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Dear Fellow Wintergreen Fund Shareholder,

EXCERPT FROM THE 2016 SEMI-ANNUAL REPORT SHAREHOLDER LETTER

Posted August 30, 2016

These continue to be challenging times for individual investors. After years of market momentum rather than corporate fundamentals driving the market, some of the most popular market driven stocks are beginning to lose their luster, causing popular index-investment products to begin to falter. If this continues, we believe popular index-investment products, touted by their big financial sponsors as safe and liquid, will prove to be less safe and less liquid than originally advertised.

Through our research, we have recently found that index funds and exchange traded funds ("ETF") simply are not as cheap as they may appear, often due to hidden Look Through Expenses. These expenses are embedded in stock prices that are paid by all investors in those companies and they arise from two main sources: executive compensation and share buybacks. Executive compensation in the form of equity awards dilutes current shareholders and often share repurchases are conducted to offset this dilutive impact. These share repurchases are not typically seen by investors because they are not boldly displayed. Many investors are only aware of the cost of executive compensation when viewed from the perspective of the executive who is granted an award. Wintergreen Advisers believes that share buybacks, often presented as beneficial to a company's shareholders, are better described as primarily being beneficial to executives, as our research shows that 53% of the average corporate buyback program is used to offset dilution from executive compensation plans. It is only the remaining 47% of corporate buybacks that are used for reinvestment in the company. The dilutive impact of these executive stock bonus plans tends to snowball over time, particularly when left largely unchecked by index funds, which vote in favor of management proxy proposals 95% of the time.

Things alter for the worse spontaneously, if they be not altered for the better designedly.
- Francis Bacon

Look Through Expenses include shares that are issued for executive bonus plans and the company's use of shareholder money to buy back shares, often at a high price. When stocks come wrapped in an ETF or index fund advertising low fees, we believe investors do not have the full picture of how much they are truly paying. Investors may think they are paying an expense ratio of 0.06%, the average expense ratio disclosed by index funds sponsors, but when considered in light of Look Through Expenses of the underlying companies, expenses can jump to an average total of 4.1% and potentially as high as 18%, based on our analysis of Look Through Expenses of companies that make up the S&P 500 Index.

Continue reading the 2016 Semi-Annual Report Shareholder Letter

View a recent listing of the Fund's Top 10 Holdings

David J. Winters, CFA
Portfolio Manager

The views contained in this report are those of the Fund's portfolio manager as of June 30, 2016, and may not reflect his views on the date this report is first published or anytime thereafter. The preceding examples of specific investments are included to illustrate the Fund's investment process and strategy. There can be no assurance that such investments will remain represented in the Fund's portfolios. Holdings and allocations are subject to risks and to change. The views described herein do not constitute investment advice, are not a guarantee of future performance, and are not intended as an offer or solicitation with respect to the purchase or sale of any security.


The Fund is subject to several risks, any of which could cause an investor to lose money. The Fund may purchase risk arbitrage securities (securities of companies involved in a restructuring) or distressed companies. These companies may not be successful in their restructuring and securities of distressed companies are generally more likely to become worthless than securities of more financially stable companies. Smaller companies involve substantial risk as these securities are traditionally more volatile in price than larger company securities. Securities rated below investment grade, sometimes called junk bonds, involve a greater degree of risk than investment grade bonds in return for higher yield potential. The Fund may be subject to interest rate risk which is the risk that debt securities in the Fund's portfolio will decline in value because of increases in market interest rates. By participating in derivative securities, the Fund may attempt to hedge (protect) against currency risk which is the risk that the value of foreign securities may be affected by changes in currency exchange rates. Derivatives can be volatile and involve various types and degrees of risks, depending upon the characteristics of a particular derivative. International investing involves certain risks and increased volatility not associated with investing solely in the U.S. These risks include currency fluctuations, economic or financial instability, lack of timely or reliable financial information or unfavorable political or legal developments. These risks are magnified in emerging markets. Short sale risk is the risk that the Fund will incur an unlimited loss if the price of a security sold short increases between the time of the short sale and the time the Fund replaces the borrowed security.

In light of these risks, the Fund may not be suitable for all investors.

Before investing you should carefully consider the Fund's investment objectives, risks, charges and expenses. The prospectus and summary prospectus contain this and additional information regarding the Fund. To obtain a prospectus or summary prospectus, please download from this site or call toll-free 1-888-468-6473. The prospectus and summary prospectus should be read carefully before investing. This website is not a solicitation for the Fund outside of the United States.

Foreside Fund Services, LLC, distributor (www.foreside.com)