Day Hagan/Ned Davis Research
Smart Sector® International

The Day Hagan/Ned Davis Research Smart Sector® International strategy’s investment objective is total return, consisting of capital appreciation and income.

The strategy is actively managed using proprietary investment models co-developed with Ned Davis Research (NDR). The models seek to quantify the risk vs. reward profile for each region and the broader markets.

Under normal market conditions:

• The strategy will invest indirectly through ETFs, primarily in companies located in multiple countries outside the United States.

• The strategy utilizes NDR’s region-specific models and rankings to determine its target allocation to each country and regional location.

• The models and rankings are designed to evaluate each region's fundamental, technical, economic, and behavioral indicators, such as a region’s GDP growth, inflation levels, money supply, equity valuations, valuation, analysts’ earnings expectations, technical market trends, and overall investor sentiment.

• The indicators for each region focus on each region's risk/reward characteristics with the goal of investing in the regions with the highest probability of maximizing total return.

• By combining multiple and diverse indicators, the composite models seek to objectively assess the weight of the evidence and generate geographic allocation recommendations.

The strategy’s risk management model, the NDR Catastrophic Stop Model, defines the strategy’s overall target equity allocation. The allocation to cash may be raised in the event the NDR Catastrophic Stop model generates a sell signal. The model seeks to gauge the equity market’s risk profile, raise cash during periods of severe market stress, and stay invested when risks are defined as low to neutral. The NDR Catastrophic Stop model quantitatively defines the potential risk level of the factors influencing the equity markets.

• Benchmark: The strategy will attempt to exceed returns of the MSCI ACWI ex USA Index by overweighting and underweighting its exposure to geographic locations relative to the Index and may also invest in geographic regions not represented in the Index.

• Risk Management: The strategy may reduce its overall exposure to ETFs from time to time as determined by its risk management model.