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Investors questionnaire

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Nivas Nowell

The document provides information about FundX Upgrader Funds portfolio solutions. It consists of four Upgrader Funds that combine top performing mutual funds into a complete portfolio. There are also nine Investor Models that combine two or more Upgrader Funds into portfolios tailored for different investment goals and risk tolerances. The document outlines a three-step process for investors: 1) Set your investment goal based on time horizon, 2) Assess your risk tolerance through a questionnaire, 3) Match your risk tolerance and time horizon to select the appropriate Investor Model portfolio.

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Investor Questionnaire Three Easy Steps to a Complete Portfolio FundX upgrader Funds We Do the Upgrading for You! The FundX Upgrader Funds are simple portfolio solutions. With the four Upgrader Funds of funds, you can access a complete portfolio of what we believe are the top performing mutual funds available in one simple purchase. Investor Models A Managed Portfolio Designed for You! In addition to the Upgrader Funds, there are nine Investor Models that tactically combine two or more of the Upgrader Funds so you get a portfolio thats right for your particular investment goals. And, when you invest in a model, your portfolio is automatically rebalanced back to the original allocations so you dont take on more risk than you initially intended. This three-part Questionnaire will guide you to one of the Investor Models based on the amount of time you plan to be invested and the risk youre willing to take to achieve your goals. Start Now: Take the 3 steps towards your financial future. 1. Set Your Investment Goal 2. Find Your Risk Tolerance 3. Select a Model and Invest 866-455-FUND (3638) WWW.UPGRADERFUNDS.COM
1. Set your Investment Goal Break your investments down into specific pools of money based on your goals. For example, if you are planning to buy a car within the next six months, that money should be in a very low risk vehicle, like a money market account. The longer your time horizon, the more aggressive you can be with those assets, in order to maximize your potential gain. If your are investing for more than one goal, consider opening a separate account for each different time hori- zon. Your FundX Upgrader Funds investments should fall into one of the following four time frames. 2+ to 4 years 4+ to 7 years 7+ to 10 years 10+ years 2. Find Your Risk Tolerance To zero in on how much volatility you can handle in your portfolio, answer the following five hypothetical questions and rate yourself using the scoring system at the end. 1. Given that long-run stock market growth has averaged almost 11.5% per year over the past 40 years and that there are occasional sharp declines in the stock market (such as the 48% drop in the S&P 500 Index from March 2000 to September 2002), how would you react to a substantial decline in the stock market? A: I would be comfortable and would see it as a buying opportunity. B: I would be comfortable and would do nothing. C: I would be uncomfortable and would do nothing. D: I would be uncomfortable and switch to less volatile investments. 2. From an original investment of $50,000, your portfolio has grown 100% to $100,000, but it suddenly drops $20,000, down 20%. How would you react? A: I would sell the investments entirely B: I would make no adjustment to the investments in my portfolio C: I would make additional purchases in my portfolio D: I would try to avoid the investment that might suddenly decline by 20% 3. Your portfolio, from the previous question, is now worth $80,000, and it suddenly declines another $12,000 or 15%, to $68,000. How would you react? A: I would sell the investments entirely B: I would make no adjustment to the investments in my portfolio C: I would make additional purchases in my portfolio D: I would try to avoid the investment that might suddenly decline by 15% 4. If you could choose only one of the four portfolios characterized below, which would you select? Average Annual Return Highest Annual Return Lowest Annual Return Portfolio A: 5.0% 10.5% 0.0% Portfolio B: 8.0% 18.7% -9.8% Portfolio C: 11.0% 29.9% -22.1% Portfolio D: 15.0% 56.9% -39.9%
5. The bar charts below show annual rates of return earned by four hypothetical investments over a ten- year period. Each chart also shows the cumulative value of an initial lump sum deposit of $50,000 made at the beginning of year one, then held for ten years. Given the fluctuation of the returns for these four investments and their ending values, which would you choose? Investment A with a 5% average annual return and ending value of $81,673 Investment B with an 8% average annual return and ending value of $108,114 Investment C with an 11% average annual return and ending value of $142,225 Investment D with a 15% average annual return and ending value of $202,387 Investment A; 5% Annualized Return Investment A; 5% Annualized Return 50 200 30 10 150 -10 100 -30 -50 1 2 3 4 5 6 7 8 9 10 50 1 2 3 4 5 6 7 8 9 10 Years Years Investment B; 8% Annualized Return Investment B; 8% Annualized Return 50 200 30 10 150 -10 100 -30 -50 1 2 3 4 5 6 7 8 9 10 50 1 2 3 4 5 6 7 8 9 10 Years Years Investment C; 11% Annualized Return Investment C; 11% Annualized Return 50 200 30 10 150 -10 100 -30 -50 1 2 3 4 5 6 7 8 9 10 50 1 2 3 4 5 6 7 8 9 10 Years Years Investment D; 15% Annualized Return Investment D; 15% Annualized Return 50 200 30 10 150 -10 -30 100 -50 1 2 3 4 5 6 7 8 9 10 50 Years 1 2 3 4 5 6 7 8 9 10 Years
Score yourself: Here are the scores for each answer to the questions: 1. 2. 3. 4. 5. A: 20 points A: 10 points A: 10 points A: 5 points A: 5 points B: 15 points B: 15 points B: 15 points B: 10 points B: 10 points C: 10 points C: 20 points C: 20 points C: 15 points C: 15 points D: 5 points D: 5 points D: 5 points D: 20 points D: 20 points Use your total score to determine which of the four risk-tolerance categories you fall into: Your Score: Risk Tolerance: 25 to 40 Low 45 to 60 Average 65 to 80 Above Average 85 to 100 High 3. Select a Model Now that you have an idea of where you fall on the risk spectrum, match your risk tolerance (left) with the time horizon (top) to determine which model may be right for you. Remember, these are only sugges- tions; use them as a guide. Guide to Investment Models Investment Horizon Risk Tolerance 2+ to 4+ to 7+ to 10+ 4 years 7 years 10 years years C1 G2 A1 A1 10% HOTFX 25% HOTFX 30% HOTFX 30% HOTFX High 10% FUNDX 80% INCMX 30% FUNDX 25% RELAX 70% FUNDX 70% FUNDX 20% INCMX C2 M2 G2 G1 Model Name Above 10% HOTFX 90% INCMX 60% RELAX 40% INCMX 25% HOTFX 30% FUNDX 25% HOTFX 50% FUNDX Model Allocations Average 25% RELAX 20% INCMX 25% RELAX C2 M3 M1 G2 10% HOTFX 50% RELAX 20% HOTFX 25% HOTFX Average 90% INCMX 50% INCMX 50% RELAX 30% INCMX 30% FUNDX 25% RELAX 20% INCMX C2 C1 M4 10% HOTFX 10% HOTFX 15% HOTFX Low INCMX 90% INCMX 10% FUNDX 80% INCMX 15% FUNDX 70% INCMX Any account that you plan to hold for less than two years should not be invested in the FUNDX UPGRADER FUNDS. After arriving at your suggested model, you may elect to move either up or down the Risk Spectrum (back page) based on your perception of a reasonable risk/return trade-off. Thats okay, so long as you recognize that the further your selection drifts from the suggested model, the more out of sync you become with your answers to the questionnaire or your stated time horizon.
866-455-FUND (3638) WWW.UPGRADERFUNDS.COM FUNDX UPGRADER F U N D S Investor Models HOTFX A1 FUNDX Expected Risk G1 G2 RELAX M1 M2 M3 M4 C1 C2 INCMX Expected Return Risk/Reward Chart As you move from left to right among the models, higher potential returns go hand in hand with higher expected risk of the portfolio. Risk Spectrum of Investor profiles Conservative Moderate Growth Aggressive 10% HOTFX 15% HOTFX 20% HOTFX 25% HOTFX 25% HOTFX 10% HOTFX 50% RELAX 60% RELAX 30% FUNDX 30% HOTFX INCMX 90% INCMX 10% FUNDX 15% FUNDX 50% INCMX 40% INCMX 50% RELAX RELAX 25% RELAX 50% FUNDX FUNDX 70% FUNDX HOTFX 80% INCMX 70% INCMX 30% INCMX 20% INCMX 25% RELAX C2 C1 M4 M3 M2 M1 G2 G1 A1 Single fund 10% exposure 20% exposure Small position Equal weight A balanced Predominantly Single fund Most Greater Single fund Similar Single fund solution. to HOTFX to underlying in HOTFX portfolio of portfolio an equity-fund solution. diversified diversification solution. potential solution. Our most provides some growth funds provides two funds weighted portfolio, with Includes growth option. with similar All-equity- returns, but Our most conservative growth increases added upside could have towards 30% exposure balanced and Includes potential portfolio is with wider aggressive option. INCMX potential, potential for potential. more than equities. to INCMX to diversified weighting to returns to comprised diversification option. This is a total buffered by higher returns Substantial 50% in buffer market equity funds income- FUNDX primarily of and slightly portfolio may return portfolio INCMX. long-term, weight to equities. swings. only. oriented funds core growth less potential include a that includes with a deep INCMX aims to with an aim of funds, similar risk than substantial balanced cushion from buffer dampening to the Monthly HOTFX allocation to funds along INCMX. declines. Upgrader more with diverse Portfolio in the speculative bond and NoLoad equity funds. fixed-income FundX Higher risk oriented funds newsletter. exposure and designed to highest generate potential consistent returns. returns. Any account that you plan to hold for less than two years should not be invested in the FUNDX UPGRADER FUNDS. After arriving at your suggested model, you may elect to move either up or down the Risk Spectrum based on your perception of a reason- able risk/return trade-off. Thats okay, so long as you recognize that the further your selection drifts from the suggested model, the more out of sync you become with your answers to the questionnaire or your stated time horizon. 5
These four FUNDX UPGRADER FUNDS are managed portfolios each consisting of more than 20 underlying mutual funds. For many investors, the FUNDX UPGRADER FUNDS replace the need to build a diversified portfolio on their own. Next Steps... Review as needed: Occasionally, you should check your portfolio as you get closer to your invest- ment goal to adjust your model appropriately. Why rebalance? One reason to use the Investor Models is that the funds will perform differently based on current market conditions. Regular rebalancing causes the portfolio to adhere to your desired risk /return profile. Invest directly with the funds: Call 1-866-455-FUND and order an application and prospec- tus. Indicate on the application which model you have chosen. Submit the application with a check. We will automatically invest your deposit in the percent targets indicated by your selected model. Free automatic rebalancing: As a free service, we will automatically rebalance your portfolio each quarter to help keep you on course. Invest on the Web: Make it even easier on yourself by going to www.upgraderfunds.com to set up automatic deposit and more! Or, invest through a discount broker: Call your brokers trading desk and purchase shares in the percentages indicated by the model you have chosen. Periodically rebalance back to these target allocations. The Funds investment objectives, risks, charges and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company, and it may be obtained by calling 1-866-455-3863, or visiting www.upgraderfunds.com. Read it carefully before investing. Mutual fund investing involves risk. Principal loss is possible. Because each of these Funds is a fund of funds, an investor will indirectly bear the principal risks of the underlying funds, including but not limited to risks associated with smaller companies, foreign securities, emerging markets, non-diversi- fication, high yield bonds, fixed income investments, and short sales. Periodic Investment Plans do not assure a profit and do not protect against a loss in declining markets. Quasar Distributors, LLC, distributor (4/06) FUNDX UPGRADER F U N D S 866-455-FUND (3638) WWW.UPGRADERFUNDS.COM

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Investors questionnaire

  • 1. Investor Questionnaire Three Easy Steps to a Complete Portfolio FundX upgrader Funds We Do the Upgrading for You! The FundX Upgrader Funds are simple portfolio solutions. With the four Upgrader Funds of funds, you can access a complete portfolio of what we believe are the top performing mutual funds available in one simple purchase. Investor Models A Managed Portfolio Designed for You! In addition to the Upgrader Funds, there are nine Investor Models that tactically combine two or more of the Upgrader Funds so you get a portfolio thats right for your particular investment goals. And, when you invest in a model, your portfolio is automatically rebalanced back to the original allocations so you dont take on more risk than you initially intended. This three-part Questionnaire will guide you to one of the Investor Models based on the amount of time you plan to be invested and the risk youre willing to take to achieve your goals. Start Now: Take the 3 steps towards your financial future. 1. Set Your Investment Goal 2. Find Your Risk Tolerance 3. Select a Model and Invest 866-455-FUND (3638) WWW.UPGRADERFUNDS.COM
  • 2. 1. Set your Investment Goal Break your investments down into specific pools of money based on your goals. For example, if you are planning to buy a car within the next six months, that money should be in a very low risk vehicle, like a money market account. The longer your time horizon, the more aggressive you can be with those assets, in order to maximize your potential gain. If your are investing for more than one goal, consider opening a separate account for each different time hori- zon. Your FundX Upgrader Funds investments should fall into one of the following four time frames. 2+ to 4 years 4+ to 7 years 7+ to 10 years 10+ years 2. Find Your Risk Tolerance To zero in on how much volatility you can handle in your portfolio, answer the following five hypothetical questions and rate yourself using the scoring system at the end. 1. Given that long-run stock market growth has averaged almost 11.5% per year over the past 40 years and that there are occasional sharp declines in the stock market (such as the 48% drop in the S&P 500 Index from March 2000 to September 2002), how would you react to a substantial decline in the stock market? A: I would be comfortable and would see it as a buying opportunity. B: I would be comfortable and would do nothing. C: I would be uncomfortable and would do nothing. D: I would be uncomfortable and switch to less volatile investments. 2. From an original investment of $50,000, your portfolio has grown 100% to $100,000, but it suddenly drops $20,000, down 20%. How would you react? A: I would sell the investments entirely B: I would make no adjustment to the investments in my portfolio C: I would make additional purchases in my portfolio D: I would try to avoid the investment that might suddenly decline by 20% 3. Your portfolio, from the previous question, is now worth $80,000, and it suddenly declines another $12,000 or 15%, to $68,000. How would you react? A: I would sell the investments entirely B: I would make no adjustment to the investments in my portfolio C: I would make additional purchases in my portfolio D: I would try to avoid the investment that might suddenly decline by 15% 4. If you could choose only one of the four portfolios characterized below, which would you select? Average Annual Return Highest Annual Return Lowest Annual Return Portfolio A: 5.0% 10.5% 0.0% Portfolio B: 8.0% 18.7% -9.8% Portfolio C: 11.0% 29.9% -22.1% Portfolio D: 15.0% 56.9% -39.9%
  • 3. 5. The bar charts below show annual rates of return earned by four hypothetical investments over a ten- year period. Each chart also shows the cumulative value of an initial lump sum deposit of $50,000 made at the beginning of year one, then held for ten years. Given the fluctuation of the returns for these four investments and their ending values, which would you choose? Investment A with a 5% average annual return and ending value of $81,673 Investment B with an 8% average annual return and ending value of $108,114 Investment C with an 11% average annual return and ending value of $142,225 Investment D with a 15% average annual return and ending value of $202,387 Investment A; 5% Annualized Return Investment A; 5% Annualized Return 50 200 30 10 150 -10 100 -30 -50 1 2 3 4 5 6 7 8 9 10 50 1 2 3 4 5 6 7 8 9 10 Years Years Investment B; 8% Annualized Return Investment B; 8% Annualized Return 50 200 30 10 150 -10 100 -30 -50 1 2 3 4 5 6 7 8 9 10 50 1 2 3 4 5 6 7 8 9 10 Years Years Investment C; 11% Annualized Return Investment C; 11% Annualized Return 50 200 30 10 150 -10 100 -30 -50 1 2 3 4 5 6 7 8 9 10 50 1 2 3 4 5 6 7 8 9 10 Years Years Investment D; 15% Annualized Return Investment D; 15% Annualized Return 50 200 30 10 150 -10 -30 100 -50 1 2 3 4 5 6 7 8 9 10 50 Years 1 2 3 4 5 6 7 8 9 10 Years
  • 4. Score yourself: Here are the scores for each answer to the questions: 1. 2. 3. 4. 5. A: 20 points A: 10 points A: 10 points A: 5 points A: 5 points B: 15 points B: 15 points B: 15 points B: 10 points B: 10 points C: 10 points C: 20 points C: 20 points C: 15 points C: 15 points D: 5 points D: 5 points D: 5 points D: 20 points D: 20 points Use your total score to determine which of the four risk-tolerance categories you fall into: Your Score: Risk Tolerance: 25 to 40 Low 45 to 60 Average 65 to 80 Above Average 85 to 100 High 3. Select a Model Now that you have an idea of where you fall on the risk spectrum, match your risk tolerance (left) with the time horizon (top) to determine which model may be right for you. Remember, these are only sugges- tions; use them as a guide. Guide to Investment Models Investment Horizon Risk Tolerance 2+ to 4+ to 7+ to 10+ 4 years 7 years 10 years years C1 G2 A1 A1 10% HOTFX 25% HOTFX 30% HOTFX 30% HOTFX High 10% FUNDX 80% INCMX 30% FUNDX 25% RELAX 70% FUNDX 70% FUNDX 20% INCMX C2 M2 G2 G1 Model Name Above 10% HOTFX 90% INCMX 60% RELAX 40% INCMX 25% HOTFX 30% FUNDX 25% HOTFX 50% FUNDX Model Allocations Average 25% RELAX 20% INCMX 25% RELAX C2 M3 M1 G2 10% HOTFX 50% RELAX 20% HOTFX 25% HOTFX Average 90% INCMX 50% INCMX 50% RELAX 30% INCMX 30% FUNDX 25% RELAX 20% INCMX C2 C1 M4 10% HOTFX 10% HOTFX 15% HOTFX Low INCMX 90% INCMX 10% FUNDX 80% INCMX 15% FUNDX 70% INCMX Any account that you plan to hold for less than two years should not be invested in the FUNDX UPGRADER FUNDS. After arriving at your suggested model, you may elect to move either up or down the Risk Spectrum (back page) based on your perception of a reasonable risk/return trade-off. Thats okay, so long as you recognize that the further your selection drifts from the suggested model, the more out of sync you become with your answers to the questionnaire or your stated time horizon.
  • 5. 866-455-FUND (3638) WWW.UPGRADERFUNDS.COM FUNDX UPGRADER F U N D S Investor Models HOTFX A1 FUNDX Expected Risk G1 G2 RELAX M1 M2 M3 M4 C1 C2 INCMX Expected Return Risk/Reward Chart As you move from left to right among the models, higher potential returns go hand in hand with higher expected risk of the portfolio. Risk Spectrum of Investor profiles Conservative Moderate Growth Aggressive 10% HOTFX 15% HOTFX 20% HOTFX 25% HOTFX 25% HOTFX 10% HOTFX 50% RELAX 60% RELAX 30% FUNDX 30% HOTFX INCMX 90% INCMX 10% FUNDX 15% FUNDX 50% INCMX 40% INCMX 50% RELAX RELAX 25% RELAX 50% FUNDX FUNDX 70% FUNDX HOTFX 80% INCMX 70% INCMX 30% INCMX 20% INCMX 25% RELAX C2 C1 M4 M3 M2 M1 G2 G1 A1 Single fund 10% exposure 20% exposure Small position Equal weight A balanced Predominantly Single fund Most Greater Single fund Similar Single fund solution. to HOTFX to underlying in HOTFX portfolio of portfolio an equity-fund solution. diversified diversification solution. potential solution. Our most provides some growth funds provides two funds weighted portfolio, with Includes growth option. with similar All-equity- returns, but Our most conservative growth increases added upside could have towards 30% exposure balanced and Includes potential portfolio is with wider aggressive option. INCMX potential, potential for potential. more than equities. to INCMX to diversified weighting to returns to comprised diversification option. This is a total buffered by higher returns Substantial 50% in buffer market equity funds income- FUNDX primarily of and slightly portfolio may return portfolio INCMX. long-term, weight to equities. swings. only. oriented funds core growth less potential include a that includes with a deep INCMX aims to with an aim of funds, similar risk than substantial balanced cushion from buffer dampening to the Monthly HOTFX allocation to funds along INCMX. declines. Upgrader more with diverse Portfolio in the speculative bond and NoLoad equity funds. fixed-income FundX Higher risk oriented funds newsletter. exposure and designed to highest generate potential consistent returns. returns. Any account that you plan to hold for less than two years should not be invested in the FUNDX UPGRADER FUNDS. After arriving at your suggested model, you may elect to move either up or down the Risk Spectrum based on your perception of a reason- able risk/return trade-off. Thats okay, so long as you recognize that the further your selection drifts from the suggested model, the more out of sync you become with your answers to the questionnaire or your stated time horizon. 5
  • 6. These four FUNDX UPGRADER FUNDS are managed portfolios each consisting of more than 20 underlying mutual funds. For many investors, the FUNDX UPGRADER FUNDS replace the need to build a diversified portfolio on their own. Next Steps... Review as needed: Occasionally, you should check your portfolio as you get closer to your invest- ment goal to adjust your model appropriately. Why rebalance? One reason to use the Investor Models is that the funds will perform differently based on current market conditions. Regular rebalancing causes the portfolio to adhere to your desired risk /return profile. Invest directly with the funds: Call 1-866-455-FUND and order an application and prospec- tus. Indicate on the application which model you have chosen. Submit the application with a check. We will automatically invest your deposit in the percent targets indicated by your selected model. Free automatic rebalancing: As a free service, we will automatically rebalance your portfolio each quarter to help keep you on course. Invest on the Web: Make it even easier on yourself by going to www.upgraderfunds.com to set up automatic deposit and more! Or, invest through a discount broker: Call your brokers trading desk and purchase shares in the percentages indicated by the model you have chosen. Periodically rebalance back to these target allocations. The Funds investment objectives, risks, charges and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company, and it may be obtained by calling 1-866-455-3863, or visiting www.upgraderfunds.com. Read it carefully before investing. Mutual fund investing involves risk. Principal loss is possible. Because each of these Funds is a fund of funds, an investor will indirectly bear the principal risks of the underlying funds, including but not limited to risks associated with smaller companies, foreign securities, emerging markets, non-diversi- fication, high yield bonds, fixed income investments, and short sales. Periodic Investment Plans do not assure a profit and do not protect against a loss in declining markets. Quasar Distributors, LLC, distributor (4/06) FUNDX UPGRADER F U N D S 866-455-FUND (3638) WWW.UPGRADERFUNDS.COM