361 Absolute Alpha Fund
A series of the Investment Managers Series Trust
Supplement dated October 31, 2012
to the Summary Prospectus, Prospectus and Statement of Additional Information
dated March 1, 2012
(This Supplement replaces the Supplement dated September 21, 2012.)
Reduction of Advisory Fee and Expense Cap
Effective October 1, 2012, the Advisor has agreed to lower its management fee and reduce the limit on the Fund’s total annual fund operating expenses by 0.35% of the Fund’s average daily net assets. Accordingly, the Fund’s Summary Prospectus and Prospectus is supplemented by replacing the “Fees and Expenses” table on page 1 with the following table:
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Class A
Shares
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Class I
Shares
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Shareholder Fees
(fees paid directly from your investment)
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Maximum sales charge (load) imposed on purchases
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5.75%
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None
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Maximum deferred sales charge (load)
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1.00%
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1
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None
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Redemption fee if redeemed within 90 days of purchase (as a percentage of amount redeemed)
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2.00%
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2.00%
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Wire fee
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$20
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$20
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Retirement account fees (annual maintenance and redemption requests)
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$15
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$15
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Annual Fund Operating Expenses
(expenses that you pay each year
as a percentage of the value of your
investment)
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Management fees
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1.25%
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1.25%
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Distribution and/or service (12b-1) fees
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0.25%
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None
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Other expenses
2
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2.92%
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2.92%
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Dividend and interest expense on short sales
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1.44%
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1.44%
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Shareholder servicing fee
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0.04%
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0.04%
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All other expenses
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1.44%
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1.44%
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Acquired fund fees and expenses
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0.11%
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0.11%
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Total annual fund operating
expenses
1,3
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4.53%
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4.28%
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Fee waiver and/or expense reimbursement
2
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(0.83)%
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(0.83)%
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Total annual fund operating
expenses
3
(after fee waiver and/or expense reimbursement)
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3.70%
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3.45%
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1
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No sales charge applies on investments of $1 million or more, but a contingent deferred sales charge ("CDSC") of 1% will be imposed on certain redemptions of such shares within 12 months of the date of purchase.
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2
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Effective October 1, 2012, the Fund’s advisor has contractually agreed to waive its fees and/or pay for expenses of the Fund to ensure that total annual fund operating expenses (excluding any acquired fund fees and expenses, interest, taxes, dividend and interest expense on short positions, brokerage commissions and extraordinary expenses such as litigation expenses) do not exceed 2.15% and 1.90% of the average daily net assets of the Fund's Class A and Class I shares, respectively. This agreement is effective until February 28, 2013, and may be terminated by the Trust's Board of Trustees. The Fund’s advisor is permitted to seek reimbursement from the Fund, subject to certain limitations, for fees it waived and Fund expenses it paid for three years from the date of any such waiver or payment to the extent a class’s total annual fund operating expenses do not exceed the limits described above.
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3
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The total annual fund operating expenses and net operating expenses do not correlate to the ratio of expenses to average net assets appearing in the financial highlights table, which reflects only the operating expenses of the Fund and does not include acquired fund fees and expenses
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In addition, the table under “Example” on page 2 of the Summary Prospectus and Prospectus is replaced with the following table:
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1 Year
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3 Years
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5 Years
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10 Years
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Class A shares
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$926
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$1,795
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$2,672
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$4,902
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Class I shares
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$348
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$1,223
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$2,111
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$4,388
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The description of the Advisor’s management fee on page 18 of the Prospectus is revised to read as follows:
For its services, effective as of October 1, 2012 the Advisor is entitled to receive an annual management fee of 1.25%, calculated daily and payable monthly, as a percentage of the Fund’s average daily net assets.
The first paragraph under “Fund Expenses” on page 18 of the Prospectus is revised to read as follows:
The Fund is responsible for its own operating expenses. The Advisor has contractually agreed, however, to waive its fees and/or absorb expenses of the Fund to ensure that the total annual fund operating expenses (excluding acquired fund fees and expenses, interest, taxes, dividends and interest expense on short positions, brokerage commissions and extraordinary expenses such as litigation expenses) do not exceed 2.15% and 1.90% of the average daily net assets of its Class A shares and Class I shares, respectively. This agreement is effective until February 28, 2013, and may be terminated by the Trust’s Board of Trustees.
Investment Advisor
On October 1, 2012, the Advisor will manage all of the Fund’s assets directly and will not allocate any Fund assets to Sub-Advisors. Accordingly, please disregard all references to allocation of fund assets to Sub-Advisors in the Fund’s Summary Prospectus, Prospectus, and Statement of Additional Information Additionally, the “Multi-style Management Risk” paragraphs under the sections titled “Principal Risks” on page 4 of the Summary Prospectus and page 12 of the Prospectus are deleted.
The section titled “The Fund’s Principal Investment Strategies” on page 10 of the Prospectus is supplemented with the following:
The Advisor pursues the Fund’s investment objective by utilizing both internal and external research. External research is primarily
provided by Lighthouse Partners, an affiliate of the Advisor. This research uses various sources (including but not limited to prime broker relationships, form 13F filings, industry relationships, and news filters) and quantitative methodologies (which can include cluster analysis, factor and sector weightings) to seek to identify security characteristics that are most favored in the current market environment. The Fund’s strategy is managed based on a proprietary quantitative methodology developed by the Advisor.