Merk Absolute Return Currency Fund (MABFX)

The Fund publishes its currency exposure on a monthly basis. Below is the Fund’s currency exposure as of January 31, 2010:

All currency exposure figures displayed are relative to the U.S. dollar (USD). As such, the USD exposure is the inverse of each above figure. For example, 4.9% AUD exposure means the Fund has a -4.9% exposure to the USD. Total net USD exposure can be derived by taking the inverse sum of all individual currency exposures shown above. Total net USD exposure as at January 31, 2010, was -32.7%.

Below is a discussion of the Fund’s key currency exposures as of January 31, 2010.^†

Outside of the U.S. dollar, the Fund’s largest short position was the Swiss franc (CHF). The Absolute Resources model disfavored the CHF, and the risk overlay favored an increased negative position. From a macro perspective, we also held ongoing concerns surrounding central bank intervention to weaken the currency. The CHF declined through the month of January, returning -2.39% for the period 01/01/10 – 01/31/10, and hence contributed positively to overall Fund performance.

The Fund also held short positions in the euro (EUR) and Canadian dollar (CAD). The Absolute Valuation model disfavored the EUR, while the Absolute Carry model disfavored the CAD. The risk overlay favored an increased short position in the CAD. The Fund benefited from a decline in both these currencies through the month, with the EUR returning -3.22% and the CAD returning -1.64%, for the period 01/01/10 – 01/31/10.

The Fund’s largest long position through the month was the New Zealand dollar (NZD). The Absolute Momentum and Absolute Resources strategies both favored the currency, while the risk overlay reduced the overall exposure to the currency. We also held a favorable macro view on the currency. The NZD returned -3.06% during the period 01/01/10 – 01/31/10.

The Fund also held long positions in the Swedish krona (SEK) and Norwegian krone (NOK). For the period 01/01/10 – 01/31/10, the SEK returned -3.07%, while the NOK returned -2.70%. The Absolute Valuation strategy favored the SEK, while the Absolute Carry strategy favored the NOK.

Please note that currency exposures listed above are as of January 31st, 2010 and may change without notice. For an updated general discussion of the Fund’s currency exposures, please see the Model Explained section.

The Fund publishes its net open forward contracts on a monthly basis. Net open forward contracts as of January 31, 2010 are shown below*:

Currency	Settlement	Percent
AUD	02/19/10	4.9%
CAD	02/19/10	-24.2%
CHF	02/19/10	-27.5%
EUR	02/19/10	-15.2%
GBP	02/19/10	13.4%
NOK	02/19/10	25.9%
NZD	02/19/10	29.6%
SEK	02/19/10	25.8%

The Fund publishes its security holdings on a monthly basis. Security holdings as of January 31, 2010 are shown below:

Holding	Currency	Maturity	Percent
U.S. T-Bill	USD	03/18/10	16.7%
U.S. T-Bill	USD	03/25/10	13.3%
U.S. T-Bill	USD	04/29/10	38.3%
U.S. T-Bill	USD	05/20/10	31.7%

The discussion below is intended for those interested in details on how the Fund's investment process is implemented. For a more general discussion, please see the Adviser's process and prospectus.

Because many participants in the currency markets do not specifically transact in currencies for the primary objective of making a profit (tourists, governments, select corporations engaged in hedging activities), the Fund may seek to profit from market inefficiencies inherent in the currency market to seek positive absolute returns.

The quantitative factors employed are grouped into different sub-strategies that we call Absolute Valuation; Absolute Momentum; Absolute Carry; and Absolute Resources. Below is a discussion of how these groups influence the currency allocation as of February 1, 2010:

Absolute Valuation is an analysis of purchasing power differentials across regions. Currencies favored include: Swedish Krona; disfavored currencies include: the Euro, Swiss franc, Norwegian krone

Absolute Momentum is based on a trend following methodology. Currencies favored include: Australian Dollar, Japanese yen, British pound; disfavored currencies include: the euro, Swedish krone

Absolute Carry is based on an analysis of interest rate differentials. Currencies favored include: Australian dollar, Swedish krona; disfavored currencies include: U.S. Dollar

Note that different models may offset currency exposures; as an example, a disfavored currency exposure from the Merk Absolute Momentum model may be more than offset by a positive output from the Merk Absolute Carry model. Also note that the above list may not list all currencies that are favored or disfavored. Currency exposure may change without notice.

The Fund accepts investments in the following minimum amounts:

	Minimum Initial Investment	Minimum Additional Investment
Standard Accounts	$2,500	$100
Traditional and Roth IRA Accounts	$1,000	$100
Accounts with Systematic Investment Plans	$1,000	$100
Qualified Retirement, Pension or Profit Sharing Plans	$1,000	$100