Mutual Fund & Variable Insurance Trust N-CSRCertified annual shareholder report (management investment company)

December 31, 2019

Rational Equity Armor Fund

Dear Fellow Shareholders,

The Rational Equity Armor Fund (the Fund) seeks total return on investment, with dividend income an important component of that return. The Fund seeks to achieve this goal by investing in two baskets, a long equity portfolio and a volatility hedge overlay. Prior to December 13, 2019 the Fund was managed by another sub-advisor with a different investment strategy. The Fund is now managed by Equity Armor Investments and its investment strategy is the Equity Armor Hedged Dividend Strategy.

Fund Performance

Since the strategy conversion, the Fund returned +0.48% (Institutional Class), while the S&P 500 Total Return Index benchmark returned +2.05%. Prior to December 13, 2019, the Fund had a different sub-advisor that implemented a different strategy.

The Fund’s total annualized returns through 12/31/19 as compared to the S&P 500 Total Return Index were as follows:

The Fund’s maximum sales charge for Class “A” shares is 4.75%. Investments in mutual funds involve risks. Performance is historic and does not guarantee future results. Investment return and principal value will fluctuate with changing market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance information or the Fund’s prospectus please call the Fund, toll free at 1-800-253-0412. You can also obtain a prospectus at www.RationalMF.com.

Strategy Overview

The long equity portfolio is comprised of stocks included within the S&P 500 Index, whose prices are primarily driven by the economy rather than company specific information; are suitable or neutral to the current economy; do not exhibit excessive reaction to economic changes; and historically have tended to decrease less in value than the S&P 500 index during periods of declines in the index.

The volatility hedge overlay is comprised of Equity Armor Investments VOL365 Index, ticker: EAVOL (the “Index”). The Index was created to accommodate those looking to have long volatility exposure over a long period of time while avoiding the decay typically associated with such positioning. The Index selects positions that present the least potential for time decay while maintaining the highest correlation to the VIX price movement each day. The Fund’s volatility component seeks to track two-thirds the return of the EAVOL index.

Equity Armor Investments’ view in December, as the stock market wrapped up a fantastic year in equities, was to prepare for 2020. 2019 saw growth stocks expand at a rapid rate but remain very concentrated among a handful of stocks that provided much of the index returns, with the 64.4% return for the semiconductors total return index leading

the charge. The semis were led by the likes of AMD, which surged 148% as the chipmaker began focusing on the personal computer, server and gaming markets. Such tremendous gains are not necessarily economically driven but driven by company- specific news. The concentration of returns coming from a few sectors has continued in 2020. The S&P 500 Index has continued to become more concentrated in its returns, as four names, Microsoft, Apple, Google, and Amazon (“MAGA”) have accounted for 67% of the S&P 500 YTD returns as of 2/11/2020. It has been easy to construct a portfolio of MAGA stocks and semis and do well, however, investors can find themselves less diversified, which can increase potential, downside risk. The Rational Equity Armor Fund seeks to increase diversity by developing a portfolio focused on a broad range of economic factors.

The Fund was also able to buy volatility at historically low levels at the end of 2019 in an effort to add further risk management should a downturn occur.

We expect to see an increase in volatility this year due to the election, uncertainty surrounding the European trade with Brexit and the ongoing China phase 2 trade negotiations along with the potential risks that are unknown (such as a serious contagion from the coronavirus).. We expect there will be increased volatility both to the upside and the downside. Given these factors, we find it prudent for investors to consider a higher percentage of their portfolio in dividend paying stocks than in previous years, especially with bond yields so historically low.

The Economy

A bar’s direction represents whether that economic factor is currently above or below its moving one-year average lagged three months. The magnitude of the bar represents how far the economic factor is from that moving average.

The equity portfolio is selected based upon the 17 key economic variables shown above seeking to minimize these sensitivities as much as possible, and to create a portfolio that is expected to be driven by the economy rather than by idiosyncratic information. In this manner we aim to design a portfolio that receives a tailwind based upon current macroeconomic conditions.

The portfolio’s value is expected to change mostly due to changes in the economic factors rather than information specific to any single S&P 500 single stock or any market sector. 80% or more of the stocks selected pay a dividend, and no one sector consists of more than 25% of the Fund’s assets with an objective to maintain diversification and obtain yield with the Fund.

Volatility Conditions

The Fund’s goal is to take advantage of the historical mean reversion of volatility by (a) using the Equity Armor Investments VOL365 Index (EAVOL) to provide a volatility overlay as a hedge for downside equity risk exposure, and (b) to add alpha to equity portfolios by rebalancing equity to EAVOL index weightings in times of dislocation.

The EAVOL Index is a dynamic VIX futures trading system, which analyzes the market and selects the optimal VIX positions to hold to take advantage of shifts in the volatility futures expiration curve.

The Fund also attempts to add alpha to the equity holdings by rebalancing a core long holding in the EAVOL Index. The VIX index is simply an index, a calculation, which can go up in value or down in value depending on the S&P 500 index options’ 30-day expectation of implied volatility. Historically, it has fluctuated in a range over time. Opportunities arise when stocks go lower and the EVAOL Index, which seeks to correlate to near dated VIX futures, rises in value. The Fund rebalances the EAVOL Index and equity holdings daily, on days of market volatility, and uses the profit proceeds from exposure to the EAVOL Index to buy stocks that are typically lower. The reverse is also true; when stocks go higher and the EAVOL Index typically goes lower, opportunities to sell high and buy low can potentially emerge.

Summary

As experienced investors and traders, we at Equity Armor Investments note two typical patterns in the stock market that given a long enough period, S&P 500 stocks have gone higher while stocks experience major corrections along the way. We are going into our 11^th year in the bull market, and along the way each time the VIX has neared the 11 level (plus or minus 20%), we seem to see the volatility pendulum swing back to the other extreme within a few months. The Fund’s constant volatility overlay provides consistent positioning and diversity that seeks to avoid wishing or jumping on momentum. We cannot say for certain when the next correction will come, but we believe the Fund invests in a prudent and effective manner to weather any storm while potentially increasing wealth over time. We believe that employing an investment strategy that is data -driven; seeks to invest in stocks that should experience less volatility than the market on down days; and maintains a volatility overlay will enable the Fund both to seek capital appreciation and take advantage of volatility in the market over full market cycles

Sincerely,
Joe Tigay
Brian Stutland
Luke Rahbari
Portfolio Managers

This report is intended for the Fund’s shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current Fund prospectus. To obtain a prospectus or other information about the Fund, please visit www.RationalMF.com or call 1-800-253-0412. Please read the prospectus carefully before investing.

3275-NLD-2/21/2020

December 31, 2019

Rational Tactical Return Fund

Dear Fellow Shareholders,

The Rational Tactical Return Fund (the “Fund”) seeks total returns consisting of capital appreciation and income by making investments in long and short call and put options on futures contracts on the S&P 500 Index, as well as cash, and cash equivalents. 2019 was the second full year for Warrington to be the Sub Advisor for the Rational Tactical Return Fund. For the year, the Fund posted a +8.35% (Class I) return versus the +31.49% for its S&P 500 TR Index (S&P).

Investment Strategy

The Sub Advisor’s strategy seeks to achieve its investment objective in three ways: (1) Premium Collection – the Fund collects premiums on options it sells; (2) Volatility Trading – the Fund may enter into positions designed to hedge or profit from either an increase or a decrease in Index volatility; and (3) Trend Following – the Fund may increase or decrease the balance of puts and calls based on trending market direction. The Fund is designed to produce returns that are not correlated with equity market returns. The Fund employs strict risk management procedures, supported by both technical and fundamental analysis, that are intended to provide consistency of returns and to mitigate the extent of losses.

Fund Performance

The Tactical Return Fund generated a 2019 return of +8.35% (Class I), versus +31.49% for its S&P 500 TR Index (S&P) benchmark.

As other competitors in the Fund’s Morningstar category are more closely correlated with equity markets, the Fund lagged some of those competitors. Outperforming equity markets is not the target of the fund, but rather the goal is to achieve consistent positive returns in a variety of market environments. Using both quantitative and fundamental indicators to ascertain near-term market movements, Warrington was able to navigate the markets and minimize losses during volatile periods due to stringent risk management, while concurrently seeking profit opportunities. That balanced approach with a healthy respect for risk management may have caused the Fund to lag category leaders, but the same approach helps protect the Fund during volatile periods.

The Fund’s total annualized returns through 12/31/19 as compared to the S&P 500 TR Index (S&P) benchmark were as follows:

The Fund’s maximum sales charge for Class “A” shares is 4.75%. Investments in mutual funds involve risks. Performance is historic and does not guarantee future results. Investment return and principal value will fluctuate with changing market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-

end performance information or the Fund’s prospectus please call the Fund, toll free at 1-800-253-0412. You can also obtain a prospectus at www.RationalMF.com.

Summary

In its second full year as the Fund’s Sub Advisor, Warrington continued to provide strong absolute and relative returns, while consistently managing market risks. The Fund’s assets grew significantly in 2019, and we seek to continue that growth as equity markets have become richly valued in recent months, increasing the likelihood of future market declines. In volatile markets, Warrington ensures that risk management is paramount, while concurrently evaluating the risk / reward relationship of the opportunities presented by those volatile markets.

Sincerely,

Scott Kimple and Mark Adams

Portfolio Managers

This report is intended for the Fund’s shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current Fund prospectus. To obtain a prospectus or other information about the Fund, please visit www.RationalMF.com or call 1-800-253-0412. Please read the prospectus carefully before investing.

4216-NLD-2/14/2020

December 31, 2019

Rational Dynamic Brands Fund

Dear Fellow Shareholders,

The Rational Dynamic Brands Fund (the “Fund”) seeks long-term capital appreciation by investing in a focused group (25-50 holdings) of the most attractive & relevant brands contained in the Alpha Brands Consumer Spending Index (the “Index”) which has 200 constituents. Security selection is driven by a combination of fundamental and technical factors as well as using a proprietary brand relevancy scoring system that pulls from >40 business assessment factors using a qualitative and quantitative approach. In times of economic turmoil or unusually high equity valuations where equity risk is deemed high, the Fund may also invest in cash and cash equivalents and in asset classes that have historically been safe havens when equities were experiencing drawdowns. De -risking is designed to happen in stages. Risk management decisions are guided by: relative strength leadership, economic growth trajectory, the Fund management team’s assessment of the dominant equity trend, economic growth profile, consumer health, equity valuations, technical analysis, FED policy, investor sentiment, and changes in interest rates, credit spreads, and asset class volatility trends.

Investment Strategy

The Fund normally pursues its investment objective by investing primarily in equity securities contained in the Alpha Brands Consumer Spending Index. The Index contains 200 leading and relevant Brands across all sectors but focuses on 70+ consumption-focused sub -industries. The Fund invests primarily in companies with market capitalizations above $1 billion, although it may invest without limit in companies of any market capitalization so long as the companies are included in the Brands Index. The Fund may invest in non-U.S. equities so long as those equities are included in the Index. The Fund is agnostic to style, market cap, and geography and is designed to track the global household spending theme via the most relevant business-to-consumer and business-to-business brands from within the Index.

The Fund is managed with a Core + Tactical approach where core brands, also known as Mega Brands, will typically hold higher portfolio weights than tactical brands. Mega Brands operate with secular growth tailwinds and exhibit leadership characteristics in key consumption industries relative to the Brands Index universe.

These are the characteristics of a Mega Brand or Emerging Mega Brand:

Tactical brands exhibit attractive technical set-ups and/or have near -term catalysts that could offer investment opportunities in out-of-favor brands (or sub-industries) from within the Brands Index universe. Tactical brands are often contrarian in nature and complement or diversify core Mega brands. Tactical allocations are often follow-on ideas from within attractive industries where the Investment Committee has determined greater exposure is warranted. The Fund management team may also, at times, choose to add tactical exposure on oversold conditions using highly liquid index and/or sector ETF’s as a supplement to the leading brands in the portfolio. The final part of the investment process determines the tactical target for exposure to equities. Target equity exposure, and portfolio

risk, are updated in real-time based on economic, household consumption, corporate, technical, and sentiment investment factors.

Fund Performance

On 10/17/17, the Rational Defensive Growth Fund was converted and renamed the Rational Dynamic Brands Fund. Since Accuvest Global Advisors took over as the sub-advisor for the Fund, performance has been strong on a relative and absolute basis. Consumer stocks have performed well driven by the wealth effect and the consumption portion of the economy remains the key driver of economic activity. As of 12/31/19, the Rational Dynamic Brands Fund gained a cumulative +35.24% and +14.67% annualized (Class I) since being converted to the Brands portfolio on 10/17/17. Over the same timeframe, the S&P 500 TR Index return was a cumulative +31.88% and +13.37% annualized. Additionally, the monthly beta for the Fund is .89 or 11% less volatile than the market since becoming the Dynamic Brands strategy.

For 2019, the Fund provided investors with an attractive return while managing risks. The Fund underperformed the S&P 500 almost exclusively due to holding a 20% cash buffer for January and part of February. The Fund’s prospectus allows the team to be fully invested or hold above average holdings in cash as a buffer for potential downside risk. In 2018, this flexibility & ability to hold up to 40% cash helped the Fund outperform the S&P 500 by over 500bps. The team’s goal in managing the Fund is balanced between providing strong total returns and maintaining a lower risk profile than other Fund peers. The ride our investors take is as important to us as them reaching their targeted destination. This portfolio flexibility remains a key differentiator in a world where the typical active mutual fund must remain fully invested at all times, in good times or bad.

Our outperformance since taking over the fund on 10/17/17 was driven primarily by an active decision to overweight growth versus value, cyclicals versus defensives, and domestic versus international stocks. Beginning in 2019, the Fund management team significantly increased its exposure to non-U.S. stocks while maintaining its focus on growth brands. International equities, particularly Emerging Market equities have significantly underperformed domestic equities and now appear significantly undervalued on an absolute basis and relative to U.S. equities. A falling U.S. Dollar should offer a new tailwind to non-U.S. stocks. In a low growth and low interest rate world, growth stocks should continue to outperform value stocks but the Fund management team will continue to monitor the relative performance of value stocks versus growth stocks and has flexibility to increase exposure to value should the evidence warrant the switch. This portfolio flexibility offers a key competitive advantage over Fund peers.

The Fund’s top 3 over-weights relative to the S&P 500 as of 12/31/2019 are Consumer Discretionary (33.98% versus 9.73% for the S&P 500 Index) Communication Services (28.63% versus 10.35% for the S&P 500 Index), and Real Estate (3.91% versus 2.91% for the S&P 500 Index). The Fund’s top 3 under-weights relative to the S&P 500 are Healthcare (3.99% versus 14.15% for the S&P 500 Index), Financials (1.99% versus 12.92% for the S&P 500 Index) and Industrials (0% versus 9.02% for the S&P 500 Index). As of 12/31/2019, cash makes up less than 2% of the total fund holdings.

The Fund will typically be overweight the leading consumer brands given its focus on consumer spending but has no mandate to do so on an ongoing basis relative to the other brands included in the Brands Index 200.

The Fund’s total annualized returns through 12/31/19 as compared to the S&P 500 Total Return Index were as follows. Reminder, the Fund was converted to the Dynamic Brands Equity Strategy 10/17/17:

The Fund’s maximum sales charge for Class “A” shares is 4.75%. Investments in mutual funds involve risks. Performance is historic and does not guarantee future results. Investment return and principal value will fluctuate with changing market conditions so that when redeemed, shares may be worth more or less than their original cost.

Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance information or the Fund’s prospectus please call the Fund, toll free at 1-800-253-0412. You can also obtain a prospectus at www.RationalMF.com.

Summary

Consumer spending is the key driver of U.S. economic growth at 71% of GDP. Household spending also drives global activity at roughly 60% of world GDP. An intelligently constructed and risk aware portfolio of the most relevant and powerful Mega Brands, Emerging Mega Brands, and the brands offering attractive Tactical Opportunities offers investors precise and thoughtful exposure to the engine of global economic growth called Consumerism. Our goal is to construct portfolios that track “lifetime spending” patterns via the leading brands winning our mind and wallet-share. As we enter 2020, our view of the consumer sector is positive even as the macro-economic environment has softened year-over-year. Wages are rising, household debt to disposable income is low relative to historical standards, and consumer sentiment remains positive. With historically low unemployment and ample opportunities for switching jobs and obtaining wage gains, consumption capacity remains attractive. The economic datapoints outside the U.S. remain mostly weak but appear to be troughing. Because of this and including Fund management’s expectation of tame U.S. Dollar appreciation, an overweight position in non-U.S. brands should remain a key competitive advantage versus Fund peers, who are anchored to owning U.S. stocks by prospectus. The Fund management team’s flexibility continues to offer investors a key advantage over traditional U.S. large cap peers.

At the tail end of the economic cycle, consumer spending tends to shift from price insensitivity to price conscious. The Dynamic Brands portfolio currently reflects a focus on the brands that exhibit pricing power and resiliency in a slower overall economy. Many of the secular themes the Fund invests in will continue regardless of how the economic cycle progresses. The Fund currently holds a combination of Iconic Brands across important spending categories like: E- Commerce, Specialized Restaurants, Media & Entertainment, Luxury & Athleisure Apparel & Footwear, Mobile & Digital Payments, Artificial Intelligence, Medical Robotics, Genetics, Cloud Computing, Consumer Electronics, Warehouse shopping, Home Improvement, Video Gaming, Credit Card Processing & mobile payments, Wireless Towers & 5G, Global Asset Management & Private Equity, Cosmetics & Personal Care Products, Luxury Automotive & EV Automotive, Social Media, Live Entertainment, Digital Ad Adoption, Streaming Media, Luxury Home Furnishings, Semiconductors focused on AI & Video Gaming, Online Dating, and brands vital to the consumption supply chain. As demographics and spending patterns evolve and/or the economic data changes, so too will our allocations to the leading brands.

In times of uncertainty or high market stress, the Fund can reduce equity exposure. As of 12/31/2019, the Fund held a nominal cash position based on our bullish bias. We have many tools at our disposal to help protect capital when we see evidence of a prolonged economic slowdown or if a negative change in liquidity or access to credit begins to present itself.

Successful investing requires a long-term outlook focused on objective criteria that create value. Given how important the global consumer spending theme is to overall world GDP, we continue to believe a dedicated allocation to the consumer makes sense for every investor. An allocation focused on the most relevant and innovative brands offers this option in a know what you own and why you own it approach. We anticipate being opportunistic with our cash flexibility sometime during 2020 and will continue to invest in the most relevant Mega Brands serving global consumers, particularly if they go on sale.

Sincerely,

David Garff, Eric Clark, and James Calhoun
Portfolio Managers

This report is intended for the Fund’s shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current Fund prospectus. To obtain a prospectus or other information about the Fund, please visit www.RationalMF.com or call 1-800-253-0412. Please read the prospectus carefully before investing.

4214-NLD-2/14/2020

December 31, 2019

Rational Strategic Allocation Fund

Dear Fellow Shareholders,

The Rational Strategic Allocation Fund (the “Fund”) seeks current income and moderate appreciation of capital by investing in a combination of mutual funds and exchange-traded funds (“ETFs”). During 2019, the Fund underperformed the S&P 500 Total Return Index⁽¹⁾ and its Strategic Allocation Indices Blend (“BAIB”)⁽²⁾benchmark with a +12.49% (Class A) return versus +31.49% for the S&P 500 Total Return Index and +22.18% for the BAIB benchmark. The Fund’s relative performance was constrained by its overweight allocation to fixed income funds.

Investment Strategy

The Fund seeks to achieve its objective by investing in a combination of underlying mutual funds and ETFs. We invest in equity, income and uncorrelated investment strategies. We select underlying funds using a fundamental research process, including a top-down analysis of market conditions and investment category historical performance during various market conditions. We also perform a bottom-up analysis of each potential fund for investment, including investment allocations, investment valuations and characteristics, positioning, historical performance during various market conditions and each fund’s portfolio manager’s outlook.

Fund Performance

During 2019, the Fund returned +12.49% (Class A), trailing its BAIB benchmark’s return of +22.18%. The Fund benefited from its allocations to US equity funds as this was one of the best performing global asset classes in 2019 due to the accommodative monetary policy of the US Federal Reserve. Headline concerns regarding global growth, the ongoing US-China trade war, and geopolitical turbulence in the Eurozone were pushed aside by the US equity market as the Fed cut interest rates three times over the course of the year. The S&P 500 Index continued to make new record highs and returned +31.49% in 2019. Fixed income also benefited from the Fed’s rate cuts, and the Bloomberg Barclays U.S. Aggregate Bond Index⁽³⁾returned 8.72% in 2019. Despite the strong performance of the Fund’s allocations to equity and alternative funds, the Fund trailed its BAIB benchmark due to an overweight allocation to fixed income funds.

Most of the holdings performed to our expectations. The top performing funds held in the portfolio during 2019 were: The Catalyst Enhanced Core Fund (OIPIX +29.01%), the Rational Dynamic Brands Fund (HSUTX +27.03%), and the Rational NuWave Enhanced Market Opportunity Fund (NUXIX +24.38%). The weakest performing funds held in the portfolio during 2019 were: The Context Insurance Linked Income Fund (ILSIX -1.91%) and the Rational Income Opportunities Fund (RTFIX +2.04%).

The Fund’s total annualized returns through 12/31/19 as compared to the S&P 500 Total Return Index were as follows:

The Fund’s maximum sales charge for Class “A” shares is 4.75%. Investments in mutual funds involve risks. Performance is historic and does not guarantee future results. Investment return and principal value will fluctuate with changing market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance information or the Fund’s prospectus please call the Fund, toll free at 1-800-253-0412. You can also obtain a prospectus at www.RationalMF.com.

Summary

The Rational Strategic Allocation Fund underperformed its Strategic Allocation Indices Blend benchmark during 2019. The majority of the holdings performed to our expectations and the Fund benefited from its allocations to equity and alternative funds. Successful investing requires a long-term outlook focused on objective criteria that create value. We have adopted this outlook for the Rational Strategic Allocation Fund, and we are glad that you have decided to share in our vision.

Sincerely,

David Miller
Portfolio Manager

This report is intended for the Fund’s shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current Fund prospectus. To obtain a prospectus or other information about the Fund, please visit www.RationalMF.com or call 1-800-253-0412. Please read the prospectus carefully before investing.

4215-NLD-2/14/2020

December 31, 2019

Rational/ReSolve Adaptive Asset Allocation Fund

Dear Fellow Shareholders,

The Rational/ReSolve Adaptive Asset Allocation Fund (“the Fund”) commenced trading on March 16^th, 2018, when ReSolve officially became the Fund’s sub-advisor, replacing the previous manager. ReSolve Asset Management is a quantitative, systematic investment firm that relies on in-depth, academically backed and empirically proven practices for strategy construction.

Our Adaptive Asset Allocation¹ methodology used in the Fund combines the strong historical return character of the momentum factor with global diversification and risk management, seeking to maximize both risk-adjusted returns and the compounding of positive rolling periods, with controlled maximum losses. The goal is to deliver an absolute-return strategy designed to thrive in most economic and market environments.

Strategy Benefits

Global Markets are in constant flux, from periods of strong growth, to inflationary regimes, to acute deflationary busts. This reality means investors need to access strategies that can go anywhere in the world with agility. Adaptive Asset Allocation (AAA) fulfills this role by creating dynamic portfolios using proprietary quantitative innovations that systematically emphasize global assets with strong and persistent trend and momentum characteristics, while seeking to maximize diversification and minimize total portfolio volatility.

General Market Review

Global asset classes recovered from their previous dismal year and experienced a strong 2019. Instead of policy shocks and market crashes, the Fed and other major central banks provided investors with the ample liquidity and dovish communication they’ve grown accustomed to (or rather, dependent on) and was once again the main driver for positive returns. For the first time in history, the Fed flirted with the possibility of resorting to negative nominal interest rates when it announced that policy rates were no longer limited to zero on the lower bound. The FOMC has also made public that they will now be looking at inflation over a longer rolling period, setting an implicit inflation target above 2% for the coming years.

The US-China Trade War dominated headlines as the see-saw of positive and negative developments served as temporary catalysts for risk appetite. As the year drew to a close, both sides agreed to an initial Phase One agreement that should be used as a framework for a more comprehensive trade deal in the coming year. The announcement led to a classic risk-on environment in global markets, as capital flowed towards global equities and away from sovereign bonds. It was the Christmas rally investors had been hoping for and were deprived of in 2018.

Global economic activity slowed considerably to its lowest rate since the global financial crisis, in no small part due to rising trade barriers between many of the world’s largest economic regions. Increased protectionism drove capital spending and industrial production downwards, while lower unemployment kept consumers spending and confidence afloat, partially counterbalancing some of the negative pressures. This eventually led to interest rate cuts and renewed balance sheet expansion by both the Fed and the ECB. The latter’s decision to appoint former head of the IMF Christine Lagarde to its helm is an indication that the Europeans recognize the exhaustion of monetary power at this stage and the likely need for fiscal largesse in the future. The Fed was also forced to provide emergency liquidity to the REPO market (an important source of funding to financial institutions), marking the first time since 2008 that it’s had to intervene in money markets and raising questions of trouble brewing under the surface.

Figure 1. Global Asset Classes in 2019 (Strategy Universe)

Figure 2. Best and Worst Performing Asset-Classes in 2019 (Strategy Universe)

Portfolio Review

Policy-shock driven market crashes like we saw in October of 2018 are typically followed by a stance reversal by the monetary authority and a subsequent recovery in risk assets (as we described inthis short video²) . 2019 was no different, with a strong rally in global equities, natural resources and sovereign bonds (to name a few), offering investors ample opportunities to harvest returns.

Adaptive Asset Allocation’s risk-balanced approach to portfolio allocations drew returns from a diverse group of global asset classes and closed the year with a strong +18.3% return. US and German sovereign bonds, along with our

exposures to global equities and US Real Estate, were the top contributors to performance. There were few detractors, most notably our positions in the Australian and Canadian dollars, as well as WTI crude oil. The portfolio rose in 8 out of the year’s 12 months and in the first 3 quarters, trimming some of its gains in the final quarter. It is worth noting that the strategy experienced positive months in both May and August (when global equity markets suffered losses) and ended the year with 0.1 correlation to US equities (as measured by the S&P 500).

The Fund’s total annualized returns through 12/31/19 as compared to the ICE BofAML 3 Month Treasury Bill⁽²⁾and the S&P 500 Total Return Index were as follows:

The Fund’s maximum sales charge for Class “A” shares is 5.75%. Investments in mutual funds involve risks. Performance is historic and does not guarantee future results. Investment return and principal value will fluctuate with changing market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance information or the Fund’s prospectus please call the Fund, toll free at 1-800-253-0412. You can also obtain a prospectus atwww.RationalMF.com.

The Fund acquired all of the assets and liabilities of Chesapeake Fund, LLC (the “Predecessor Fund”) in a tax free reorganization on December 31, 2016. In connection with this acquisition, shares of the Predecessor Fund were exchanged for Institutional Shares of the Fund. At the time of the reorganization, the Predecessor Fund had an investment objective and strategies that were, in all material respects, the same as those of the Fund, and was managed in a manner that, in all material respects, complied with the investment guidelines and restrictions of the Fund. Effective February 27, 2018, the Fund’s investment strategy changed, and a new Sub Advisor replaced the prior sub-advisor. Consequently, prior performance may not reflect the Fund’s current operations.

Volatility ahead?

As of the writing of this commentary, the US has just executed an airstrike that killed the most senior Iranian general in a visit to the Iraqi capital, sending risk-off ripples across global markets. Gold, crude oil and sovereign bonds rose while global equities sold off. Although markets have mostly recovered after Iran’s restrained initial response, retaliations seem unlikely to stop here. As tensions escalate and the tectonic plates of the world’s most combustible region shift, we should expect more volatility in the coming weeks and months. We remain convinced that nimble and adaptive strategies that can invest globally will serve an important role in investors’ portfolios, helping them navigate the uncertainty that lies ahead.

Sincerely,

ReSolve Asset Management

Strategy Sub-Advisor

This report is intended for the Fund’s shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current Fund prospectus. To obtain a prospectus or other information about the Fund, please visit www.RationalMF.com or call 1-800-253-0412. Please read the prospectus carefully before investing.

4218-NLD-2/14/2020

December 31, 2019

Rational Iron Horse Fund

Dear Fellow Shareholders,

The Rational Iron Horse (the “Fund”) was down 1.26% (Class I) during the last fiscal year ended December 31, 2019. During that same period the S&P 500 was up 31.48% and the CBOE S&P 500 BuyWrite Index (BXM) was down 15.68%. The Fund underperformed due to the hedged positions in the portfolio.

Investment Strategy

The Fund seeks to achieve its investment objective by investing primarily in:

The Fund selects common stocks of domestic and foreign issuers with market capitalizations of at least $2 billion that are traded on a U.S. stock exchange. We combine (1) fundamental analysis, (2) technical analysis and (3) proprietary risk management techniques to seek total returns with less volatility than equity markets in general.

Fund Performance

In a volatile market, our covered calls fund has historically done well. Uncertainty about the economic outlook and concern over rising interest rates led to a rise in volatility. We believe that volatility will likely increase in the coming quarters, and potentially that would be beneficial for our single stock option strategy, as we seek more income.

During the last 12 months, the Fund was mostly equal weighted relative to the S&P 500 sector. The Fund’s covered call strategy seeks to outperform in sideways to lower trending markets, which is consistent with the Fund managers’ long-term experience in managing covered call strategies.

The Fund’s total annualized returns through 12/31/19 as compared to the CBOE BuyWrite Index were as follows:

The Fund’s maximum sales charge for Class “A” shares is 5.75%. Investments in mutual funds involve risks. Performance is historic and does not guarantee future results. Investment return and principal value will fluctuate with changing market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance information or the Fund’s prospectus please call the Fund, toll free at 1-800-253-0412. You can also obtain a prospectus at www.RationalMF.com.

Our covered call strategy on average seeks to run at 50-60% of the market volatility. When the market trends upward like it has over the last year, a covered call strategy can tend to underperform a long only strategy. The goal of the strategy is not to outperform the market at every market interval, but to seek a good total return with less volatility than the market. Unfortunately, the combination of a rapidly rising market and hedged positions last year resulted in the Fund underperforming its benchmarks for 2019.

Sincerely,

The Iron Horse Fund Team

This report is intended for the Fund’s shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current Fund prospectus. To obtain a prospectus or other information about the Fund, please visit www.RationalMF.com or call 1-800-253-0412. Please read the prospectus carefully before investing.

4251-NLD-2/25/2020

December 31, 2020

Rational NuWave Enhanced Market Opportunity Fund

Dear Fellow Shareholders,

The Rational NuWave Enhanced Market Opportunity Fund (the “Fund”) seeks long-term capital appreciation (with the goal of generating superior risk-adjusted returns compared with a typical long-only, non-leveraged equity portfolio) by investing in a combination of equity securities and diversified managed futures. During 2019, the Fund posted a positive return of 24.38% (Class I), significantly outperforming the SG CTA Mutual Fund Index (which generated a positive return of just 3.37%) though lagging the S&P 500 Total Return Index (which posted a positive return of 31.49%). For the year, the Fund generated significant gains from its long-only equity trading, while also adding incremental gains from its long and short exposures to both financial futures and commodity futures.

Investment Strategy

The Fund seeks to achieve its objective by investing in an actively managed equity portfolio (the “Equity Component”) and a broadly diversified managed futures portfolio (the “Futures Component”).

The Equity Component is comprised primarily of common stocks and exchange-traded funds invested in equity securities of US companies. Although the Fund may invest in companies of any market capitalization without limit, the Fund invests predominantly in companies with market capitalizations of $5 billion or more. The Equity Component employs a systematic process to identify repetitive patterns of price behavior that are indicative of prevailing market sentiment and/or institutional money flows into or out of individual securities and sectors. These factors are often indicative of large-scale asset allocation shifts, sector rotation opportunities and/or shifting sentiment indicators. Individual stocks that are expected to outperform the benchmark index are targeted for inclusion in the portfolio, while those that are expected to underperform are either liquidated or excluded. The systematic portfolio selection process is further constrained real-time with respect to individual position size and sector exposures in order to ensure a meaningful variety of market exposures. Holding periods typically range from intraday to several weeks in length (depending upon the persistence of trending price behaviors).

The Futures Component holds long and short positions in futures contracts and maintains cash and cash equivalents to be utilized as margin or collateral. The Futures Component is allocated among various asset classes, including exposure to both financial futures (stock indices, fixed income and currencies) and commodity futures (energies, metals, grains, softs and meats) . Investments may be made in domestic and foreign markets, either directly or indirectly by investing through a subsidiary. The Futures Component employs a multi-model approach and seeks to identify price trends through the application of hundreds of individual trading models, which collectively provide exposure to short-, intermediate- and long-term trading opportunities.

The combined portfolio is structured to be broadly diversified across markets, time horizons and trading styles, and the Fund hopes to achieve a substantial degree of non-correlation between the Equity Component and the Futures Component.

Fund Performance

During 2019, the Fund posted a positive return of 24.38% (Class I), significantly outperforming the SG CTA Mutual Fund Index (which generated a positive return of just 3.37%) while lagging the S&P 500 Total Return Index (which posted a positive return of 31.49%). Following on the heels of a rather challenging 2018, the majority of market participants were content to bask in the glow of higher equity prices and a dovish Fed, as persistent hopes for a U.S.-China trade deal, a stronger U.S. dollar and increased volatility across the commodities markets largely shaped investor expectations throughout much of 2019. For the year, the Fund’s actively managed equity portfolio recorded significant gains in the wake of soaring share prices and falling bond yields, while its trend-based managed futures models recorded incremental gains from long-biased exposures to global stock indices, government bonds and the U.S. dollar, as well as from two-sided directional exposures across a variety of commodities markets (including gold, silver, aluminum, natural gas, cotton and coffee).

The Fund’s total annualized returns through 12/31/19 as compared to the S&P 500 Total Return Index and the SG CTA Mutual Fund Index were as follows:

The Fund’s maximum sales charge for Class “A” shares is 5.75%. Investments in mutual funds involve risks. Performance is historic and does not guarantee future results. Investment return and principal value will fluctuate with changing market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance information or the Fund’s prospectus please call the Fund, toll free at 1-800-253-0412. You can also obtain a prospectus atwww.RationalMF.com.

The Fund acquired all of the assets and liabilities of NuWave Equity Enhanced Fund, LP (the “Predecessor Fund”) in a tax-free reorganization on March 1, 2018. In connection with this acquisition, shares of the Predecessor Fund were exchanged for Institutional Shares of the Fund. The Fund’s investment objectives, policies, restrictions and guidelines are, in all material respects, equivalent to the Predecessor Fund’s investment objectives, policies, restrictions and guidelines. The Fund’s sub-adviser was the adviser to the Predecessor Fund. The financial statements for the Predecessor Fund can be found in the Fund’s Statement of Additional Information. The performance information set forth above reflects the historical performance of the Predecessor Fund shares. From its inception date, the Predecessor Fund was not subject to certain investment restrictions, diversification requirements and other restrictions of the Investment Company Act of 1940; if such requirements and restrictions had been applicable, it might have adversely affected performance). In addition, the Predecessor Fund was not subject to sales loads that would have adversely affected performance. Performance of the Predecessor Fund is not an indicator of future results.

Summary

The Rational NuWave Enhanced Market Opportunity Fund achieved positive gains in 2019 that were generally consistent with its investment objective, significantly outperforming the SG CTA Mutual Fund Index though lagging the S&P 500 Total Return Index. For the year, the Fund generated significant gains from its long-only equity trading, while also adding incremental gains from its long and short exposures to both financial futures and commodity futures.

Sincerely,

This report is intended for the Fund’s shareholders. It may not be distributed to prospective investors unless it is preceded or accompanied by the current Fund prospectus. To obtain a prospectus or other information about the Fund, please visit www.RationalMF.com or call 1-800-253-0412. Please read the prospectus carefully before investing.

4217-NLD-2/14/2020

December 31, 2019

Rational Special Situations Income Fund

Dear Fellow Shareholders,

The Rational Special Situations Income Fund (the “Fund”) seeks total return consisting of capital appreciation and income. The Fund had a strong December, returning +1.70%, outperforming both the Bloomberg Barclays U.S. Aggregate Bond Index (+0.18%) and the Bloomberg Barclays U.S. MBS Index (+0.71%). RFXIX ended 2019 up +8.13%, outperforming the Bloomberg MBS Index (+6.35%) and in line with the Agg (+8.72%). Since inception through 2019, RFXIX has returned 404.70%, significantly outpacing the Agg. (+54.38%) and Bloomberg MBS (+44.18%).

Investment Strategy

The Fund seeks to achieve its investment objective by primarily investing in agency and non-agency residential and commercial mortgage-backed securities, with a focus on non-agency residential mortgage backed securities. Non-agency residential mortgage-backed securities are collateralized by pools of residential mortgages which are not insured by government sponsored enterprises (“GSEs”) or government agencies, including the Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation (FHLMC) and Government National Mortgage Association (GNMA). Many of the mortgages underlying non-agency mortgage-backed securities are non-conforming (not eligible for GSE or agency purchase) for a variety of reasons, including loan size above GSE limits, incomplete documentation of assets or income, excessive borrower debt-to-income ratio (as defined by the GSEs), or unusual loan terms for which GSEs have not established programs. The Fund’s non-agency mortgage -backed securities investments have a wide variety of payment characteristics and preferences and can have fixed or floating interest rates. The Fund may also invest in collateralized debt obligations (“CDOs”), collateralized loan obligations (“CLOs”) and other asset-backed securities, including those backed by credit card receivables, auto loans, aircraft leases and student loans.

Fund Performance

Calendar year 2019 was unusual for fixed income. Both benchmarks put up their best returns in more than 10 years, largely reflecting the impact of falling interest rates. Because the Fund primarily invests in floating rate securities, it had limited interest rate exposure and did not generate its returns from this market-exposure trade. In fact, the Fund’s performance was primarily driven by a baseline yield in our holdings as well as the fruition or progression of several special situations’ trades.

At year end, the Fund was well positioned in a number of special situation trades that we expect will continue to contribute to the Fund performance going forward. The Fund’s cash position was slightly larger than average primarily due to inflows. We continue to deploy cash strategically, seeking opportunities in both special situations and core bond holdings with attractive yields.

The Fund’s total annualized returns through 12/31/19 as compared to the insert appropriate indexes were as follows:

Maximum sales charge for Class A is 4.75%. Maximum Deferred Sales Charge of 1.00% on Class C Shares applies to shares sold within 12 months of purchase. The performance data quoted here represents past performance. Current performance may be lower or higher than the performance data quoted above. Investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Past performance is no guarantee of future results. Results shown reflect the waiver, without which the results could have been lower. A fund’s performance, especially for very short periods of time, should not be the sole factor in making your investment decisions. To obtain the most recent month end performance information or the Fund’s prospectus please call 800-253-0412 or visit www.RationalMF.com.

Summary

Markets have tightened as interest rates have dropped, and fixed income investors are more actively seeking yield. However, we maintain our view that opportunities in the non-agency residential mortgage backed space, as well as other asset backed securities that we cover, continue to be attractive on a relative value basis.

Entering the new year, the Board has approved a change to the Fund distribution policy, and the Fund will target distributions to a 5% annualized distribution rate for the foreseeable future. The distributions will include both current income and return of principal received from paydowns on Fund holdings.

We thank you for your continued support.

Sincerely,

Eric S. Meyer and William Van de Water
Portfolio Managers

Investing in the Fund carries certain risks. The value of the Fund may decrease in response to the activities and financial prospects of an individual security in the Fund’s portfolio. The value of the Fund may decrease in response to the activities and financial prospects of an individual security in the Fund’s portfolio. The Fund is a new mutual fund and has a limited history of operations for investors to evaluate. Investors in the Fund bear the risk that the Fund may not be successful in implementing its investment strategies. The Fund is non-diversified and may invest a greater percentage of its assets in a particular issue and may own fewer securities than other mutual funds; the Fund is subject to concentration risk. When the Fund invests in asset-backed securities and mortgage-backed securities, the Fund is subject to the risk that, if the underlying borrowers fail to pay interest or repay principal, the assets backing these securities may not be sufficient to support payments on the securities. Interest rate risk is the risk that bond prices overall, including the prices of securities held by the Fund, will decline over short or even long periods of time due to rising interest rates. Bonds with longer maturities tend to be more sensitive to interest rates than bonds with shorter

maturities. Lower-quality bonds, known as “high yield” or “junk” bonds, present greater risk than bonds of higher quality, including an increased risk of default. Credit risk is the risk that the issuer of a security will not be able to make principal and interest payments when due. These factors may affect the value of your investment.

The Fund commenced operations by acquiring all of the assets and liabilities of ESM Fund I, L.P. (the “Predecessor Fund”) in a tax- free reorganization on July 17, 2019 (the “Reorganization”). In connection with the Reorganization, investors in the Predecessor Fund received Institutional Shares of the Fund. The Fund’s investment objectives, policies, guidelines and restrictions are, in all material respects, equivalent to those of the Predecessor Fund. However, the Predecessor Fund was not registered under the 1940 Act and, therefore, was not subject to certain investment restrictions, limitations and diversification requirements that are imposed by the 1940 Act or Subchapter M of the Internal Revenue Code, which, if they had been applicable, might have adversely affected the Predecessor Fund’s performance. The Fund’s Sub-Advisor was the investment adviser to the Predecessor Fund. The Fund’s fees and expenses are expected to be higher than those of the Predecessor Fund, so if the Fund’s expenses were applied to the Predecessor Fund’s performance, the performance would have been lower.

Investors should carefully consider the investment objectives, risks, charges and expenses of the Rational Funds. This and other important information about the Fund are contained in the prospectus, which can be obtained by calling (800) 253-0412 or at www.RationalMF.com. The prospectus should be read carefully before investing. The Rational Funds are distributed by Northern Lights Distributors, LLC member FINRA/SIPC. Rational Advisors, Inc. is not affiliated with Northern Lights Distributors, LLC

4219-NLD-2/14/2020

December 31, 2019

Rational/Pier 88 Convertible Securities Fund

Dear Fellow Shareholders,

The Rational/Pier 88 Convertible Securities Fund seeks total return consisting of capital appreciation and income, offering a “call option” on fast growing businesses by investing in convertible securities, which offer equity participation with the added benefit of a bond floor component. The Fund maintains an average investment grade rating with the goal of providing additional downside risk management.

During 2019, the Fund returned +19.59% on a net basis. This compares positively versus the Bloomberg Barclays Global Agg Corporate Total Return Index Value Unhedged (LGCPTRUU), which delivered returns of + 11.51%. The Bloomberg Barclays Global Aggregate - Corporate Index is a flagship measure of global investment grade, fixed-rate corporate debt. The Fund outperformed this index given the Fund’s exposure to more equity sensitive convertibles. We would typically expect to outperform this benchmark in a rising equity market. On the other hand, the Fund lagged the Bloomberg Barclays U.S. Convertibles Liquid Bond Index TR Unhedged USD (LUCCTRUU) which delivered returns of +23.02%. The primary drivers of this performance are credit quality and market cap size; the Fund holds securities which have higher credit quality and larger market cap which lagged in the 2019 rally. We believe the Fund is generally more defensive than this benchmark and has historically offered better performance during risk-off periods. Finally, the ICE BofA US Convertible Index delivered returns of +23.15%. The strong performance of this benchmark is attributable to multiple large (5%) index weights like LRCX which were top performers. For risk purposes, our Fund limits position sizes at 4% of the portfolio, and thus a structural underweight will detract from relative performance when a large index weight rallies. In the long run, we believe our risk limit rule helps reduce idiosyncratic risk.

Investment Strategy

The Fund seeks to achieve its objective by investing in convertible securities, which are “hybrid” securities that possess both fixed income and equity characteristics. The convertible securities asset class is often overlooked because of the unique profile and often trades at a discount to its pari-passu fixed income counterparts. As equity sensitivity has been the primary driver of returns of the asset class, our investment team employs an equity analysis perspective for investment decisions. The investment team establishes a view on the intrinsic value of a business and then examines the overall capital structure of the asset to identify potential mispricing. We structure the portfolio based on our macroeconomic views and seek to take advantage of perceived secular and cyclical themes across all industry sectors. The team built a balanced portfolio of both offensive and defensive sectors and focused on security selection to drive overall performance.

Fund Performance

In reviewing the Fund’s overall investment performance in 2019, the investment team is pleased with the strong absolute risk-adjusted returns. Although the Fund benefitted from a healthy 3%+ yield, the majority of the return came from capital appreciation. 2019 saw strong positive returns for the convertible asset class across multiple industry sectors. Information Technology delivered the strongest positive returns, followed by Financials, Health Care, and Utilities. Industrials, Real Estate, Consumer Discretionary and Energy lagged the other sectors but still delivered positive returns. As one would expect in a positive tape, top individual contributors included Novellus Systems Inc (LRCX), Booking Holdings Inc (BKNG), Becton Dickinson and Co (BDX), CenterPoint Energy Inc (CNP) and American Electric Power Co Inc (AEP). Cash was the largest drag on absolute and relative performance. Smaller detractors included Alteryx Inc (AYX), Intel Corporation (INTC), Insulet Corp (PODD) and Okta Inc (OKTA). The investment team remains constructive on Alteryx Inc (AYX), Insulet Corp (PODD) and Okta Inc (OKTA) from a fundamental perspective. While Intel Corporation (INTC) is a solid company with decent business fundamentals and a strong balance sheet, the investment team currently prefers other semiconductor companies from an investment perspective. As we enter corporate earnings season, the investment team will continue to monitor the business fundamentals of all portfolio companies.

Summary

The Rational/Pier 88 Convertible Securities Fund delivered strong double digit returns in 2019. As stated above, the Fund nicely outperformed a broad fixed income index while lagging two convertible bond indexes. Given our more conservative approach to managing the convertible bond asset class (investment grade portfolio, larger market cap, and capping position sizes at 4%), the investment team is pleased with the solid risk-adjusted returns. The majority of the holdings performed to our expectations and the Fund benefitted from rigorous security selection and solid risk management. We believe investing on behalf of others is a privilege we must earn everyday through adherence to a disciplined investment process. Thank you for your support.

Sincerely,

Frank Timons

Portfolio Manager

The Fund’s total annualized returns through 12/31/19 as compared to its benchmark were as follows:

Maximum sales charge for Class A is 4.75%. Maximum Deferred Sales Charge of 1.00% on Class C Shares applies to shares sold within 12 months of purchase. The performance data quoted here represents past performance. Current performance may be lower or higher than the performance data quoted above. Investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Past performance is no guarantee of future results. Results shown reflect the waiver, without which the results could have been lower. A fund’s performance, especially for very short periods of time, should not be the sole factor in making your investment decisions. To obtain the most recent month end performance information or the Fund’s prospectus please call 800-253-0412 or visitwww.RationalMF.com.

3281-NLD-2/26/2020