Objective

The Hatteras Alpha Hedged Strategies Fund seeks to achieve consistent returns with low correlation to traditional financial market indices. The Fund uses the S&P 500 Index and the Hedge Fund Research, Inc. ("HFRI") Fund of Funds Composite Index as its benchmarks.

Strategy

The Fund pursues its investment objective by investing in four underlying funds: Long/Short Equity, Market Neutral Equity, Relative Value, and Event Driven.

Long/Short Equity. This strategy employs long and short trading in common stock, preferred stock, and convertible securities of U.S. and foreign issuers. This strategy attempts to achieve capital appreciation.

Market Neutral Equity. This strategy is designed to exploit equity market inefficiencies, which involves being simultaneously invested in long and short matched equity portfolios generally of the same size, usually in the same market. This strategy attempts to achieve capital appreciation.

Relative Value. This strategy is designed to take advantage of perceived discrepancies in the market prices of certain convertible bond, common stock, fixed income, and derivative securities. This strategy attempts to achieve current income, capital preservation, and capital appreciation.

Event Driven. This strategy is designed to invest in securities with prices that are or will be impacted by a corporate event. This strategy attempts to achieve capital appreciation.