider the ETF’s investment objectives, risks, charges, and expenses carefully before investing. This and other information about the ETF is contained in the prospectus, which can be obtained by calling toll free 1-800-642-4276. Please read the prospectus carefully before investing.

The Donoghue Forlines ETFs are distributed by Northern Lights Distributors LLC, member FINRA/SIPC. Donoghue Forlines LLC is not affiliated with Northern Lights Distributors, LLC.

Important Risk Information

ETFs involve risks including possible loss of principal. There is no guarantee that any investment strategy will achieve its objectives, generate profits or avoid losses. The value of the fund’s shares, when redeemed, may be worth more or less than their original cost. While the shares of ETFs are tradeable on secondary markets, they may not readily trade in all market conditions and may trade at significant discounts in periods of market stress.  ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETF’s net asset value.  Brokerage commissions and ETF expenses will reduce returns. The ETF is newly formed and has limited operating history.

Equity Risk

The net asset value of the Fund will fluctuate based on changes in the value of the equity securities in which it invests. Equity prices can fall rapidly in response to developments affecting a specific company or industry, or to changing economic, political or market conditions.

ETF Structure Risk

The Fund is structured as an ETF and as a result is subject to the special risks, including:

• Not Individually Redeemable: Shares are not individually redeemable and may be redeemed by the Fund at NAV only in large blocks known as “Creation Units.” You may incur brokerage costs purchasing enough Shares to constitute a Creation Unit.
• Trading Issues: Trading in Shares on the Exchange may be halted due to market conditions or for reasons that, in the view of the Exchange, make trading in Shares inadvisable, such as extraordinary market volatility. There can be no assurance that Shares will continue to meet the listing requirements of the Exchange. An active trading market for the Fund’s shares may not be developed or maintained. If the Fund’s shares are traded outside a collateralized settlement system, the number of financial institutions that can act as authorized participants that can post collateral on an agency basis is limited, which may limit the market for the Fund’s shares. To the extent that those authorized participants exit the business or are unable to process creation or redemption orders and no other authorized participants are able to step forward to do so, there may be a significantly diminished trading market for the Fund’s shares. Purchases and redemptions of creation units that are made primarily with cash, rather than through in-kind delivery of portfolio securities may cause the Fund to incur additional costs including brokerage costs and taxable capital gains or losses that the Fund may not have incurred if the Fund had made redemptions in-kind. This could lead to differences between market price and underlying value of shares.
• Market Price Variance Risk: Individual Shares of the Fund that are listed for trading on the Exchange can be bought and sold in the secondary market at market prices. The market prices of Shares will fluctuate in response to changes in NAV and supply and demand for Shares. There may be times when the market price and the NAV vary significantly and you may pay more than NAV when buying Shares on the secondary market, and you may receive less than NAV when you sell those Shares. The market price of Shares, like the price of any exchange-traded security, includes a “bid-ask spread” charged by the exchange specialists, market makers or other participants that trade the particular security. In times of severe market disruption, the bid-ask spread often increases significantly. This means that Shares may trade at a discount to NAV and the discount is likely to be greatest when the price of Shares is falling fastest, which may be the time that you most want to sell your Shares. The Fund’s investment results are measured based upon the daily NAV of the Fund over a period of time. Investors purchasing and selling Shares in the secondary market may not experience investment results consistent with those experienced by those creating and redeeming directly with the Fund.

  In times of market stress, market makers may step away from their role market making in shares of ETFs and in executing trades, which can lead to differences between the market value of Fund shares and the Fund’s net asset value.

  The market price for the Fund’s shares may deviate from the Fund’s net asset value, particularly during times of market stress, with the result that investors may pay significantly more or significantly less for Fund shares than the Fund’s net asset value, which is reflected in the bid and ask price for Fund shares or in the closing price.

  When all or a portion of an ETFs underlying securities trade in a market that is closed when the market for the Fund’s shares is open, there may be changes from the last quote of the closed market and the quote from the Fund’s domestic trading day, which could lead to differences between the market value of the Fund’s shares and the Fund’s net asset value.

  In stressed market conditions, the market for the Fund’s shares may become less liquid in response to the deteriorating liquidity of the Fund’s portfolio. This adverse effect on the liquidity of the Fund’s shares may, in turn, lead to differences between the market value of the Fund’s shares and the Fund’s net asset value.

Index Construction Risk

The Fund’s Index, and consequently the Fund, may not succeed in its objective and may not be optimal in its construction, causing losses to a Fund.

Index Tracking Risk

Investment in the Fund should be made with the understanding that the securities in which the Fund invests will not be able to replicate exactly the performance of the index the Fund tracks because the total return generated by the securities will be reduced by transaction costs incurred in adjusting the actual balance of the securities. In addition, the securities in which the Fund invests will incur expenses not incurred by an index. Certain securities comprising the index tracked by the Fund may, from time to time, temporarily be unavailable, which may further impede the Fund’s ability to track an index.

Large Capitalization Company Risk

Large-cap companies may be unable to respond quickly to new competitive challenges, such as changes in technology and consumer tastes, and also may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Large-capitalization companies may be less able than smaller capitalization companies to adapt to changing market conditions. Large-capitalization companies may be more mature and subject to more limited growth potential compared with smaller capitalization companies. During different market cycles, the performance of large capitalization companies has trailed the overall performance of the broader securities markets.

Management Risk

The adviser’s decision to seek to follow the Fund’s designated index’s methodology in managing the Fund’s portfolio may prove to be incorrect and may not produce the desired results. Because the Fund seeks to track its designated index, the Fund may forego certain attractive investment opportunities available to an actively managed fund. In following the Fund’s designated index’s methodology, a Fund may hold fewer securities than other diversified funds. Accordingly, the Fund’s performance may be more sensitive to market changes than other diversified funds.

Definitions

DF Risk Managed Tactical Top 30 Index: The inclusion of the DF Risk Managed Tactical Top 30 Index is for comparison purposes only. The DF Risk-Managed Tactical Top 30 Index employs trade signals based on exponential moving averages (EMAs) of the Syntax US MegaCap 100 Total Return Index (Ticker: SY100G) to tactically alternate the Index’s allocation between equities chosen for their price momentum, and ETFs comprising short-term US Treasuries.

Syntax US MegaCap 100 Index: Syntax US MegaCap 100 Index float market cap-weights the 100 largest public US companies as ranked by their float market caps, subject to rank buffers and liquidity screens. Companies are defined as US according to Syntax’s proprietary country classification methodology considering regulatory filings, currencies of accounting and distribution, and tax havens.

Momentum Score: Momentum score investing is a strategy that identifies stocks with strong upward price trends using a quantitative score, often based on performance over the past three to twelve months, while excluding the most recent month to avoid short-term reversals.

Intermediate Price Momentum:  Intermediate-term price momentum is the tendency for stocks that have performed well (or poorly) over a medium-length time horizon to continue that performance in the near future. This time frame is typically defined as a lookback period of several months to a year.

Market Capitalization: Market capitalization (market cap) is the total value of a company’s outstanding shares, calculated by multiplying the current stock price by the total number of shares in circulation. Investors use market cap to gauge a company’s size, risk, and growth potential, often categorizing them as large-cap, mid-cap, or small-cap.

Tactical Overlay: Tactical overlay is a technique that uses trend following technical indicators to modify a portfolio’s risk and return characteristics.

Sleeve: In investing, a “sleeve” is a sub-account within a main custodial account, used to manage a portion of assets independently according to a specific strategy. This allows for separate management, rebalancing, and reporting for different investment goals, such as creating a liquidity sleeve for easy access to cash or using currency sleeves to manage foreign exchange risk for different investors.

Downside Risk: Downside risk is the potential for an investment to lose value, or the probability and magnitude of negative returns. It focuses specifically on losses below a certain threshold, such as a target return or zero, and is a key concept for investors looking to protect capital.