Quant Emerging Markets Fund

Investment Philosophy
PanAgora Asset Management , Inc. employs a rigorous quantitative modeling process called Contextual Alpha Modeling. This integrates bottom-up fundamental and top-down macroeconomic analyses to dynamically select factor weightings used to predict the excess return of each stock based on relevant drivers for each. Each stock receives a score that is used to rank the stock among its peers and determine its selection to or exclusion from the fund. This proprietary process focuses on adding value through stock-specific risk, while limiting systematic risk exposures that may detract from performance.

Investment Process
The Fund invests primarily in publicly-traded companies based in emerging global economies. The Fund consists of 90 to 200 stocks. Under normal market conditions, at least 80% of the Fund’s total assets are invested in companies within the MSCI Emerging Markets Index, which the Fund aims to outperform.

Factors assessed in the investment process include:

• Value: dividend yield, book-to-price, earnings-to-price, cash flow yield, and discounted cash flow
•  Quality: operational efficiency, financial strength, earnings quality, capital expenditures and asset growth
• Momentum: price and earnings
• Investor behavior: following the crowd, regret aversion, over-confidence, narrow framing
• Information asymmetry and agency issues: earnings manipulation, excessive external financing

These factors are used in different weights for each security based on market cap size, growth, value, beta, earnings yield, and earnings predictability, as well as region or sector-specific characteristics.

Generally the Fund invests inat least eight countries and three broad geographic regions, such as Latin America, Asia, and Europe. Manual constraints are applied to limit the position size in any one stock, sector, or geographical location, and therefore to avoid any large “bets” in these areas.

• For individual stocks, the Fund is limited to +/-3.5% weighting relative to the MSCI Emerging Markets Index.
• For country and sector limits, the fund is limited to +/- 5% in relation to the index.

The Fund invests in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investment by the Fund in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-rated securities. Emerging market securities involve unique risks, such as exposure to economies less diverse and mature than that of the U.S. or more established foreign markets.

An investment in the Fund involves certain risks.

Investing in emerging markets involves risks in addition to and greater than those generally associated with investing in more developed foreign markets. The extent of foreign development, political stability, market depth, infrastructure and capitalization and regulatory oversight are generally less than in more developed markets. Emerging market economies can be subject to greater social, economic, regulatory and political uncertainties including potential expropriation and confiscatory taxation. All of these factors generally make emerging market securities more volatile and potentially less liquid than securities issued in more developed markets.

Before investing carefully consider a Fund’s investment objectives, risks, charges and expenses. Please read the prospectus carefully before you invest or send money.