Centre Active U.S. Treasury Fund

Total Return Focus

Active Duration Management

Potential for Capital Appreciation/Preservation

in Variable Interest Rate Environments

Proprietary Interest Rate Forecasting Process

Fund Profile: Summary

Investment Objective :

The Fund seeks to maximize investor’s total return through capital appreciation andcurrent income

Investment Strategy Highlights:

Proprietary Interest Rate Forecasting Process – Combining fundamental analysisof economic factors and technical factors/investor psychology

Monthly optimization and rebalance – Seeks to capture general cyclical trend ininterest rates while allowing the potential to benefit from short-term deviations intrend

Expands sources of return beyond credit plays – Seeks to take advantage of ratechanges through active duration management, utilizes US Treasury securities only

Not permanently bullish/bearish – Investors can benefit from timely tacticalresponses to fundamental changes in market conditions

Designed to offer potential capital appreciation/preservation in various interestrate environments

2

Fund Profile: Fund Manager

T. Kirkham Barneby, T. Kirkham Barneby is responsible for the management of the

Active U.S. Treasury Fund and Active U.S. Tax Exempt Fund. Mr. Barneby serves as

Investment Director, Fixed Income of the Adviser. Prior to joining the Adviser in 2014,

Mr. Barneby served as Senior Managing Director and Portfolio Manager at Hudson

Canyon Investment Counselors, LLC, where he was responsible for managing private

account clients in the Active Interest Rate Management strategy. Prior to that, Mr.

Barneby held the title of Chief Strategist & Portfolio Manager, Taxable Fixed Income at

American Independence Financial Services. Prior to AIFS, Mr. Barneby was a

Managing Member of Old Iron Hill Capital Management, LLC employing

quantitatively-oriented fixed income and multi-strategy investment approaches.

Previously, he headed an investment group at UBS in New York that managed equity

and bond portfolios with roughly $7 billion in assets. Mr. Barneby is a graduate of

Southwest Missouri State College—now Missouri State University—with a Bachelor

of Science Degree in Mathematics and Economics. Subsequently, he completed all

course and exam requirements for a Doctorate in Economics at Oklahoma State

University. He is a National Science, NDEA and Woodrow Wilson Fellow.

3

Investment Process: Active Duration Management

Fundamentally-Driven Model

I. Economic Outlook

Employment

Production

Economic Growth

II. Inflationary Expectations

Commodity Prices

Inflation Measures

III. Investor Psychology

(Overbought/Oversold)

Technical measures of market

fluctuations not explained by

Economic Outlook and Inflation

Interest Rate Trends

Model Outlook and Target Duration Scenarios

Outlook Portfolio Construction

Scenario

Fully Bullish

Bullish

Neutral

Bearish

Fully Bearish

Implied TargetYield Shift Duration Implementation

+ 11 years

+ 8.25 years

~ 5.5 years

+ 2.75 years

= 0.00 years

Source: Centre Asset Management, LLC.

COMPLEMENT

“CORE” WITH

LONG U.S.

TREASURY

FUTURES

COMPLEMENT

“CORE” WITH

SHORT U.S.

TREASURY

FUTURES

Unclear

4

Dawn of Increased Fed Policy and Bond Price Volatility

• Fed tightening (even in small increments) may have double the impact of policy

changes during previous periods of conventional policy implementation

5

Dawn of Increased Fed Policy and Bond Price Volatility

• Bond market price volatility reflects investor uncertainty about growth, inflation,

and, importantly, the likely reaction of monetary policy makers to current economic

data and the effectiveness of its monetary policy

• Fed policy volatility reflects in part the discretion versus rule controversy, and as a

result, which variables matter at any point in time and by how much

• Robert Lucas (1980, 1981): “I have been impressed with how

noncontroversial it (the argument for a policy rule) seems to be at a general

level and with how widely ignored it continues to be at what some view as a

practical level.”

• And, from Robert L. Hetzel of the Federal Reserve Bank of Richmond: “While the

fit of the Taylor Rule over the period 1987 – 2008 (in explaining monetary policy) is

impressive, it probably reflects a non-representative period of exceptional economic

stability.”

6

Source: "A Proposal to Clarify the Objectives and Strategy of Monetary Policy" Robert L. Hetzel, Federal Reserve Bank of Richmond, WP 16-11, September 12, 2016.

7

Monetary Policy Uncertainty

• John Williams, President of the Federal Reserve Bank of San Francisco, has argued that the Fed

should not be rule-bound but must be able to adjust policy responses to changing economic

conditions – data dependency

• But, which variables matter and by how much at any point in time: labor market activity,

inflation, inflation expectations, value of the dollar, overseas growth, Brexit, part-time workers,

discouraged workers, etc...

• And, how are they measured

-60.0

-40.0

-20.0

0.0

20.0

Jan-92 Jul-93 Jan-95 Jul-96 Jan-98 Jul-99 Jan-01 Jul-02 Jan-04 Jul-05 Jan-07 Jul-08 Jan-10 Jul-11 Jan-13 Jul-14 Jan-16

labor force activity

FRBLMCI Kansas City Fed LMCI

0.0

10.0

20.0

Jan-94 Jul-95 Jan-97 Jul-98 Jan-00 Jul-01 Jan-03 Jul-04 Jan-06 Jul-07 Jan-09 Jul-10 Jan-12 Jul-13 Jan-15 Jul-16

unemployment rates

U3 Official Rate U6 Rate

Data sources: Federal Reserve Banks of St. Louis and Kansas City. All data as of August 1, 2016

FRBLMCI: Federal Reserve Bank Labor Market Conditions Index. Kansas City Fed LMCI: Kansas City Federal Reserve Bank Labor Market Conditions Index

per

cen

tage

per

cen

tage

8

Monetary Policy Uncertainty

• FOMC members have not helped alleviate uncertainty

• A commercial service, Prattle, now applies textual analysis to members’ speeches to try

and identify their policy outlook

SEP: Summary of Economic Projections. The points are projections the FOMC made, back in 2013 and 2014, for what the federal funds rate would be in 2016. The final

projection presented here was made as of June 2014. The lesson here is that there is considerable dispersion among policy members as to the future path of the target rate,

which leads to uncertainty for investors trying to determine the implications of monetary policy for bond prices.

Monetary Policy Effectiveness: How Effective will Policy Be in a Slow Growth and Low Natural Rate Environment

• The Natural Rate is the short-term interest rate, minus inflation, that would occur

when inflation is steady and the economy is growing at its potential

• The Natural Rate is not constant and changes based on slow-moving structural

forces such as demographics and technology innovation, and may be influenced by

more medium term factors – emerging market saving, global risk reversion and

“shock” due to the Global Financial Crisis (GFC). The decline in the natural rate

shares similarities with Lawrence Summers’ “secular stagnation” thesis

• The Natural Rate isn’t observable real time and must be estimated. Plus the Fed’s

inflation target, it is the target at which the Federal funds rate should be aiming.

Ironically, the Fed at times looks to the bond market’s reaction to economic events

to determine where the natural rate might be

9

Natural rate estimates suggest the target for the real federal funds rate, currently near zero

may reach 1-1½% in 2017 – a nominal federal funds rate of 3½%

The “normal” term premium would imply a 10-year yield of about 4%.

Rates will likely move higher in a jagged manner as investors attempt to assess the policy

reactions of a “data dependent” Fed to recently released dataDates range from 01/31/1986 through 07/31/2021. Source: Federal Reserve Bank of San Francisco

Projections for the future may not materialize and are shown here for demonstrative purposes only

Slow Growth and Low Natural Rate Environment

10

-6

-4

-2

0

2

4

6

8

10

per

centa

ge

Laubach-Williams

Curdia

trend growth

Laubach-Williams and Curdia Natural Interest Rates and Trend Growth

11

Slow Growth and Low Natural Rate Environment –Unconventional Policies Required

• Conventional monetary policy – manipulation of the target rate for Federal

funds – can be restrictive but may not be sufficiently stimulative at the Zero

Lower Bound

• Unconventional policies may be required, QE, (quantitative easing), forward

guidance, an explicit negative policy rate or Nominal GDP (gross domestic

product) targeting

• Recessions may be longer and deeper, recoveries slower, and with an increased

risk of outright deflation

Unconventional Monetary Policy Put in Place

• To combat the financial crisis and the Great Recession a variety of

unconventional measures, including both credit extensions and asset

purchases were implemented. These measures drove the Federal Funds

Rate to its Zero Lower Bound (ZLB) and kept it there

12

0.0

500.0

1000.0

1500.0

2000.0

2500.0

3000.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Dec-07 Jan-09 Feb-10 Mar-11 Apr-12 May-13 Jun-14 Jul-15 Aug-16

Unconventional/Unprecedented Monetary Policy

Fed Funds Rate

Reserve Balances

per

centa

ge

$ B

illi

on

s

Source: Board of Governors of the Federal Reserve System (US)/FRED

Data as of August 1, 2016

13

Unconventional Policy, Fed Funds Rate Proxy: The Shadow Rate

• Based on asset pricing and term structure models, the “Shadow Rate” is the policy

rate that would prevail if the Federal Reserve Rate could be negative

• Evaluated through economic modelling, the Shadow Rate has, like the Federal

Funds Rate away from the Zero Lower Bound, the ability to forecast changes in

both economic and financial variables

• As a result, the Shadow Rate can be used to evaluate the impact of unconventional

monetary policy in place since 2008, whether or not it is consistent with Taylor Rule

prescriptions and whether or not the Fed is “behind the curve”

“Behind the curve" is a well-known phrase often used in discussions of monetary policy. It simply implies that the Treasury yield curve is already anticipating

where the funds rate target will eventually be and that the Fed has not yet adjusted the policy rate sufficiently in light of the current pace of economic growth

and the rate of inflation.

Shadow Rate Generally Conforms to Quantitative Easing

• Large Scale Asset Purchases (LSAP) seemed to work – the Shadow Rate declined below

the Zero Lower Bound

• Like the “Operation Twist” in the early 1960s, the Maturity Extension Program (MEP)

didn’t work – the Shadow Rate didn’t decline during the recent MEP experiment in 2011

• Based on the Shadow Rate the Fed has tightened by 300 basis points since 2013

14

-4.00

-3.00

-2.00

-1.00

0.00

1.00

2.00

3.00

4.00

5.00

6.00

Dec-03 Aug-05 Apr-07 Dec-08 Aug-10 Apr-12 Dec-13 Aug-15

The Shadow Rate: A New Means for Assessing the Stance of Monetary Policy

Fed Funds Rate

Shadow Rate

November 2010

LSAP 2

September 2011

MEP

September 2012

LSAP 3

November 2008

LSAP 1

Source: Board of Governors of the Federal Reserve System (US)/FRED

Data as of August 1, 2016

per

centa

ge

15

Monetary Policy Effectiveness

• Why does the traditional stimulus flow from monetary policy to the real

economy seem to be broken?

• ZIRP and QE seem to be subsidizing Federal government’s debt service and

corporate bond market issuance (to buy back stock and pay dividends); not

stimulating consumer spending or corporate investment

ZIRP: zero interest rate policy. HG: high grade. Data as of August 18, 2016

$ i

n t

rill

ion

s

16

Monetary Policy Effectiveness

• Reestablish conventional policy through an:

• Increase in the natural rate

• Investment in education

• Public and private capital

• Research and development

• Increase in the inflation target

Source: “Is There a Case for Inflation Overshooting,” Vasco Curdia, San Francisco Federal Reserve Bank Economic Letter 2016-04/February 16, 2016.

• “But the prescription offered by the Taylor Rule changes significantly if one assumes instead, as I do, that appreciable slack still remains in the labor market, and that the economy’s equilibrium real federal funds rate – that is, the real rate consistent with the economy achieving maximum employment and price stability over the medium term – is currently quite low by historical standards.” Janet Yellen’s testimony before Congressional Joint Economic Committee on March 19, 2015.

• Various versions of the Taylor Rule:

17

Policy Rule Doesn’t Eliminate Policy Uncertainty

• The first-difference rule

ignores all unobservable

variables and looks

simply at changes in

inflation and

unemployment

Source: "Federal Funds Rates Based on Seven Simple Monetary Policy Rules", Edward S. Knotek II, Randal Verbrugge, Christian Garciga, Caitlin Treanor, and Saeed

Zaman, Federal Reserve Bank of Cleveland Economic Commentary, Number 2016-07, July 11, 2016 .

18

• Form of the equation

and variations in inputs

can result in a wide

range of fed funds rate

targets

• Research at the Kansas

City Federal Reserve

Bank suggests that

market participants

focus primarily on

change in employment

and inflation in

predicting Fed

behavior

Policy Rule Doesn’t Eliminate Policy Uncertainty

Setting the Basis for a More Violent Market Reaction to Even Small Changes in the Federal Funds Rate

• Because of uncertainty about where the economy is and a desire to move current

inflation expectations in line with the 2% target, we believe the Fed will likely

extend the normalization process

• Research, as illustrated in the table below, suggests a potentially more damaging

impact on fixed income markets today than during prior conventional policy periods

when normalization leads to a reduction in the Fed’s balance sheet

Units Normal Monetary Policy Unconventional Monetary Policy

Shadow Short Rate Basis Points 100 100

10 Year Treasury Rate Basis Points 44 89

Corporate Bond Prices Percentage -2.4% -5.6%

Normal Monetary Policy: February 1, 1996 to September 12, 2008

Unconventional Monetary Policy: September 15, 2008 to April 16, 2014

Source: E. Claus, I. Claus and L. Krippner, "Asset Markets and Monetary Policy at the Zero Lower Bound," Discussion Paper

Series, Reserve Bank of New Zealand, July 2014

19

Higher Rates Likely But Not Without Interruption – Our Monthly Review Timetable

Opinions, estimates and projections in this report constitute the current judgment of the author as of August 5, 2016 and are subject to change.

Dates range from 01/03/2000 through 09/30/2017

Sources: Thomson Reuters Datastream and Centre Asset Management, LLC

Equilibrium Forecast ~ 4.0%

20

0

1

2

3

4

5

6

7

8

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

esti

mat

es o

f in

tere

st r

ate

in p

erce

nta

ges

Return to Normalcy

• At some point the Fed may move to further increase the target for the federal

funds rate to begin “normalization” with the natural rate. If the policy moves are

drawn out investors may need to put cash to work using liquid approaches in order to

help generate wealth

• Fed tightening (even in small increments) may have double the impact of policy

changes during previous periods of conventional policy implementation

• With growth potential at around 2% and a 2% inflation target the 10-year Treasury

should near 4%. However, if changes in technology and or demographics occur,

potential growth and the natural rate could revert to historical norms

• The components of our investment discipline - the Interest Rate Scorecard™ - focus

on growth, inflation, and policy behavior with an allowance for the unknown

unknowns

• As a result, the Centre Active U.S. Treasury and Centre Active U.S. Tax Exempt

Funds are designed through our proprietary duration management process to help

mitigate against the loss of value from rising rates and increase in fixed income

volatility

21

Disclosures

Definitions

1. Barclays U.S. Treasury Bond Index - The Barclays US Treasury Bond Index comprises public obligations of the US Treasury with remaining

maturities on one year or more. You cannot invest directly into an index.

2. Taylor Rule – A monetary policy guideline for setting interest rates. The rule suggests that the optimal (target) interest rate level is a function of

inflation level and employment level.

3. Shadow Federal Funds Rate – An alternative measure to the Federal Funds rate that aims to take into account the impact of unconventional

monetary policy and provide a better measure of monetary policy stance.

4. Wu-Xia Shadow Federal Funds Rate – A version of the Shadow Federal Funds Rate created by Jing Cynthia Wu and Fan Dora Xia.

5. Labor Market Conditions Indicators (LMCI) – The Kansas City Fed Labor Market Conditions Indicators (LMCI) are two monthly measures of

labor market conditions based on 24 labor market variables. One indicator measures the level of activity in labor markets and the other indicator

measures momentum in labor markets.

6. Basis point (bps) – One hundredth of a percent.

7. Quantitative Easing (QE) – Unconventional monetary policy used by central banking authorities to stimulate the economy by providing liquidity

and lowering cost of borrowing capital through asset purchases.

8. Target Federal Funds Rate – The interest rate charged between depository institutions on overnight sale of balances at the Federal Reserve. The

rate is set by the Federal Open Market Committee of the Federal Reserve.

9. Large Scale Asset Purchases (LSAP) - In conducting LSAPs, the Fed purchased longer-term securities issued by the U.S. government and longer-

term securities issued or guaranteed by government-sponsored agencies such as Fannie Mae or Freddie Mac. The Fed purchased the securities in the

private market through a competitive process; the Fed does not purchase government securities directly from the U.S. Treasury. The Fed's purchases

reduced the available supply of securities in the market, leading to an increase in the prices of those securities and a reduction in their yields.

10. Maturity Extension Program (MEP) – Under the maturity extension program, the Federal Reserve sold or redeemed a total of $667 billion of

shorter-term Treasury securities and used the proceeds to buy longer-term Treasury securities, thereby extending the average maturity of the

securities in the Federal Reserve’s portfolio.

11. Initial claims - A measure of the number of jobless claims filed by individuals seeking to receive state jobless benefits. This number is watched

closely by financial analysts because it provides insight into the direction of the economy. Higher initial claims correlate with a weakening

economy.

12. U3 Official Rate – The officially recognized rate of unemployment, measuring the number of unemployed people as a percentage of the labor

force.

13. U6 Rate – A broader measure of unemployment that includes discouraged and marginally attached workers in its calculation.

14. Brexit – The United Kingdom’s decision to exit the European Union.

15. FOMC – Federal Open Market Committee. The branch of the Federal Reserve Board that determines the direction of monetary policy.

16. Zero Lower Bound – A macroeconomic problem that occurs when the short-term nominal interest rate is at or near zero, causing a liquidity trap

and limiting the capacity that the central bank has to stimulate economic growth.

17. 10-year Treasury rate – The yield to maturity on a 10-year Treasury security.

22

Disclosures

The statements and opinions expressed are those of T. Kirk Barneby and are as of the date of this brochure. All information is historicaland not indicative of future results and subject to change. Reader should not assume that an investment in the securities mentioned wasor would be profitable in the future. This information is not a recommendation to buy or sell. Past performance does not guaranteefuture results.

Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. Toobtain a prospectus containing this and other most current information regarding the fund, please go to our websitewww.centrefunds.com or call 1-855-298-4236. Read the prospectus carefully before you invest.

Important Risk Disclosure: There is no assurance that this investment philosophy will consistently lead to successful investing. AnInvestment in the Funds involves risk, including loss of principal. Fixed-income securities are subject to repayment risk and the risk ofprice volatility due to interest rate sensitivity, market perception of the issuer's creditworthiness and general market conditions. Asinterest rates rise, the value of fixed-income securities typically declines. TIPS are long-duration assets, sensitive to changes in interestrates and, in the short term, can experience substantial fluctuations in price.

Centre Active U.S. Treasury Fund is distributed by ALPS Distributors, Inc. Centre Asset Management, LLC and ALPS Distributors,Inc. are not affiliated.

T. Kirk Barneby is a registered representative of ALPS Distributors Inc.

DRX000563 Exp. 12/31/2016

23