GaveKal Platform Company Fund

Targeting Innovation.

Investing in knowledge worldwide.

GaveKal Platform Company Fund

GaveKal Capital, LLC | 1099 18th St., Suite 2780 | Denver, CO 80202 | www.GaveKalCapital.com



Fourth Quarter 2011 Investor Update



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• Strong performance in 2011, with GAVIX up 7.64%, beating the MSCI World Index by 13.18%

• Risk metrics since inception highlight our focus on risk management• Our big picture overlay suggests a constructive market environment for the next couple of years• We repositioned the portfolio in 4Q11 (Tilting Bullish) to capture expected market strength• There were many important lows in early October—from stock prices to multiples, to inflation

expectations and economic data• Consumer confidence increase suggests rising stock multiples• US semiconductors are a potential dividend growth story• Japanese pharmaceuticals are another potential dividend growth story

Tilting Bullish – Part 2

*The Fund's advisor has contractually agreed to waive its fees and/or absorb expenses of the Fund to ensure that total annual fund operating expenses (excluding taxes, leverage interest, brokerage commissions, dividend expenses on short sales, acquired fund fees and expenses as determined in accordance with Form N‐1A, expenses incurred in connection with any merger or reorganization, or extraordinary expenses such as litigation) do not exceed 1.50% and 1.25% of average daily net assets for Advisor Class and Institutional Class Shares, respectively. This agreement is in effect until December 31, 2012, and it may be terminated before that date only by the Trust's Board of Trustees. The Fund's advisor is permitted to seek reimbursement from the Fund, subject to limitations, for fees it waived and Fund expenses it paid for three years from the date of any such waiver or payment.

As of 12/31/11 the 1‐year and since inception annualized total returns for the GaveKal Platform Company Fund Institutional Class were 7.64% and 6.39% respectively . The MSCI World Index's 1‐year and since inception annualized total return as of December 31, 2011 were ‐5.54% and 2.32%. The total annual operating expenses of the Fund are 13.14% and net expenses* are 1.25% for the Institutional Class. The inception date for the GaveKal Platform Company Fund is 9/30/2010.

The performance data quoted here represents past performance. Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted. To obtain performance information current to the most recent month‐end please call 888.998.9890 or visit our website at www.GaveKalFunds.com.A redemption fee of 2.00% will be imposed on redemptions or exchanges of shares you have owned for 90 days or less. Please see the prospectus for more information.



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The performance data quoted here represents past performance. Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted. To obtain performance information current to the most recent month-end please call 888.998.9890 or visit our website at www.gavekalfunds.com. A redemption fee of 2.00% will be imposed on redemptions or exchanges of shares you have owned for 90 days or less. Please see the prospectus for more information.The total annual operating expenses of the Fund are 13.39% and 13.14% and net expenses are 1.50% and 1.25% for the Advisor and Institutional Classes, respectively. The inception date for the GaveKal Platform Company Fund is 9/30/2010.The Fund’s advisor has contractually agreed to waive its fees and/or absorb expenses of the Fund to ensure that total annual fund operating expenses (excluding taxes, leverage interest, brokerage commissions, dividend expenses on short sales, acquired fund fees and expenses as determined in accordance with Form N-1A, expenses incurred in connection with any merger or reorganization, or extraordinary expenses such as litigation) do not exceed 1.50% and 1.25% of average daily net assets for Advisor Class and Institutional Class Shares, respectively. This agreement is in effect until December 31, 2012, and it may be terminated before that date only by the Trust’s Board of Trustees. The Fund’s advisor is permitted to seek reimbursement from the Fund, subject to limitations, for fees it waived and Fund expenses it paid for three years from the date of any such waiver or payment.The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets.Please consider the Fund’s investment objectives, risks, charges and expenses before investing. The prospectus or summary prospectus, that contains this and other information about the Fund, is available by calling 888.998.9890 and should be read carefully prior to investing.

A strong year of outperformance (as of 12/31/2011)

GaveKal Platform Company Fund



Risk metrics solid over life of fund

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Information Ratio is active return per unit of active risk (or tracking error). It is a measure of risk adjusted return that resulted from active management. A tracking error above zero indicates that active management added value to the portfolio. A tracking error below zero indicates that active management subtracted value to the portfolio.Tracking Error (also called active risk) is the standard deviation of active returns over the interval being measured. It is a measure of variability of a portfolio’s performance relative to its benchmark.Correlation is the extent to which the returns of different types of investments move in tandem with one another in response to changing economic and market conditions. Correlation is measured on a scale of ‐1 (negatively correlated) to +1 (completely correlated). Low correlation or negative correlation to traditional stocks and bonds may help reduce risk in a portfolio and provide downside protection.Alpha is a measure of the portfolio’s risk adjusted performance. When compared to the portfolio’s beta, a positive alpha indicates better‐than‐expected portfolio performance and a negative alpha worse than‐expected portfolio performance.Beta is a measure of the funds sensitivity to market movements. A portfolio with a beta greater than 1 is more volatile than the market and a portfolio with a beta less than 1 is less volatile than the market.Volatility as measured by standard deviation is a calculation used to measure variability of a portfolio’s performance.Downside Deviation is a calculation used to measure variability of a portfolio’s performance when returns are below zero. It differs from standard deviation in that it only measures variability of below zero returns. A lower variability of below zero returns is typically desirable.Sharpe Ratio uses a fund’s standard deviation and its excess return (the difference between the fund’s return and the risk‐free return of 90‐day Treasury Bills) to determine reward per unit of risk.Sortino Ratio uses a fund’s downside deviation and its excess return (the difference between the fund’s return and the risk‐free return of 90‐day Treasury Bills) to determine reward per unit of unwanted risk.Max Drawdown is the maximum single period loss incurred over the interval being measured.



Our big picture overlay is very constructive

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All of the bear markets we label unique were characterized by a recession atmosphere, heavy percentage losses and, most importantly, an extended period of time (18 to 24 months). The bear markets that fit our requirements were: 1) 9/1929 to 7/1932 2) 1/1973 to 12/1974, 3) 11/1980 to 8/1982 4) 3/2000 to 10/2002 and 5) 10/2007 to 3/2009.

We believe that time is a critical factor here because long time frames often accentuate bearish psychology and promote raising liquidity. Declines in the following bear markets were severe but over quickly: 1962 (4 months), 1987 (2 months) and 1990 (3 months).

The extended time served to inflate cash and shorts to extreme levels, which propelled the initial advances off major lows in July 1932, December 1974, August 1982, October 2002 and March 2009. These initial advances were all far above the norm as follows: 1932 +172.0%, 1974 +78.5%, 1982 +68.4%, 2002 +49.4% and 2009 +75.6%. The advance normally lasted 12 to 16 months.

After each of these explosive advances a long period of consolidation was to follow. The consolidations as shown in the top left chart. In most cases (except 1976‐78) the price declines were not substantial, but the time frame centered on 20 months, which is exactly the time span from 4/26/2010 to 12/26/2011!

After the period of consolidation, in each case the market moved significantly higher over the next two years as shown to the left.

Dates % Decline Months

7/1933 to 3/1935 13% 20

7 or 9/1976 to 3/1978 28% 18‐20

11/1983 to 9/1985 1% 22

2/2004 to 10/2005 6.5% 20

4/2010 to 10/2011 8.3% 17.5

DJIA 2nd Advance % Increase Time (Months)

3/18/1935 to 3/10/1937 (99.95 to 195.59)

103.8 24

3/1/1978 to 11/19/1980 (737 to 1009)

36.9 31

9/18/1985 to 8/25/1987 (1284 to 2747)

113.9 23

10/13/2005 to 10/11/2007 (10094 to 14278)

41.4 24

Source: Concept and Data Courtesy of Finucane Financial

Consolidations after explosive advance

Second advance after consolidations

The information and companies listed on this slide are for example purposes only and should not be construed as the Investment Advisor’s opinion or investment outlook related to any of the companies or securities listed.



We think the stage is set for a two year advance

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Advance: 3/9/09 to 4/26/10 DJIA +75.6% 6640 to 11309 (S&P +83%)

Decline: 4/26/10 to 7/1/10 DJIA ‐15.1% 11309 to 9596 (S&P ‐17.1%)

Advance: 7/1/10 to 5/2/11 DJIA +34.7% 9596 to 12928 (S&P +35%)

Decline: 5/2/11 to 10/4/11 DJIA ‐19.8% 12928 to 10362 (S&P ‐21.5%)

Advance: 3/9/09 to 5/2/11 DJIA +100.7% 6440 to 12928 (S&P +105.5%)

We see the massive decline from 10/2007 to 3/2009 as a rare, unique bear market seen very seldom. Since 1900 this is onlythe fifth bear market of this nature. The advance off the low over 13 months (75.6%) was second only to the explosive moveoff the 7/1932 low. The market has consolidated for 20 months similar to the other four examples and even though the DJIAdecline is moderate, the speculative stocks have corrected percentages. With low volume for two months and indicators atthe October low so positive, the second strong two year up leg should begin shortly.

The explosive advance off the 10/4/11 low was 18.7% in the DJIA (10362 to 12303) and 20.2% in the S&P 500 to the high on10/28/11. Since 11/1/11 the market has traded in a narrow trading range on very low relative volume. The low volume heresuggests the selling has run its course. Volume is lower since 11/1 than in early August or early October, similar to how theFebruary‐March volume in 2009 was far lower than at lows on 10/10/08 and 11/21/08.

Since the March 2009 low, we have a strong bull market advance, then a 20 month correction to December 26, 2011.

Advance and consolidation timeline since March 2009


Source: Concept and Data Courtesy of Finucane Financial



GaveKal is in the third and fourth steps of tilting bullish

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1) Invest Surplus CashCompleted

2) Buy Select Cyclicals & Growth StocksCompleted

3) Sell DefensivesWe’re in this phase

now

4) Overweight Cyclicals & Growth Stocks

We’re in this phase now too




Fourth quarter was an important buy spot for us

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The information and companies listed on this slide are for example purposes only and should not be construed as the Investment Advisor’s opinion or investment outlook related to any of the companies or securities listed. Past performance is no guarantee of future results.

Jul Aug Sep Oct Nov Dec1,050

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Buys 12/16

Tilting Bullish Buy Spots in the last 100 DaysMSCI World Index in USD

MSCI The World Index - Price

Link to 3rd quarter 2011 Investor Performance Update: Tilting Bullish

Source: FactSet

https://content.springcm.com/content/DownloadDocuments.ashx?aid=6995&Selection=Document%2Ca6734c0b-4bf4-e011-adf4-0025b3af184e%3B



We think there were many important lows in early October

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Interesting divergence between lumber prices—a very domestically focused commodity—and Treasury bonds.

The equity risk premium has fallen since the October lows.

'07 '08 '09 '10 '111.5

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October 4Low

United S tatesS &P 500 F orward P /E & 10-Y ear T reas ury Y ield

S&P 500 - Price to Earnings Ratio (Right)US Treasury Constant Maturity - 10 Year - Yield (Left)

4/09 7/09 10/09 1/10 4/10 7/10 10/10 1/11 4/11 7/11 10/11 1/121.5

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United S tates10-Y ear T reasury & Lumber P rices

US Treasury Constant Maturity - 10 Year - Yield (Left)Fibres Lumber Futures 1-Pos, CME, Price, Close - World (Right)

Source: FactSet



Has there been a turn toward price stability?

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Gold has taken out October lows while real rates stay at zero.

The deflation scare of last fall appears to be over with inflation rates moving back to the 2% comfort zone.

4/08 10/08 4/09 10/09 4/10 10/10 4/11 10/11

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United S tates10 Y ear T IP S Y ield & G old

C orrelation: -0.89

US Treasury Constant Maturity - 10 Year - Yield (Left)Gold, London PM Fixing ($/ozt) - Close (Right)

J an F eb Mar Apr May J un J ul Aug S ep Oct Nov Dec1.6

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United S tates10 Y ear T IP S Derived B reakeven Inflation & S P 500

C orrelation: 0.82

10-Year TIPS, Breakeven Inflation (Left)S&P 500 - Price (Right)

Source: FactSet



Economic conditions and inflation expectations found footing

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Economic conditions bottomed right on the stock market lows.

Inflation expectations found a floor at the same time.

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United S tatesS &P 500 vs B oom-B us t B arometer

C orrelation: 0.92

(INDEX) CRB Raw Industrial/Initial Unemployment ClaimsS&P 500 - Price Index (Left)

4/10 7/10 10/10 1/11 4/11 7/11 10/11 1/1211

1.21.2

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October 4 Low

United S tates5 & 10 Y ear T IP S Derived B reakeven Inflation

5-Year TIPS, Breakeven Inflation10-Year TIPS, Breakeven Inflation

Source: FactSet



Evidence of expanding bank credit is becoming visible

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The swap spread measures the extent to which banks are looking to hedge rising interest rates.

Banks are extending credit, creating new long‐duration assets, and they want to protect against a rise in short rates as the economy firms.

J an F eb Mar Apr May J un J ul Aug S ep Oct Nov Dec

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United S tates10 Y ear S wap S pread vs . S P 500

S&P 500 Index - Price (Right)10-Year Swap Spread, Basis Points (Left)

-50 0 50 100 150 200 250 300 350 400Interest R ate S wap: S pread, 10--Y ear - B id, B as is P oints - U.S .

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United S tates10 Y ear S wap S pread & 1 Y ear C hange in B ank C redit

W eekly Data - Las t 4 Y ears C orrelation: 0.82

Source: FactSet



The US consumer could surprise on the upside

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Households appear to have managed to get their financial obligations under control.

Core inflation has settled in to a nice 2% trend rate, likely adding an element of (price) stability to the economy.

'80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '101515

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United S tatesHous ehold F inancial Obligations R atio

Ratio, Financial Obligation For, Percent, Sa - United States Trendline: Average with 1st standard deviation

'92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '1290

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United S tatesP rice Level T argeting

2% Trend (INDEX) CPI-U All Items Less Food, Shelter, And Energy

Source: FactSet



Rising consumer confidence suggest rising multiples

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Consumer confidence and stock multiples are currently very positively correlated.

The 60% jump in confidence since October suggests multiples have room to rise in 2012.

10 15 20 25 30S &P 500 - P rice to E arnings

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60% Increase in Consumer Confidence

since October

S P 500 P /E & C ons umer C onfidenc eC orrelation: 0.81

S&P 500 - Price to Earnings (Right)Consumer Confidence Index (Left)

Source: Concept Courtesy of Jeb Terry of Aberdeen Investment Management



US semiconductors look like a dividend growth

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US semiconductor companies have continued to grow sales, earnings, cash flow and dividends at double digit rates since the tech crash.

After a decade of multiple compression, the group appears to offer tremendous value.

Long‐term Fundamental Growth

Valuations

Click here for GaveKal Platform Company Fund holdings information as of 12/31/2011. Portfolio composition will change due to ongoing management of the Fund. References to specific securities or sectors should not be construed as recommendations by the Fund, its Advisor or Distributor.

Source: GaveKal Capital

https://content.springcm.com/content/DownloadDocuments.ashx?aid=6995&Selection=Document%2C740fef9f-e2d3-e011-adf4-0025b3af184e%3B



Solid balance sheet and strong cash flow bolsters the case

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After the tech crash, semiconductor companies slashed capital spending and began a long balance sheet rationalization.

Net Debt as a % of Capital






Solid balance sheet and strong cash flow bolsters the case (cont.)

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Free Cash Flow as a % of Sales

Ten years into this process, the industry has on average negative net debt and is generating huge free cash flow






Japanese pharmaceuticals look like a dividend growth story too

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Over the last decade, Japanese pharmaceutical companies have grown their dividends on average almost 17%.

As of December 31, 2011, the group offers a 3% yield compared to the broader market.*

Long‐term Fundamental Growth

Valuations



*Past performance does not guarantee future results and is not indicative of the GaveKal Platform Company Fund performance.




Strong innovation spending and low debt supports the case

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Japanese drug companies have been increasing innovation spending for a decade.

R&D as a % of Sales






Strong innovation spending and low debt supports the case (cont.)

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Long‐term Debt as a % of Capital

They have financed this innovation push without an increase in debt.






We’ve reallocated the portfolio for what we think are better times ahead

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We’ve almost doubled our weighting to the technology sector, and have increased exposure to discretionary.

At the same time, we’ve scaled back our defensive positions in the healthcare and staples sectors.

As of 12/31/2011

As of 9/30/2011

Portfolio composition will change due to ongoing management of the Fund. References to specific securities or sectors should not be construed as recommendations by the Fund, its Advisor or Distributor. Percentages are allocated to equity invested.



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Important disclosures

The value of the securities held by the Fund will change due to general market and economic conditions and industry perceptions. Investments in non‐US issuers may involve unique risks including, foreign securities that trade in, and receive revenues in, foreign currencies are subject to the risk that those currencies will decline in value relative to the US dollar. Currency fluctuation, adverse political, economic or social developments could undermine the value of the Fund's investments. The securities of mid‐cap companies may be subject to more abrupt or erratic market movements and may have lower trading volumes.

Please consider the Fund’s investment objectives, risks, charges and expenses before investing. The prospectus or summary prospectus, that contains this and other information about the Fund is available by calling 888.998.9890 and should be read carefully prior to investing.

The GaveKal Platform Company Fund is distributed by Grand Distribution Services, LLC, 803 W. Michigan St., Milwaukee, WI, 53233.



For investors interested in the GaveKal Platform Strategy, please contact Shawn Paulk

at [email protected] or 704.844.6844

GaveKal Capital, LLC | 1099 18th St., Suite 2780 | Denver, CO 80202 | www.GaveKalCapital.com

GaveKal Platform Company Fund

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