The Invesco Balanced-Risk Allocation Fund (“Balanced-Risk Allocation Fund”) may differ from the Wealthfront Risk Parity Fund (“Risk Parity Fund”) in important respects. The Balanced-Risk Allocation Fund’s investment object is to provide total return with a low to moderate correlation to traditional financial market indices, while the Risk Parity Fund’s investment objective is to seek total return that consists of capital appreciation and income. The Balanced-Risk Allocation Fund pursues its investment objective by allocating assets across three asset classes: equities, fixed income and commodities, such that no one asset class drives the fund’s performance. The fund’s exposure to these three asset classes will be achieved primarily through investments in derivative instruments including but not limited to futures and swap agreements, and other investments that create economic leverage. The Balanced-Risk Allocation Fund may also invest directly in common stock. The fund uses derivatives and other leveraged instruments to create and adjust exposure to the asset classes. The fund may also hold long and short positions in derivatives but seeks to maintain a net long position. The Balanced-Risk Allocation Fund will have the potential for greater gains, as well as the potential for greater losses, than if the fund did not use derivatives or other instruments that have an economic leveraging effect. Economic leveraging tends to magnify, sometimes significantly depending on the amount of leverage used, the effect of any increase or decrease in the fund’s exposure to an asset class and may cause the fund’s net asset value to be more volatile than a fund that does not use leverage. It is expected that the annualized volatility for the fund will be, on average, approximately 8%. The Balanced-Risk Allocation Fund will also invest in a wholly-owned subsidiary of the fund (the “Subsidiary”) to gain exposure to the commodities markets. The Subsidiary, in turn, will invest in futures, swaps, commodity-linked notes, ETFs and ETNs, without limitation in commodity-linked derivatives and other securities that may provide leveraged and non-leveraged exposure to commodities. The Risk Parity Fund seeks to achieve its investment objective by allocating its assets among a broad range of asset classes including but not limited to global developed and emerging market equities, global developed and emerging markets fixed income, real estate investment trusts (REITs) and commodities. The fund’s exposure to these asset classes will be achieved principally through investments in derivative instruments such as total return swaps, and to a lesser extent by investing in forward and futures contracts. Through the use of derivatives that have the effect of leverage, the Risk Parity Fund will have the potential for greater gains, as well as the potential for greater losses, than if the Fund did not use derivatives or other instruments that have an economic leveraging effect. The Risk Parity Fund will target an annualized volatility for the Fund of 12%. Unlike the Balanced-Risk Allocation Fund, the Risk Parity Fund will not make investments through a wholly-owned subsidiary of the Fund. Investments in both the Balanced-Risk Allocation Fund and the Risk Parity Fund will subject an investor to derivatives risk, counterparty risk, leverage risk, commodities risk, market risk, credit risk, among other risks. However, investments in the Balanced-Risk Allocation Fund would further subject an investor to the following risks: Exchange-Traded Notes Risk, which would subject investors to credit risk, counterparty risk, and the risk that the value of the exchange-traded note may drop due to a downgrade in the issuer’s credit rating. The value of an exchange-traded note may also be influenced by time to maturity, level of supply and demand for the exchange-traded note, volatility and lack of liquidity in the underlying market, changes in the applicable interest rates, and economic, legal, political, or geographic events that affect the referenced underlying market or assets; Short Position Risk, which is the which is theoretically unlimited, if the price of the asset sold short by the fund increases from the short sale price. Further, the counterparty to a short position or other market factors may prevent the fund from closing out a short position at a desirable time or price and may reduce or eliminate any gain or result in a loss; and Subsidiary Risk, which would indirectly expose the fund to the risks associated with the subsidiary’s investments. The commodity-related instruments held by the subsidiary are generally similar to those that are permitted to be held by the fund and are subject to the same risks that apply to similar investments if held directly by the fund. There can be no assurance that the investment objective of the subsidiary will be achieved. For more detailed information regarding the investment strategies and risks of each respective fund, please review each fund’s respective prospectus: Wealthfront Risk Parity Fund Prospectus; Invesco Balanced-Risk Allocation Fund Prospectus: ABRZX and ABRCX
The Wealthfront Risk Parity Fund (the “Fund”) is managed by WFAS LLC, a registered investment adviser and a wholly owned subsidiary of Wealthfront, Inc. WFAS LLC receives an annual management fee equal to 0.50% of the Fund’s average daily net assets. Northern Lights Distributors LLC a member FINRA/ SIPC serves as the principal distributor for the Fund.
Before investing in the Wealthfront Risk Parity Fund, you should carefully consider the Fund's investment objectives, risks, fees and expenses. This and other information can be found in the Fund’s prospectus. Please read the fund prospectus or summary prospectus carefully before investing. In order to add the Wealthfront Risk Parity Fund, we must rebalance your portfolio. As part of this process, if we sell positions at a gain, and you do not have sufficient harvested losses to offset those gains, you’ll pay taxes on the net gain.
There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses.