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No Guarantee Against
Loss
The investment return and principal value of an investment
will fluctuate so that a client's shares, when redeemed, may
be worth more or less than their original cost. Green Pastures'
trading strategies may or may not be profitable in the future
and there can be no guarantee against loss. An investment
in Green Pastures' trading strategies is not insured or guaranteed
by the SIPC, FDIC or any other government agency.
Past Performance Results
May Not Be Indicative Of Future Performance Results
Model performance results and hypothetical back-tested performance
results have certain inherent limitations (see individual
Green Pastures Growth Model (Mutual Funds) and Green Pastures
Growth Model (Variable Annuities) charts). Model performance
results do not reflect the performance of an actual client
account but rather the performance of a model account. Past
performance results may not be indicative of future performance
results and the performance of a specific individual client
account may vary substantially from the model performance
results. No current or prospective client should assume that
future performance results would be profitable or equal the
model performance results reflected herein. Hypothetical back-tested
performance results do not represent the results of actual
trading but rather the results of the retroactive application
of a model that was developed with the benefit of hindsight
utilizing historical data. In addition, the hypothetical back-tested
performance results may not reflect the impact that any material
economic or market factors might have had on the adviser's
decision-making if the adviser had actually been managing
clients' money during that period. The performance results
reflect the reinvestment of money market interest, dividends
and other earnings and the deduction of the adviser's management
fees but may be reduced by custodian fees and transaction
fees.
The information underlying all performance data
has been gathered from third party sources that we believe
to be reliable; however, no guarantee can be made with respect
to its accuracy. This is not a solicitation to purchase securities,
nor a solicitation for the rendering of investment advisory
services. A copy of Green Pastures' current disclosure statement
on Part II of Form ADV is available on request. Prospectuses
are available on request.
Dependence On The Adviser
The adviser exclusively makes all trading strategy decisions
with respect to The Green Pastures' Growth Model. Since a
client will be dependent on the Adviser's judgment and abilities,
the client will not have the opportunity to evaluate fully
for himself / herself the relevant economic, financial, and
other information regarding the trading strategies. There
is no assurance that the Adviser will be successful. Accordingly,
no investor should become a client unless he /she is willing
to entrust all aspects of the trading strategies to the Adviser.
Trading System Risks
As with any quantitative trading strategy, Green Pastures'
trading strategies have been based on a variety of statistical
market data that may or may not be predictive of future market
conditions. The statistical strategies were developed under
certain market conditions that will necessarily change over
time and may significantly affect investment performance.
While Green Pastures devotes considerable time and resources
to updating and adapting the strategies to new conditions,
such conditions may not be capable of prediction or resolution
within the strategies and no assurance can be given that the
strategies will continue to trade profitably in the future.
Market Risks
There is a significant degree of market risk to Green Pastures'
trading strategies. In general, shares of the mutual funds
and variable annuity portfolios to be invested in may only
be redeemed as of the close of business on a trading day.
Capital invested in sector or index mutual funds or variable
annuity portfolios is at the risk of the market during the
entire trading day, notwithstanding any "sell" signal
generated by the strategies. Accordingly, the trading strategies
are subject to intraday price volatility and other short-term
market risks. The level of such risk, as well as overall performance,
is determined largely by the mutual fund and variable annuity
portfolio managers and not by Green Pastures. While Green
Pastures will endeavor to anticipate general price movements
of indexes and other investments, unanticipated market movements
may significantly affect the value of a client's investment.
Possible Limitations
On Switching Strategies
A number of U.S. mutual funds and variable annuity portfolios
prohibit or restrict the ability of investment managers to
switch from one fund to another, thus effectively precluding
or limiting the effectiveness of trading strategies such as
that of the Green Pastures' trading strategies. Green Pastures
currently has available to it a number of sector and index
mutual funds and variable annuity portfolios that permit switching
with sufficient frequency to facilitate Green Pastures' trading
strategies. To date, sector and index mutual funds and variable
annuity portfolios have not generally imposed such restrictions.
However, there is no assurance that such mutual funds and
variable annuity portfolios will not impose limitations in
the future or that other unrestricted mutual funds and variable
annuity portfolios will be available with attractive investment
characteristics.
Lack Of Diversification
Green Pastures' trading strategies may be concentrated in
a limited number of mutual funds and variable annuity portfolios.
As a result, a client's investment portfolio may be subject
to more rapid change in value than would be the case if the
client's investment portfolio maintained a wider diversification
among mutual funds and variable annuity portfolios. Green
Pastures' trading strategies only invest in sector (equity)
and index (equity) mutual funds and variable annuity portfolios
to / from money market mutual funds and variable annuity portfolios.
This lack of diversification may result in lower performance
returns as compared to an investment portfolio that may have
a more diversified selection. The fact that many U.S. mutual
funds and variable annuity portfolios impose restrictions
on trading strategies, as indicated above, may further limit
the selection of funds / portfolios and optimum diversification.
Liquidity And Pricing Risks
In general, U.S. mutual funds and variable annuity portfolios
must offer their shareholders the right to redeem shares daily
at the close of business and at closing net asset value (mutual
funds) / closing annuity unit value (variable annuity portfolios).
However, in certain circumstances, such as a disruption of
the orderly markets for the securities in which the mutual
funds and variable annuity portfolios invest, or the inability
of a mutual fund and variable annuity portfolio to receive
or process all redemption requests, Green Pastures' trading
strategies might not be able to dispose of certain holdings,
or may do so only at prices that do not represent true market
value in the judgment of Green Pastures. This may prevent
the Green Pastures' trading strategies from limiting losses
or realizing gains. The mutual fund and variable annuity portfolio
manager or custodian determines the redemption price, consisting
of net asset value / annuity unit value, unilaterally.
Leverage Risks
Some of the underlying sector and index mutual funds and variable
annuity portfolios that the Green Pastures' trading strategies
invest in employ leveraged investment techniques. Leverage
is the ability to obtain a return on a capital base, which
is larger than the equity invested, and may involve the use
of borrowed funds, options, futures contracts or other instruments.
Use of leverage can magnify the effects of changes
in the value of the invested funds and make them more volatile.
The leveraged investment techniques that some of the underlying
sector and index mutual funds and variable annuity portfolios
employ should cause the Green Pastures' trading strategies
to lose more money in adverse environments.
Particular Mutual Fund
And Variable Annuity Risks
Green Pastures' trading strategies are exposed to a variety
of risks related to the particular mutual funds and variable
annuity portfolios that they will invest in from time to time.
Such risks include, but are not limited to, the following:
- Green Pastures' trading strategies may invest
in U.S. enhanced small-cap index mutual funds and variable
annuity portfolios. They could experience greater risks
than a fund / portfolio, which invests primarily in U.S.
large capitalized, widely traded companies such as:
- Small company stocks tend to have greater fluctuations
in price than the stocks of large companies.
- There can be a shortage of reliable information on
certain small companies, which at times may pose a risk.
- Small companies tend to lack the financial and personnel
resources to handle industry wide setbacks and as a
result such setbacks could have a greater effect on
the companies share prices.
- Small company stocks are typically less liquid than
large company stocks and liquidating positions in turbulent
market conditions could become difficult.
- Green Pastures' trading strategies may also
invest in U.S. enhanced mid-cap index mutual funds and variable
annuity portfolios. They could experience greater risks
than a fund / portfolio, which invests primarily in U.S.
large capitalized, widely traded companies such as:
- Mid-cap company stocks tend to have greater fluctuations
in price than the stocks of large companies, but not
as drastic as stocks of small companies.
- Stocks of mid-sized companies could be more difficult
to liquidate during market downturns compared to larger,
more widely traded companies.
- Green Pastures' trading strategies may also
invest in U.S. enhanced sector mutual funds and variable
annuity portfolios. They could experience greater risks
than a fund / portfolio, which invests primarily in U.S.
large capitalized, widely traded companies such as:
- Sector funds / portfolios invest in large capitalized
companies, small company stocks and mid-cap company
stocks and tend to experience greater risks than a fund
/ portfolio, which invests strictly in U.S. large capitalized,
widely traded companies (see descriptions of small company
stock risk factors and mid-cap company stock risk factors
above). In addition to the risks common to investing
in large capitalized companies, small company stocks
and mid-cap company stocks, sector funds / portfolios
may be subject to a number of other risks that may affect
the value of the funds / portfolios.
- Sector funds / portfolios tend to be subject to sector
concentration risk, the risk that the securities of
issuers in the sectors that the sector funds / portfolios
purchase will under perform the market as a whole. To
the extent that the fund's / portfolio's investments
are concentrated in issuers conducting business in the
same economic sector, the funds / portfolios may be
subject to legislative or regulatory changes, adverse
market conditions and / or increased competition affecting
that economic sector. The prices of the securities of
issuers in the sectors may fluctuate widely due to risks
of rapid technological change and obsolescence of products,
high technology and research costs, intense competition,
subsidized foreign competition, the economic performance
of their customers, and regulatory requirements of federal
/ state / local / foreign governments.
- Sector funds / portfolios tend to be subject to small
issuer risk. Many securities of issuers in the sectors
are relatively small and are thinly traded securities.
Many securities of issuers in the sectors may offer
one or a limited number of rapidly obsolescing products
or may not yet offer products or offer a single product,
and may have persistent losses during a new product's
transition from development to production or erratic
revenue patterns.
The Markets In Which
The Company Competes Are Highly Competitive
The investment industry in general, and the markets in which
the Green Pastures' trading strategies trade in particular,
are extremely competitive. In pursuing its trading methods
and strategies, the Green Pastures' trading strategies compete
with investment firms, including many of the larger investment
advisory and private investment firms, as well as institutional
investors. In relative terms, the Green Pastures' trading
strategies will have little capital and may have difficulty
in competing in markets in which its competitors have substantially
greater financial resources, larger research staffs, and more
traders than the Green Pastures' trading strategies have or
expect to have in the future. In any given transaction, trading
activity by other firms will tend to narrow the spread between
the price at which a futures interest may be purchased by
the Green Pastures' trading strategies and the price they
expect to receive upon consummation of the transaction.
Importance Of General
Market Conditions To Profitability
Most traders are more likely to, although there can be no
assurance that they will, trade profitably during periods
when major price movements occur. Such movements generally
occur in any given market only infrequently, and during periods
of static or "whipsaw" markets it is unlikely that
the Adviser will achieve profits for the Green Pastures' trading
strategies.
Failure Of Counterparties
Green Pastures' trading strategies may be unable to recover
client assets in the event of the bankruptcy of any counterparty
with whom they trade.
Federal And State Income
Tax Risks
Due to the frequent trading activity employed by the Green
Pastures' trading strategies, an investor is strongly urged
to consult his / her own tax adviser about possible federal,
state and local tax consequences to the investor of an investment
in Green Pastures' trading strategies. Tax consequences may
differ for different investors, and an investor could be affected
by future changes in tax laws. No tax ruling or legal opinion
is being sought as to any tax matters.
THE FOREGOING RISK FACTORS DO NOT PURPORT
TO BE A COMPLETE EXPLANATION OF ALL RISKS INVOLVED IN AN INVESTMENT
IN THE GREEN PASTURES' TRADING STRATEGIES. PROSPECTIVE INVESTORS
SHOULD READ GREEN PASTURES' INFORMATIONAL MATERIAL, AND THE
UNDERLYING MUTUAL FUND AND VARIABLE ANNUITY PORTFOLIO PROSPECTUSES
IN THEIR ENTIRETY, BEFORE DETERMINING WHETHER TO INVEST.
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