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Investment Processes, Inverse and Leveraged ETFs
ETF Investment Policy
CIS considers “Inverse” and Leveraged (2X, 3X) Exchange Traded Funds (ETF) complex products. As such CIS has
adopted policies and procedures for use by the IAR of the firm. The CCO of CIS (John Riley) is responsible for the
implementation of the policies and procedures concerning inverse and leveraged ETF due diligence, pre purchase
suitability and post purchase monitoring. All IARs of CIS will be responsible for adhering to these policies and will
annually attest to their knowledge of and responsibility for these following policies and procedures.

In general no “double” (2X) or “triple” (3X) ETFs will be allowed for any CIS client portfolios unless there is an
advance written request and advance permission granted by the CCO. Inverse ETFs will be utilized and notification
will be given to the clients of their characteristics and purpose.

Due Diligence
The CCO will maintain a due diligence file on inverse ETFs for the firm. The file shall consist of no less than the
individual prospectus of the inverse EFT utilized. Additional information in the due diligence file may include but is
not exclusive to; Morningstar reports, Bloomberg reports, third party reviews, independent research performed by
the CCO, statistical reports from verified and reputable sources, internal communications concerning interim
events that may affect investment in inverse ETFs. If at any time the CCO determines that an inverse EFT
investment is inappropriate for client accounts there will be immediate communication to all IAR of the firm with
instructions concerning an appropriate course of action.

Pre Purchase Client Suitability
The CCO or designated individual of each client portfolio will collect sufficient information via a Client Investor
Profile to determine the suitability of inverse ETF purchases for that client portfolio. It will be disclosed to the
investor verbally during the portfolio design process about the nature of inverse EFT risk, volatility and complexity.
Additional disclosures will be made to each client, regardless of purchase, via the firm’s disclosure brochure 2A
(ADV 2A) and the firm’s Investment Advisory Contract (IAC). Each client will be advised that investment in inverse
ETF are not guaranteed and involve fluctuation and that a complete loss of principal is possible. In the case of the
use of inverse ETF clients will be advised of the nature of how these ETF react the opposite of the index they track.
Clients will be advised that even though the product “resets” daily their portfolio may hold the inverse ETF for
more than one day at a time.

Post Purchase Client Suitability
The CCO or designated individual of each client portfolio will monitor the client portfolio holdings of inverse ETFs
on an ongoing basis. Since inverse ETFs reset daily the overall return of the inverse ETF to the index it tracks is
relevant if the inverse ETF is held for more than one day. Any deviation by the inverse ETF from the index it tracks
by more than 5% will be cause for a review of any portfolio holding that inverse ETF. Since CIS does not allow the
purchase of “doubles” or “triples” for client portfolios a 5% deviation from a one to one correlation of the index is
considered a reasonable variance and at 5% worthy of note and additional monitoring. The CCO will communicate
immediately to all IAR of the firm if there is a deviation of 5% or more of an inverse ETF from the index it tracks. In
the case of inverse ETF the deviation of 5% applies to the opposite of the one to one correlation of the index the
inverse ETF tracks. The CCO will advise an appropriate course of action for all IAR to take during his communication
under these circumstances.

Inverse ETF Education
The CCO or designated individual will create an investor and IAR education program designed for each party. The
basics of the inverse ETF product will be explained. The use of the product will be explained. The inherent risks of
the product will be explained. Investors and IAR alike will be apprised of the ongoing monitoring that takes place of
inverse ETFs in the client portfolio. CIS may issue market letters for clients and IAR alike that will be of an
educational nature concerning inverse ETF. IAR will be apprised of their responsibility, as a fiduciary, to monitor all
ETF positions and respond immediately to any communications about ETF by the CCO.