BURNEY
U.S. FACTOR
ROTATION
ETF
Ticker
Symbol: BRNY
Listed
on The Nasdaq Stock Market®
(a
series of EA Series Trust)
Prospectus
November
30, 2023
(as
supplemented December 8, 2023)
These
securities have not been approved or disapproved by the Securities and Exchange
Commission nor has the Securities and Exchange Commission passed upon the
accuracy or adequacy of this Prospectus. Any representation to the contrary is a
criminal offense.
BURNEY
U.S. FACTOR
ROTATION
ETF
Fund
Summary
INVESTMENT
OBJECTIVE
Burney
U.S. Factor Rotation ETF (the “Fund”) seeks capital appreciation.
FEES
AND
EXPENSES
This
table describes the fees and expenses that you may pay if you buy, hold, and
sell shares of the Fund (“Shares”). You
may also pay brokerage commissions on the purchase and sale of Shares, which are
not reflected in the table or example.
ANNUAL
FUND
OPERATING
EXPENSES
(EXPENSES
THAT YOU PAY EACH YEAR AS A PERCENTAGE OF THE VALUE OF YOUR
INVESTMENT)1
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Management
Fee |
0.79 |
% |
Distribution
and/or Service (12b-1) Fees |
0.00 |
% |
Other
Expenses |
0.00 |
% |
Total
Annual Fund Operating Expenses |
0.79 |
% |
1The
Fund’s investment advisory agreement provides that the Fund’s investment adviser
will pay substantially all expenses of the Fund, except for the fee payment
under the Fund’s Investment Advisory Agreement, payments under the Fund’s Rule
12b-1 Distribution and Service Plan, brokerage expenses, acquired fund fees and
expenses, taxes, interest (including borrowing costs), litigation expense and
other non-routine or extraordinary expenses. Additionally, the Fund shall be
responsible for its non-operating expenses, and fees and expenses associated
with the Fund’s securities lending program, if applicable.
EXAMPLE
The
following example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other funds. The example assumes that you
invest $10,000 for the time periods indicated and then redeem all of your Shares
at the end of those periods. The example also assumes that the Fund provides a
return of 5% a year and that operating expenses remain the same. You may also
pay brokerage commissions on the purchase and sale of Shares, which are not
reflected in the example. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
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One
Year: |
Three
Years: |
Five
Years: |
Ten
Years: |
$81 |
$252 |
$439 |
$978 |
PORTFOLIO
TURNOVER
The
Fund may pay transaction costs, including commissions when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. For the
fiscal period October 22, 2022 through July 31, 2023, the portfolio turnover
rate for the Fund was 119% of the average value of its portfolio.
The
Burney U.S. Factor Rotation ETF (the “Fund”) is an actively managed
exchange-traded fund (“ETF”) that seeks long term growth of capital. The Fund
seeks to achieve its investment objective by investing, under normal
circumstances, at least 80% of the Fund’s net assets plus the amount of any
borrowings for investment purposes in U.S. listed common stock. The Fund will
invest its assets in common stocks of large, mid, and small-capitalization
companies. Security selection is determined based on a proprietary model
developed by The Burney Company, the sub-adviser to the Fund (the
“Sub-Adviser”).
The
Sub-Adviser has observed that, over the long run, small and value stocks have
shown a performance edge over large and growth companies. However, it has also
observed that there are periods of time when large-cap stocks outperform
small-cap stocks and when growth stocks outperform value stocks. As a result,
the Fund will utilize a “factor rotation” style of investing that varies across
large, small, value, and growth investment cycles (“Investment Cycles”).
Specifically, Investment Cycles are defined as periods where the difference in
return between small and large-cap stocks favor either small-cap stocks or large
cap stocks and where the difference in return between growth and value stocks
favor either growth or value stocks. Historically, the cyclical pattern of
these
market phases can be seen over a 36-month rolling period with regards to market
cap size and a 12-month rolling period with regards to style (i.e., growth vs.
value). As described further below, the Sub-Adviser analyzes market data related
to these cycles to determine the allocation of the portfolio in large and small
cap stocks and growth and value stocks.
The
Sub-Adviser first sets Investment Cycle targets for the strategy based on the
Investment Cycle it expects to outperform. Security selection is informed by the
Sub-Adviser’s proprietary quantitative stock selection model that rates stocks
on key valuation, growth, profitability, quality, and technical factors in
addition to an alternative data set, which utilizes artificial intelligence to
predict revenue beats by measuring a company’s digital footprint based on
engagement on websites, social media, search results, and applications,
comparing engagement to analyst expectations (“Alternative Data”). The universe
of potential portfolio holdings includes U.S. listed common stock of small, mid,
and large-capitalization companies. Stocks are classified as large, mid, or
small-cap stocks and growth or value based on S&P’s classifications. In
cases where S&P does not classify the market cap size and style of a stock,
the Sub-Adviser classifies the stock as large, mid, or small-cap and growth or
value in accordance with S&P’s methodology. This methodology uses market cap
to determine the size of a company (small, medium or large) and growth factors,
such as earnings per share growth and sales per share growth along with value
factors like book value to price ratio, earnings to price ratio, and sales to
price ratio to label companies as growth or value. The Sub-Adviser’s proprietary
model then rates all stocks in its universe numerically. The Sub-Adviser uses a
portfolio optimizer to select stocks for the strategy that are highly rated and
fit the set size and style targets, in accordance with the steps set forth
below.
The
Sub-Adviser utilizes a five-step approach to select U.S. listed equity
securities for the Fund.
Step
1: To determine the current Investment Cycle and its weight, the Sub-Adviser
assesses market indices and trends to determine which factors are currently
favored by the market. The Sub-Adviser observes rolling 36-month return
differentials between small- and large-cap stocks to determine the current size
cycle of the stock market and 12-month rolling return differentials between
growth and value stocks to determine the current style cycle. The Sub-Adviser
considers the length of time the current size and style market phase has lasted,
whether it has peaked in magnitude, the direction of the trend in the rolling
return differential data, and valuation dispersions to predict which size and
style cycle is most likely to be in favor in the future. For example, a downturn
in growth stocks and large cap securities could indicate a favorable environment
for small cap securities and value stocks. This analysis creates a target weight
of large vs. small capitalization and growth vs. value securities for the
overall portfolio. The Fund will always have an allocation to each of the target
Investment Cycles: Large, Small, Growth, and Value. While mid-cap securities are
not its own Investment Cycle, mid-cap securities can be included within the
Small Investment Cycle.
Step
2: The universe of potential securities is then evaluated by the Sub-Adviser
utilizing a proprietary screen to exclude American Depositary Receipts, microcap
companies (in this case, companies whose market capitalization is generally less
than $1 billion), and stocks that have, in the judgment of the Sub-Adviser, poor
liquidity as measured against average daily volume.
Step
3: The Sub-Adviser then deploys proprietary analysis whereby the remaining
universe of securities are individually evaluated across several criteria
(profitability, revenue, trend analysis, etc.). Each security is scored and
ranked based on its weighted average score across various metrics, which include
traditional accounting and price data metrics, as well as other Alternative
Data. Alternative Data seeks to predict revenue beats using proprietary analysis
of a company’s current traffic across its digital footprint relative to its
historic norms and analyst expectations as an indicator of an upcoming revenue
beat. The Sub-Adviser’s model gives the highest scores to those stocks with the
highest weighted average rating across the various factors and Alternative
Data.
Step
4: All eligible securities are then labeled in accordance with the Investment
Cycle that is most relevant to each security. Stocks are classified as large,
mid, or small-cap stocks and growth or value based on S&P’s classifications.
In cases where S&P does not classify the size and style of a stock, the
Sub-Advisor classifies the stock as large, mid, or small-cap and growth or value
in accordance with the S&P methodology that uses market cap to determine the
size of a company (small, medium or large) and growth factors, such as earnings
per share growth and sales per share growth along with value factors like book
value to price ratio, earnings to price ratio, and sales to price ratio to label
companies as growth or value.
Step
5: Securities are then included in the portfolio using a portfolio optimizer to
select stocks that are highly rated by the Sub-Adviser’s proprietary model and
fit the set Investment Cycle targets. Thereafter, the Sub-Adviser qualitatively
assesses the portfolio and may override certain securities recommended by the
portfolio optimizer to the extent that a company has certain negative
characteristics (e.g., litigation or other
disadvantageous
market factors) where benefits to the portfolio can be realized by selecting
different investments within any of the Investment Cycle categories. In
addition, the Sub-Adviser may opt to purchase a low-cost market beta ETF (e.g.,
small cap value ETF) for a portion of the portfolio. Nevertheless, portfolio
overrides and ETF purchases are relatively infrequent. If ETFs are selected,
they are expected to comprise 5% or less of the overall portfolio at any given
time.
Historically,
the Sub-Adviser has observed that a typical market cap size cycle lasts three to
six years and a typical style cycle lasts 18 to 30 months. The rolling size and
style cycle data is updated monthly and the decision to set size and style
targets is reevaluated with the same frequency. The usual signal for identifying
a cycle shift is identification that the rolling return differential has peaked,
and the trend is moving back to the origin. This cycling momentum is analyzed
against valuation dispersions to determine when a cycle shift is necessary. Size
and style cycles can shift dramatically in a short period of time and there is a
risk that the Sub-Adviser could react late to a change in Investment Cycles. It
is also possible that an expected Investment Cycle change could fail to
materialize as anticipated or otherwise does not occur.
The
Fund is rebalanced monthly, and the Sub-Adviser limits portfolio turnover to no
more than 37.5% per rebalance. The Fund may also invest in cash and cash
equivalents and shares of money market funds. Under normal circumstances, the
Fund will hold between 80 and 100 securities.
PRINCIPAL
RISKS
An
investment in the Fund involves risk, including those described below.
There
is no assurance that the Fund will achieve its investment objective.
An investor may lose money by investing in the Fund. An investment in the Fund
is not a bank deposit and is not insured or guaranteed by the FDIC or any
government agency. More complete risk descriptions are set forth below under the
heading “Additional Information About the Fund’s Principal
Risks”.
Equity
Investing Risk. The
Fund invests in equity securities, which involves risks such as such as market
fluctuations, changes in interest rates and perceived trends in stock prices.
The values of equity securities could decline generally or could underperform
other investments. In addition, securities may decline in value due to factors
affecting a specific issuer, market or securities markets
generally.
Growth
Stock Investment Risk. Growth-oriented
common stocks may involve larger price swings and greater potential for loss
than other types of investments. Growth stocks tend to trade at a premium when
analyzed using tradition valuation metrics such as price-to-earnings ratio and
price-to-book ratio. Due to this premium valuation, growth stocks tend to be
more susceptible to big price swings. In bull markets, they tend to rise at a
much faster pace than the overall market, and they tend to decline at a more
rapid rate in bear markets.
Value
Stock Investment Risk. A
value stock may not increase in price if other investors fail to recognize the
company’s value or the markets favor faster-growing companies. Investing in or
having exposure to “value” stocks presents the risk that the stocks may never
reach what the Sub-Adviser believes are their full market values, either because
the market fails to recognize what the Sub-Adviser considers to be the
companies’ true business values, including its assessment of their intangible
value, or because the Sub-Adviser misjudged the company’s value. For any
particular stock, there can be no assurances that the market will reflect the
fair value of the stock, and it may remain undervalued.
Small-
and Mid-Capitalization Companies Risk. Investing
in securities of small- and medium- capitalization companies involves greater
risk than customarily is associated with investing in larger, more established
companies. These companies’ securities may be more volatile and less liquid than
those of more established companies. Often small- and medium-capitalization
companies and the industries in which they focus are still evolving and, as a
result, they may be more sensitive to changing market conditions.
Large-Capitalization
Companies Risk. Large-capitalization
companies may trail the returns of the overall stock market.
Large-capitalization stocks tend to go through cycles of doing better – or worse
– than the stock market in general. These periods have, in the past, lasted for
as long as several years. These market cycles can cause the performance of
large-capitalization companies to trail the overall performance of the broader
securities markets.
Quantitative
Security Selection & Model Risk. The
Sub-Adviser uses a quantitative model, and its processes could be adversely
affected if erroneous or outdated data is utilized. In addition, securities
selected using a quantitative model could perform differently from the financial
markets as a whole as a result of the characteristics used in the analysis, the
weight placed on each characteristic and changes in the characteristic’s
historical
trends. There can be no assurance that quantitative security selection will
enable the Fund to achieve its investment objective.
Factor-Based
Investing Risk. There
can be no assurance that the factor-based investment selection process employed
by the Sub-Adviser will enhance the Fund’s performance. Exposure to the
Investment Cycles identified by the Sub-Adviser may detract from the Fund’s
performance in some market environments, which may continue for prolonged
periods. There is also the risk that the Sub-Adviser may incorrectly predict the
market trends that lead to the portfolio’s allocation in the various Investment
Cycles or the predicted Investment Cycles may fail to materialize, which may
cause the Fund to lose money.
Investment
Risk. When
you sell your Shares of the Fund, they could be worth less than what you paid
for them. The Fund could lose money due to short-term market movements and over
longer periods during market downturns. Securities may decline in value due to
factors affecting securities markets generally or particular asset classes or
industries represented in the markets. The value of a security may decline due
to general market conditions, economic trends or events that are not
specifically related to the issuer of the security or to factors that affect a
particular industry or group of industries. During a general downturn in the
securities markets, multiple asset classes may be negatively affected.
Therefore, you may lose money by investing in the Fund.
Sector
Risk.
If the Fund’s portfolio is overweighted in a certain sector, any negative
development affecting that sector will have a greater impact on the Fund than on
a fund that is not overweighted in that sector. To the extent the Fund is
overweighted in the Information Technology Sector, it will be affected by
developments affecting that sector. Companies in that sector may be
significantly affected by intense competition. In addition technology products
may be subject to rapid obsolescence.
Monthly
Rebalance Risk. Because
the Sub-Adviser may recommend changes to the Fund’s portfolio on a monthly
basis, (i) the Fund’s market exposure may be affected by significant market
movements promptly following the most recent reconstitution that are not
predictive of the market’s performance for the subsequent monthly period and
(ii) changes to the Fund’s market exposure may lag a significant change in the
market’s direction (up or down) by as long as one-month if such changes first
take effect promptly following a reconstitution. Such lags between market
performance and changes to the Fund’s exposure may result in significant
underperformance relative to the broader equity or fixed income
market.
ETF
Risks
•Authorized
Participants, Market Makers and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act as
Authorized Participants (“APs”). In addition, there may be a limited number of
market makers and/or liquidity providers in the marketplace. To the extent that
either of the following events occurs, Shares may trade at a material discount
to NAV and possibly face delisting: (i) Aps exit the business or otherwise
become unable to process creation and/or redemption orders and no other Aps step
forward to perform these services, or (ii) market makers and/or liquidity
providers exit the business or significantly reduce their business activities
and no other entities step forward to perform their functions.
•Premium-Discount
Risk.
The Shares may trade above or below their net asset value (“NAV”). The market
prices of Shares will generally fluctuate in accordance with changes in NAV as
well as the relative supply of, and demand for, Shares on The Nasdaq Stock
Market® (the “Exchange”) or other securities exchanges. The trading price of
Shares may deviate significantly from NAV during periods of market volatility or
limited trading activity in Shares. In addition, you may incur the cost of the
“spread,” that is, any difference between the bid price and the ask price of the
Shares.
•Cost
of Trading Risk.
Investors buying or selling Shares in the secondary market will pay brokerage
commissions or other charges imposed by brokers as determined by that broker.
Brokerage commissions are often a fixed amount and may be a significant
proportional cost for investors seeking to buy or sell relatively small amounts
of Shares.
•Trading
Risk.
Although the Shares are listed on the Exchange, there can be no assurance that
an active or liquid trading market for them will develop or be maintained. In
addition, trading in Shares on the Exchange may be halted. In stressed market
conditions, the liquidity of the Fund’s Shares may begin to mirror the liquidity
of its underlying portfolio holdings, which can be significantly less liquid
than the Fund’s Shares, potentially causing the market price of the Fund’s
Shares to deviate from its NAV. The spread varies over time for Shares of the
Fund based on the Fund’s trading volume and market liquidity, and is generally
lower if the Fund has high trading volume and market liquidity, and higher if
the
Fund has little trading volume and market liquidity (which is often the case for
funds that are newly launched or small in size).
Limited
Operating History Risk.
The Fund is a recently organized management investment company with a limited
operating history. As a result, prospective investors have a limited track
record or history on which to base their investment decision. There can be no
assurance that the Fund will grow to or maintain an economically viable
size.
Management
Risk. The
Fund is actively managed and may not meet its investment objective based on the
Adviser’s or Sub-Adviser’s success or failure to implement investment strategies
for the Fund. The Adviser’s and Sub-Adviser’s evaluations and assumptions
regarding investments may not successfully achieve the Fund’s investment
objective given actual market trends. Absent unusual circumstances (e.g., the
Adviser determines a different security has higher liquidity but offers a
similar investment profile as a recommended security), the Adviser will
generally follow Sub-Adviser’s investment recommendations to buy, hold, and sell
securities and financial instruments.
Cash
and Cash Equivalents Risk.
Holding cash or cash equivalents rather than securities or other instruments in
which the Fund primarily invests, even strategically, may cause the Fund to risk
losing opportunities to participate in market appreciation, and may cause the
Fund to experience potentially lower returns than the Fund’s benchmark or other
funds that remain fully invested. In rising markets, holding cash or cash
equivalents will negatively affect the Fund’s performance relative to its
benchmark.
Geopolitical/Natural
Disaster Risks. The
Fund’s investments are subject to geopolitical and natural disaster risks, such
as war, terrorism, trade disputes, political or economic dysfunction within some
nations, public health crises and related geopolitical events, as well as
environmental disasters, epidemics and/or pandemics, which may add to
instability in world economies and volatility in markets. The impact may be
short-term or may last for extended periods.
PERFORMANCE
Performance
information is not provided below because the Fund has not yet been in operation
for one full calendar year. When provided, the information will provide some
indication of the risks of investing in the Fund by showing how the Fund’s
average annual returns compare with a broad measure of market performance. Past
performance does not necessarily indicate how the Fund will perform in the
future. Performance information is available on the Fund’s website at
www.burneyetfs.com
or by calling the Fund at (215)
882-9983.
INVESTMENT
ADVISER
& INVESTMENT
SUB-ADVISER
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Investment
Adviser: |
Empowered
Funds, LLC dba EA Advisers (“Adviser”) |
Investment
Sub-Adviser: |
The
Burney Company (“Sub-Adviser”) |
PORTFOLIO
MANAGERS
Andrew
Pratt, Partner and Director of Investment Strategy, Joel Sues, Portfolio Manager
and Evgeny Gushcha, Partner and Portfolio Manager of the Sub-Adviser, have each
been primarily and jointly responsible for the day-to-day management of the Fund
since October 2022.
Messrs.
Pratt, Sues and Gushcha provide their recommendations to Messrs. Wm. Joshua
Russell and Richard Shaner, Portfolio Managers of the Adviser are primarily and
jointly responsible for the day-to-day management of the Fund. Mr. Shaner has
served as Portfolio Manager of the Fund since October 2022 and Mr. Russell has
served as Portfolio Manager of the Fund since January 2023.
PURCHASE
AND
SALE
OF
FUND
SHARES
The
Fund issues and redeems Shares on a continuous basis only in large blocks of
Shares, typically 10,000 Shares, called “Creation Units,” and only APs
(typically, broker-dealers) may purchase or redeem Creation Units. Creation
Units generally are issued and redeemed ‘in-kind’ for securities and partially
in cash. Individual Shares may only be purchased and sold in secondary market
transactions through brokers. Once created,
individual
Shares generally trade in the secondary market at market prices that change
throughout the day. Market prices of Shares may be greater or less than their
NAV. Except
when aggregated in Creation Units, the Fund’s shares are not redeemable
securities.
TAX
INFORMATION
The
Fund’s distributions generally are taxable to you as ordinary income, capital
gain, or some combination of both, unless your investment is in an Individual
Retirement Account (“IRA”) or other tax-advantaged account. However, subsequent
withdrawals from such a tax-advantaged account may be subject to federal income
tax. You should consult your tax advisor about your specific tax
situation.
PURCHASES
THROUGH
BROKER-DEALERS
AND
OTHER
FINANCIAL
INTERMEDIARIES
If
you purchase Shares through a broker-dealer or other financial intermediary, the
Fund and its related companies may pay the intermediary for the sale of Shares
and related services. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your salesperson to
recommend Shares over another investment. Ask your salesperson or visit your
financial intermediary’s website for more information.
ADDITIONAL
INFORMATION
ABOUT
THE
FUND
How
is the Fund Different from a Mutual Fund?
Redeemability.
Mutual
fund shares may be bought from, and redeemed with, the issuing fund for cash at
NAV typically calculated once at the end of the business day. Shares of the
Fund, by contrast, cannot be purchased from or redeemed with the Fund except by
or through APs (typically, broker-dealers), and then principally for an in-kind
basket of securities (and a limited cash amount). In addition, the Fund issues
and redeems Shares on a continuous basis only in large blocks of Shares,
typically 10,000 Shares, called “Creation Units.”
Exchange
Listing. Unlike
mutual fund shares, Shares of the Fund will be listed for trading on the
Exchange. Investors can purchase and sell Shares on the secondary market through
a broker. Investors purchasing Shares in the secondary market through a
brokerage account or with the assistance of a broker may be subject to brokerage
commissions and charges. Secondary-market transactions do not occur at NAV, but
at market prices that change throughout the day, based on the supply of, and
demand for, Shares and on changes in the prices of the Fund’s portfolio
holdings. The market price of Shares may differ from the NAV of the Fund. The
difference between market price of Shares and the NAV of the Fund is called a
premium when the market price is above the reported NAV and called a discount
when the market price is below the reported NAV, and the difference is expected
to be small most of the time, though it may be significant, especially in times
of extreme market volatility.
Tax
Treatment. The
Fund and the Shares have been designed to be tax-efficient. Specifically, the
in-kind creation and redemption feature has been designed to protect Fund
shareholders from adverse tax consequences applicable to non-ETF registered
investment companies as a result of cash transactions in the non-ETF registered
investment company’s shares, including cash redemptions. Nevertheless, to the
extent redemptions from the Fund are paid in cash, the Fund may realize capital
gains or losses, including in some cases short-term capital gains, upon the sale
of portfolio securities to generate the cash to satisfy the
redemption.
Transparency.
The
Fund’s portfolio holdings are disclosed on its website daily after the close of
trading on the Exchange and prior to the opening of trading on the Exchange the
following day. A description of the Fund’s policies and procedures with respect
to the disclosure of the Fund’s portfolio holdings is available in the Fund’s
Statement of Additional Information (“SAI”).
Premium/Discount
Information. Information
about the premiums and discounts at which the Fund’s Shares have traded will be
available at www.burneyetfs.com.
ADDITIONAL
INFORMATION
ABOUT
THE
FUND’S
PRINCIPAL
INVESTMENT
OBJECTIVE
AND
STRATEGIES
The
Fund’s investment objective is to seek capital appreciation.
Under
normal circumstances, the Fund will invest at least 80% of its net assets, plus
borrowings for investment purposes, in U.S. listed common stock. The Fund’s 80%
policy is non-fundamental and can be changed without shareholder approval.
However, Fund shareholders would be given at least 60 days’ notice prior to any
such change.
The
Fund will invest its assets in common stocks of large, mid, and
small-capitalization companies. Security selection is determined based on a
proprietary model developed by The Burney Company, the sub-adviser to the Fund
(the “Sub-Adviser”).
The
Sub-Adviser has observed that, over the long run, small and value stocks have
shown a performance edge over large and growth companies. However, it has also
observed that there are periods of time when large-cap stocks outperform
small-cap stocks and when growth stocks outperform value stocks. As a result,
the Fund will utilize a “factor rotation” style of investing that varies across
large, small, value, and growth investment cycles (“Investment Cycles”).
Specifically, Investment Cycles are defined as periods where the difference in
return between small and large-cap stocks favor either small-cap stocks or large
cap stocks and where the difference in return between growth and value stocks
favor either growth or value stocks. Historically, the cyclical pattern of these
market phases can be seen over a 36-month rolling period with regards to market
cap size and a 12-month rolling period with regards to style (i.e., growth vs.
value). As described further below, the Sub-Adviser analyzes market data related
to these cycles to determine the allocation of the portfolio in large and small
cap stocks and growth and value stocks.
The
Sub-Adviser first sets Investment Cycle targets for the strategy based on the
Investment Cycle it expects to outperform. Security selection is informed by the
Sub-Adviser’s proprietary quantitative stock selection model that rates stocks
on key valuation, growth, profitability, quality, and technical factors in
addition to an
alternative
data set, which utilizes artificial intelligence to predict revenue beats by
measuring a company’s digital footprint based on engagement on websites, social
media, search results, and applications, comparing engagement to analyst
expectations (“Alternative Data”). The universe of potential portfolio holdings
includes U.S. listed common stock of small, mid, and large-capitalization
companies. Stocks are classified as large, mid, or small-cap stocks and growth
or value based on S&P’s classifications. In cases where S&P does not
classify the market cap size and style of a stock, the Sub-Adviser classifies
the stock as large, mid, or small-cap and growth or value in accordance with
S&P’s methodology. This methodology uses market cap to determine the size of
a company (small, medium or large) and growth factors, such as earnings per
share growth and sales per share growth along with value factors like book value
to price ratio, earnings to price ratio, and sales to price ratio to label
companies as growth or value. The Sub-Adviser’s proprietary model then rates all
stocks in its universe numerically. The Sub-Adviser uses a portfolio optimizer
to select stocks for the strategy that are highly rated and fit the set size and
style targets, in accordance with the steps set forth below.
The
Sub-Adviser utilizes a five-step approach to select U.S. listed equity
securities for the Fund.
Step
1: To determine the current Investment Cycle and its weight, the Sub-Adviser
assesses market indices and trends to determine which factors are currently
favored by the market. The Sub-Adviser observes rolling 36-month return
differentials between small- and large-cap stocks to determine the current size
cycle of the stock market and 12-month rolling return differentials between
growth and value stocks to determine the current style cycle. The Sub-Adviser
considers the length of time the current size and style market phase has lasted,
whether it has peaked in magnitude, the direction of the trend in the rolling
return differential data, and valuation dispersions to predict which size and
style cycle is most likely to be in favor in the future. For example, a downturn
in growth stocks and large cap securities could indicate a favorable environment
for small cap securities and value stocks. This analysis creates a target weight
of large vs. small capitalization and growth vs. value securities for the
overall portfolio. The Fund will always have an allocation to each of the target
Investment Cycles: Large, Small, Growth, and Value. While mid-cap securities are
not its own Investment Cycle, mid-cap securities can be included within the
Small Investment Cycle.
Step
2: The universe of potential securities is then evaluated by the Sub-Adviser
utilizing a proprietary screen to exclude American Depositary Receipts, microcap
companies (in this case, companies whose market capitalization is generally less
than $1 billion), and stocks that have, in the judgment of the Sub-Adviser, poor
liquidity as measured against average daily volume.
Step
3: The Sub-Adviser then deploys proprietary analysis whereby the remaining
universe of securities are individually evaluated across several criteria
(profitability, revenue, trend analysis, etc.). Each security is scored and
ranked based on its weighted average score across various metrics, which include
traditional accounting and price data metrics, as well as other Alternative
Data. Alternative Data seeks to predict revenue beats using proprietary analysis
of a company’s current traffic across its digital footprint relative to its
historic norms and analyst expectations as an indicator of an upcoming revenue
beat. The Sub-Adviser’s model gives the highest scores to those stocks with the
highest weighted average rating across the various factors and Alternative
Data.
Step
4: All eligible securities are then labeled in accordance with the Investment
Cycle that is most relevant to each security. Stocks are classified as large,
mid, or small-cap stocks and growth or value based on S&P’s classifications.
In cases where S&P does not classify the size and style of a stock, the
Sub-Advisor classifies the stock as large, mid, or small-cap and growth or value
in accordance with the S&P methodology that uses market cap to determine the
size of a company (small, medium or large) and growth factors, such as earnings
per share growth and sales per share growth along with value factors like book
value to price ratio, earnings to price ratio, and sales to price ratio to label
companies as growth or value.
Step
5: Securities are then included in the portfolio using a portfolio optimizer to
select stocks that are highly rated by the Sub-Adviser’s proprietary model and
fit the set Investment Cycle targets. Thereafter, the Sub-Adviser qualitatively
assesses the portfolio and may override certain securities recommended by the
portfolio optimizer to the extent that a company has certain negative
characteristics (e.g., litigation or other disadvantageous market factors) where
benefits to the portfolio can be realized by selecting different investments
within any of the Investment Cycle categories. In addition, the Sub-Adviser may
opt to purchase a low-cost market beta ETF (e.g., small cap value ETF) for a
portion of the portfolio. Nevertheless, portfolio overrides and ETF purchases
are relatively infrequent. If ETFs are selected, they are expected to comprise
5% or less of the overall portfolio at any given time.
Historically,
the Sub-Adviser has observed that a typical market cap size cycle lasts three to
six years and a typical style cycle lasts 18 to 30 months. The rolling size and
style cycle data is updated monthly and the
decision
to set size and style targets is reevaluated with the same frequency. The usual
signal for identifying a cycle shift is identification that the rolling return
differential has peaked, and the trend is moving back to the origin. This
cycling momentum is analyzed against valuation dispersions to determine when a
cycle shift is necessary. Size and style cycles can shift dramatically in a
short period of time and there is a risk that the Sub-Adviser could react late
to a change in Investment Cycles. It is also possible that an expected
Investment Cycle change could fail to materialize as anticipated or otherwise
does not occur.
The
Fund is rebalanced monthly, and the Sub-Adviser limits portfolio turnover to no
more than 37.5% per rebalance. The Fund may also invest in cash and cash
equivalents and shares of money market funds. Under normal circumstances, the
Fund will hold between 80 and 100 securities.
ADDITIONAL
INFORMATION
ABOUT
THE
FUND’S
PRINCIPAL
RISKS
The
following information is in addition to, and should be read along with, the
description of the Fund’s principal investment risks in the sections titled
“Fund Summary—Principal Risks” above.
Equity
Investing Risk. An
investment in the Fund involves risks similar to those of investing in any fund
holding equity securities, such as market fluctuations, changes in interest
rates and perceived trends in stock prices. The values of equity securities
could decline generally or could underperform other investments. Different types
of equity securities tend to go through cycles of outperformance and
underperformance in comparison to the general securities markets. In addition,
securities may decline in value due to factors affecting a specific issuer,
market or securities markets generally. Recent turbulence in financial markets
and reduced liquidity in credit and fixed income markets may negatively affect
many issuers worldwide, which may have an adverse effect on the
Fund.
Growth
Stock Investment Risk. Growth-oriented
common stocks may involve larger price swings and greater potential for loss
than other types of investments. Growth stocks tend to trade at a premium when
analyzed using tradition valuation metrics such as price-to-earnings ratio and
price-to-book ratio. Due to this premium valuation, growth stocks tend to be
more susceptible to big price swings. In bull markets, they tend to rise at a
much faster pace than the overall market, and they tend to decline at a more
rapid rate in bear markets.
Value
Stock Investment Risk. A
value stock may not increase in price if other investors fail to recognize the
company’s value or the markets favor faster-growing companies. Investing in or
having exposure to “value” stocks presents the risk that the stocks may never
reach what the Sub-Adviser believes are their full market values, either because
the market fails to recognize what the Sub-Adviser considers to be the
companies’ true business values, including its assessment of their intangible
value, or because the Sub-Adviser misjudged the company’s value. For any
particular stock, there can be no assurances that the market will reflect the
fair value of the stock, and it may remain undervalued.
Small-
and Mid-Capitalization Companies Risk. Investing
in securities of small- and mid-capitalization companies involves greater risk
than customarily is associated with investing in larger, more established
companies. These companies’ securities may be more volatile and less liquid than
those of more established companies. As a result, a company’s share price may be
affected by poorly executed trades, even if the underlying business of the
company is unchanged. These securities may have returns that vary, sometimes
significantly, from the overall securities market. Small- and mid-capitalization
companies are sometimes more dependent on key personnel or limited product lines
than larger, more diversified companies. Often small- and mid-capitalization
companies and the industries in which they focus are still evolving and, as a
result, they may be more sensitive to changing market conditions.
Large-Capitalization
Companies Risk. Large-capitalization
companies may trail the returns of the overall stock market.
Large-capitalization stocks tend to go through cycles of doing better – or worse
– than the stock market in general. These periods have, in the past, lasted for
as long as several years. These market cycles can cause the performance of
large-capitalization companies to trail the overall performance of the broader
securities markets.
Quantitative
Security Selection & Model Risk. The
Sub-Adviser uses a quantitative model, and its processes could be adversely
affected if erroneous or outdated data is utilized. In addition, securities
selected using a quantitative model could perform differently from the financial
markets as a whole as a result of the characteristics used in the analysis, the
weight placed on each characteristic and changes in the characteristic’s
historical trends. The factors used in such analyses may not be predictive of a
particular security’s value and its effectiveness can change over time. These
changes may not be reflected, or may not be reflected timely, in the relevant
quantitative model. There may also be technical issues with the construction and
implementation of
quantitative
models (for example, software or other technology malfunctions, or programming
inaccuracies). There can be no assurance that quantitative security selection
will enable the Fund to achieve its investment objective.
Factor-Based
Investing Risk. There
can be no assurance that the factor-based investment selection process employed
by the Sub-Adviser will enhance the Fund’s performance. Exposure to the
Investment Cycles identified by the Sub-Adviser may detract from the Fund’s
performance in some market environments, which may continue for prolonged
periods. There is also the risk that the Sub-Adviser may incorrectly predict the
market trends that lead to the portfolio’s allocation in the various Investment
Cycles or the predicted Investment Cycles may fail to materialize, which may
cause the Fund to lose money.
Sector
Risk.
If the Fund’s portfolio is overweighted in a certain sector, any negative
development affecting that sector will have a greater impact on the Fund than on
a fund that is not overweighted in that sector. To the extent the Fund is
overweighted in the Information Technology Sector, it will be affected by
developments affecting that sector. Companies in that sector may be
significantly affected by intense competition. In addition technology products
may be subject to rapid obsolescence.
Investment
Risk. When
you sell your Shares of the Fund, they could be worth less than what you paid
for them. The Fund could lose money due to short-term market movements and over
longer periods during market downturns. Securities may decline in value due to
factors affecting securities markets generally or particular asset classes or
industries represented in the markets. The value of a security may decline due
to general market conditions, economic trends or events that are not
specifically related to the issuer of the security or to factors that affect a
particular industry or group of industries. During a general downturn in the
securities markets, multiple asset classes may be negatively affected.
Therefore, you may lose money by investing in the Fund.
Monthly
Rebalance Risk. Because
the Sub-Adviser may recommend changes to the Fund’s portfolio on a monthly
basis, (i) the Fund’s market exposure may be affected by significant market
movements promptly following the most recent reconstitution that are not
predictive of the market’s performance for the subsequent monthly period and
(ii) changes to the Fund’s market exposure may lag a significant change in the
market’s direction (up or down) by as long as one-month if such changes first
take effect promptly following a reconstitution. Such lags between market
performance and changes to the Fund’s exposure may result in significant
underperformance relative to the broader equity or fixed income
market.
ETF
Risks
•APs,
Market Makers, and Liquidity Providers Concentration Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, Shares may trade at a material discount to NAV and possibly face
delisting: (i) APs exit the business or otherwise become unable to process
creation and/or redemption orders and no other APs step forward to perform these
services, or (ii) market makers and/or liquidity providers exit the business or
significantly reduce their business activities and no other entities step
forward to perform their functions.
•Cost
of Trading Risk. Investors
buying or selling Shares in the secondary market pay brokerage commissions or
other charges imposed by brokers as determined by that broker. Brokerage
commissions are often a fixed amount and may be a significant proportional cost
for investors seeking to buy or sell relatively small amounts of Shares. In
addition, secondary market investors also incur the cost of the difference
between the price that an investor is willing to pay for Shares (the “bid”
price) and the price at which an investor is willing to sell Shares (the “ask”
price). This difference in bid and ask prices is often referred to as the
“spread” or “bid/ask spread.” The bid/ask spread varies over time for Shares
based on trading volume and market liquidity, and is generally lower if the
Fund’s Shares have more trading volume and market liquidity and higher if the
Fund’s Shares have little trading volume and market liquidity. Further,
increased market volatility may cause increased bid/ask spreads.
•Premium-Discount
Risk. The
Shares may trade above or below their NAV. The NAV of the Fund will generally
fluctuate with changes in the market value of the Fund’s holdings. The market
prices of Shares, however, will generally fluctuate in accordance with changes
in NAV as well as the relative supply of, and demand for, Shares on the Exchange
and other securities exchanges. The trading price of Shares may deviate
significantly from NAV during periods of market volatility or limited trading in
Shares. In addition, you may incur the cost of the “spread,” that is, any
difference between the bid price and the ask price of the Shares. The Adviser
cannot predict whether Shares will trade below, at or
above
their NAV. Price differences may be due, in large part, to the fact that supply
and demand forces at work in the secondary trading market for Shares will be
closely related to, but not identical to, the same forces influencing the prices
of the securities held by the Fund. However, given that Shares can be purchased
and redeemed in large blocks of Shares, called Creation Units (unlike shares of
closed-end funds, which frequently trade at appreciable discounts from, and
sometimes at premiums to, their NAV), and the Fund’s portfolio holdings are
fully disclosed on a daily basis, the Adviser believes that large discounts or
premiums to the NAV of Shares should not be sustained, but that may not be the
case.
•Trading
Risk. Although
the Shares are listed on the Exchange, there can be no assurance that an active
or liquid trading market for them will be maintained. In addition, trading in
Shares on the Exchange may be halted due to market conditions or for reasons
that, in the view of the Exchange, make trading in Shares inadvisable. Further,
trading in Shares on the Exchange is subject to trading halts caused by
extraordinary market volatility pursuant to the Exchange “circuit breaker”
rules, which temporarily halt trading on the Exchange when a decline in the
S&P 500 Index during a single day reaches certain thresholds (e.g., 7%, 13%
and 20%). There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged. The spread varies over time for Shares of the Fund based on
the Fund’s trading volume and market liquidity, and is generally lower if the
Fund has high trading volume and market liquidity, and higher if the Fund has
little trading volume and market liquidity (which is often the case for funds
that are newly launched or small in size).
High
Portfolio Turnover Risk. The
Fund’s investment strategy is expected to result in a higher portfolio turnover
rate. This will increase the Fund’s brokerage commission costs, which could
negatively impact the performance of the Fund. Rapid portfolio turnover also
exposes shareholders to a higher current realization of short-term capital
gains, distributions of which would generally be taxed to you as ordinary income
and thus cause you to pay higher taxes.
Limited
Operating History Risk. The
Fund is a recently organized management investment company with a limited
operating history. As a result, prospective investors have a limited track
record or history on which to base their investment decision. There can be no
assurance that the Fund will grow to or maintain an economically viable
size.
Management
Risk.
The Fund is actively-managed and may not meet its investment objective based on
the Adviser’s or Sub-Adviser’s success or failure to implement investment
strategies for the Fund. The Adviser’s and Sub-Adviser’s evaluations and
assumptions regarding investments may not successfully achieve the Fund’s
investment objective given actual market trends. Absent unusual circumstances
(e.g., the Adviser determines a different security has higher liquidity but
offers a similar investment profile as a recommended security), the Adviser will
generally follow Sub-Adviser’s investment recommendations to buy, hold, and sell
securities and financial instruments.
Cash
and Cash Equivalents Risk.
Holding cash or cash equivalents rather than securities or other instruments in
which the Fund primarily invests, even strategically, may cause the Fund to risk
losing opportunities to participate in market appreciation, and may cause the
Fund to experience potentially lower returns than the Fund’s benchmark or other
funds that remain fully invested. In rising markets, holding cash or cash
equivalents will negatively affect the Fund’s performance relative to its
benchmark.
Geopolitical/Natural
Disaster Risks. The
Fund’s investments are subject to geopolitical and natural disaster risks, such
as war, terrorism, trade disputes, political or economic dysfunction within some
nations, public health crises and related geopolitical events, as well as
environmental disasters, epidemics and/or pandemics, which may add to
instability in world economies and volatility in markets. The impact may be
short-term or may last for extended periods.
The
respiratory illness COVID-19 caused by a novel coronavirus has resulted in a
global pandemic and major disruption to economies and markets around the world,
including the United States. Financial markets have experienced extreme
volatility and severe losses, and trading in many instruments has been
disrupted. Liquidity for many instruments has been greatly reduced for periods
of time. Some sectors of the economy and individual issuers have experienced
particularly large losses. For some companies, dividend payments have been
delayed, reduced, or rescinded. These circumstances may continue for an extended
period of time, and may affect adversely the value and liquidity of the Fund’s
investments.
FUND
MANAGEMENT
Investment
Adviser
Empowered
Funds, LLC dba EA Advisers acts as the Fund’s investment adviser. The Adviser is
located at 19 East Eagle Road Havertown, PA 19083 and is wholly-owned by Alpha
Architect LLC. The Adviser is registered with the Securities and Exchange
Commission (“SEC”) under the Investment Advisers Act of 1940 (the “Advisers
Act”) and provides investment advisory services solely to the Fund and other
exchange-traded funds. The Adviser was founded in
October 2013.
The
Adviser is responsible for overseeing the management and business affairs of the
Fund, and has discretion to purchase and sell securities in accordance with the
Fund’s objectives, policies and restrictions. The Adviser continuously reviews,
supervises and administers the Fund’s investment programs pursuant to the terms
of investment advisory agreement (the “Advisory Agreement”) between the Trust
and the Adviser. The Adviser is entitled to receive the following Advisory Fee:
0.79% (annual rate as a percentage of average daily net assets). During the
fiscal period ended July 31, 2023, the aggregate advisory fee paid to the
Adviser was $960,185.
The
Adviser (or an affiliate of the Adviser) bears all of the Adviser’s own costs
associated with providing these advisory services and all expenses of the Fund,
except for the fee payment under the Advisory Agreement, payments under the
Fund’s Rule 12b-1 Distribution and Service Plan (the “Plan”), brokerage
expenses, acquired fund fees and expenses, taxes (including tax-related
services), interest (including borrowing costs), litigation expense (including
class action-related services) and other non-routine or extraordinary
expenses.
The
Advisory Agreement for the Fund provides that it may be terminated at any time,
without the payment of any penalty, by the Board or, with respect to the Fund,
by a majority of the outstanding shares of the Fund, on 60 days’ written notice
to the Adviser, and by the Adviser upon 60 days’ written notice, and that it
shall be automatically terminated if it is assigned.
Investment
Sub-Adviser
Sub-Adviser:
The Adviser has retained The Burney Company, an investment adviser registered
with the SEC under the Advisers Act, to provide sub-advisory services for the
Fund. The Sub-Adviser is organized as an S Corporation under the laws of the
state of Delaware with its principal offices located at 1800 Alexander Bell
Drive, Suite 510, Reston, VA 20191. The Sub-Adviser was established in 1974 and
is an equity research, investment management, and wealth management firm that
seeks to maximize long-term returns using proprietary fundamental/quantitative
techniques and analysis. The Sub-Adviser is responsible for determining the
investments for the Fund, subject to the overall supervision and oversight of
the Adviser and the Board.
The
Sub-Adviser performs its services as a non-discretionary sub-adviser, which
means that the Sub-Adviser is not responsible for selecting brokers or placing
the Fund’s trades. Rather, the Sub-Adviser constructs the overall portfolio and
provides trading instructions to the Adviser and, in turn, the Adviser is
responsible for selecting brokers and placing the Fund’s trades. It is
anticipated that the Adviser will generally adhere to the Sub-Adviser’s
recommendations.
For
its services, the Adviser pays the Sub-Adviser, a fee, which is calculated daily
and paid monthly, at an annual rate based on the Fund’s average daily net assets
as follows: 0.39% (annual rate as a percentage of average daily net
assets).
Fund
Sponsor
The
Adviser has entered into a fund sponsorship agreement with the Sub-Adviser (the
“Fund Sponsor”). Under this arrangement, the Fund Sponsor has agreed to provide
financial support to the Fund (as described below) and, in turn, the Adviser has
agreed to share with the Fund Sponsor a portion of profits, if any, generated by
the Fund’s Advisory Fee (also as described below). Every month, the Advisory
Fee, which is a unitary management fee, is calculated and paid to the
Adviser.
If
the amount of the unitary management fee exceeds the Fund’s operating expenses
and the Adviser-retained amount, the Adviser pays the net total to the Fund
Sponsor. The amount paid to the Fund Sponsor represents both the sub-advisory
fee and any remaining profits from the Advisory Fee. During months where there
are no profits or the funds are not sufficient to cover the entire sub-advisory
fee, the sub-advisory fee is automatically waived.
If
the amount of the unitary management fee is less than the Fund’s operating
expenses and the Adviser-retained amount, Fund Sponsor is obligated to reimburse
the Adviser for the shortfall.
APPROVAL
OF
ADVISORY
AGREEMENT
& INVESTMENT
SUB-ADVISORY
AGREEMENT
A
discussion regarding the basis for the Board’s approval of the Advisory
Agreement and the sub-advisory agreement with respect to the Fund is available
in the Fund’s Semi-Annual Report
to shareholders for the fiscal period ended January 31, 2023.
PORTFOLIO
MANAGERS
The
portfolio managers are jointly and primarily responsible for various functions
related to portfolio management, including, but not limited to, making
recommendations (or implementing) with respect to the following: investing cash
inflows, implementing investment strategy, researching and reviewing investment
strategy, and overseeing members of the portfolio management team with more
limited responsibilities.
Andrew
Pratt, CFA®, CAIA® is a Partner and Director of Investment Strategy at Burney
Partners, LLC, an affiliate of The Burney Company, an SEC-registered investment
adviser. Mr. Pratt is also an investment adviser representative of The Burney
Company. Mr. Pratt has spent his entire career at Burney, joining the team in
2012 upon graduation from college. He held his current title of Director of
Investment Strategy since 2017. Mr. Pratt earned his CFA® charter in 2017 and
CAIA® charter in 2020. He graduated from Virginia Tech with a B.A. in Economics
and B.S. in Psychology. He holds the Series 65 license.
Joel
Sues CFA®, CAIA® is a Portfolio Manager at Burney Partners, LLC, an affiliate of
The Burney Company, an SEC-registered investment adviser. Mr. Sues is also an
investment adviser representative of The Burney Company. He has spent the
majority of his career at Burney, joining the team in 2016. Mr. Sues has held
his current Portfolio Manager title since 2019. He earned his CFA® and CAIA®
charters in 2020. He graduated from Duke University with a B.S in Economics,
George Mason University with an M.A. in Economics, and holds the Series 65
license.
Evgeny
Gushcha, Ph.D. is a Partner and Portfolio Manager at Burney Partners, LLC, an
affiliate of The Burney Company, an SEC-registered investment adviser. Mr.
Gushcha is also an investment adviser representative of The Burney Company. Mr.
Gushcha has spent his entire career at Burney, joining the team in 2000 upon
graduation from the university. He started work as an Analyst and became a
Portfolio Manager in 2009. Mr. Gushcha earned his Ph.D. in Economics in 2004
from Kuban State University, Russia. He graduated from American University in
Washington, D.C. with a B.S. in Business Administration specialization Finance.
He holds the Series 65 license.
Mr.
Wm. Joshua Russell, PhD, CFA has been a Senior Portfolio Manager with the
Advisor since October 2022 and a portfolio manager of the Fund since January
2023. Prior to this he was a Portfolio Manager at Carson Group where he was
responsible for approximately $1.7 billion in assets. He has also served in
quant research roles as VP, Sr. Research Analyst at Franklin Templeton and
Senior Quantitative Strategist at WisdomTree. Prior to entering the industry,
Dr. Russell was a PhD candidate where he conducted research on large-scale
distributed systems for the US Army, the US Air Force, and NASA. He earned a PhD
in Electrical and Computer Engineering, a Masters in Economics, and a Masters in
Electrical and Computer Engineering at the University of California, Santa
Barbara. He earned a Bachelor of Science in Electrical Engineering from the
University of Washington and is a CFA Charterholder.
Mr.
Richard Shaner has been portfolio manager of each Fund since inception. Mr.
Shaner has advised on trading and execution matters for the Adviser since
January 2021, where he supports trading operations and assists in
quantitative research. Prior to Mr. Shaner’s tenure with the Adviser, Mr. Shaner
executed various trading strategies for a private family office. Mr. Shaner has
a B.Sc in Kinesiology and Applied Physiology from the University of Colorado. He
is also a CFA® Charterholder.
Messrs.
Russell and Shaner are responsible for implementing the Fund’s investment
strategies.
The
Fund’s SAI provides additional information about the portfolio managers,
including other accounts each manages, their ownership in the Fund, and
compensation.
OTHER
SERVICE
PROVIDERS
Quasar
Distributors, LLC (“Distributor”) serves as the distributor of Creation Units
(defined above) for the Fund on an agency basis. The Distributor does not
maintain a secondary market in Shares.
U.S.
Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services, is
the administrator, fund accountant, and transfer agent for the
Fund.
U.S.
Bank National Association is the custodian for the Fund.
Practus,
LLP, 11300 Tomahawk Creek Parkway, Suite 310, Leawood, Kansas 66211, serves as
legal counsel to the Trust.
Tait,
Weller & Baker, LLP, 50 South 16th
Street, Suite 2900, Philadelphia, PA 19102,
serves as the Fund’s independent registered public accounting firm. The
independent registered public accounting firm is responsible for auditing the
annual financial statements of the Fund.
THE
EXCHANGE
Shares of the Fund are not sponsored, endorsed or promoted by the
Exchange. The Exchange is not responsible for, nor has it participated, in
the determination of the timing of, prices of, or quantities of Shares of the
Fund to be issued, nor in the determination or calculation of the equation by
which the Shares are redeemable. The Exchange has no obligation or liability to
owners of the Shares of the Fund in connection with the administration,
marketing or trading of the Shares of the Fund. Without limiting any of the
foregoing, in no event shall the Exchange have any liability for any direct,
indirect, special, punitive, consequential or any other damages (including lost
profits) even if notified of the possibility of such damages.
BUYING
AND
SELLING
FUND
SHARES
Shares
will be issued or redeemed by the Fund at NAV per Share only in Creation Units
of 10,000 Shares. Creation Units are generally issued and redeemed only in-kind
for securities although a portion may be in cash.
Shares
will trade on the secondary market, however, which is where most retail
investors will buy and sell Shares. It is expected that only a limited number of
institutional investors, called Authorized Participants or “APs,” will purchase
and redeem Shares directly from the Fund. APs may acquire Shares directly from
the Fund, and APs may tender their Shares for redemption directly to the Fund,
at NAV per Share only in large blocks, or Creation Units. Purchases and
redemptions directly with the Fund must follow the Fund’s procedures, which are
described in the SAI.
Except
when aggregated in Creation Units, Shares are not redeemable with the
Fund.
BUYING
AND
SELLING
SHARES
ON
THE
SECONDARY
MARKET
Most
investors will buy and sell Shares in secondary market transactions through
brokers and, therefore, must have a brokerage account to buy and sell Shares.
Shares can be bought or sold through your broker throughout the trading day like
shares of any publicly traded issuer. The Trust does not impose any redemption
fees or restrictions on redemptions of Shares in the secondary market. When
buying or selling Shares through a broker, you will incur customary brokerage
commissions and charges, and you may pay some or all of the spread between the
bid and the offered prices in the secondary market for Shares. The price at
which you buy or sell Shares (i.e.,
the market price) may be more or less than the NAV of the Shares. Unless imposed
by your broker, there is no minimum dollar amount you must invest in the Fund
and no minimum number of Shares you must buy.
Shares
of the Fund are listed on the Exchange under the following symbol:
|
|
|
|
|
|
|
|
|
Fund |
Trading
Symbol |
Exchange |
Burney
U.S. Factor Rotation ETF |
BRNY |
The
Nasdaq Stock Market® |
The
Exchange is generally open Monday through Friday and is closed for weekends and
the following holidays: New Year’s Day, Martin Luther King, Jr. Day,
Washington’s Birthday, Good Friday, Memorial Day, Juneteenth Independence Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
For
information about buying and selling Shares on the Exchange or in the secondary
markets, please contact your broker or dealer.
Book
Entry. Shares
are held in book entry form, which means that no stock certificates are issued.
The Depository Trust Company (“DTC”), or its nominee, will be the registered
owner of all outstanding Shares of the Fund and is recognized as the owner of
all Shares. Participants in DTC include securities brokers and dealers, banks,
trust companies, clearing corporations and other institutions that directly or
indirectly maintain a custodial relationship with DTC. As a beneficial owner of
Shares, you are not entitled to receive physical delivery of stock certificates
or to have Shares registered in your name, and you are not considered a
registered owner of Shares. Therefore, to exercise any right as an owner of
Shares, you must rely on the procedures of DTC and its participants. These
procedures are the same as those that apply to any stocks that you hold in book
entry or “street name” through your brokerage account. Your account information
will be maintained by your
broker,
which will provide you with account statements, confirmations of your purchases
and sales of Shares, and tax information. Your broker also will be responsible
for distributing income dividends and capital gain distributions and for
ensuring that you receive shareholder reports and other communications from the
Fund.
Share
Trading Prices. The
trading prices of the Fund’s Shares may differ from the Fund’s daily NAV and can
be affected by market forces of supply and demand for the Fund’s Shares, the
prices of the Fund’s portfolio securities, economic conditions and other
factors.
The
Exchange through the facilities of the Consolidated Tape Association or another
market information provider intends to disseminate the approximate value of the
Fund’s portfolio every fifteen seconds during regular U.S. trading hours. This
approximate value should not be viewed as a “real-time” update of the NAV of the
Fund because the approximate value may not be calculated in the same manner as
the NAV, which is computed once a day. The quotations for certain investments
may not be updated during U.S. trading hours if such holdings do not trade in
the U.S., except such quotations may be updated to reflect currency
fluctuations. The Fund is not involved in, or responsible for, the calculation
or dissemination of the approximate values and makes no warranty as to the
accuracy of these values.
Continuous
Offering. The
method by which Creation Units of Shares are created and traded may raise
certain issues under applicable securities laws. Because new Creation Units of
Shares are issued and sold by the Fund on an ongoing basis, a “distribution,” as
such term is used in the Securities Act, may occur at any point. Broker-dealers
and other persons are cautioned that some activities on their part may,
depending on the circumstances, result in their being deemed participants in a
distribution in a manner which could render them statutory underwriters and
subject them to the prospectus delivery requirements and liability provisions of
the Securities Act. For example, a broker-dealer firm or its client may be
deemed a statutory underwriter if it takes Creation Units after placing an order
with the Distributor, breaks them down into constituent Shares and sells the
Shares directly to customers or if it chooses to couple the creation of a supply
of new Shares with an active selling effort involving solicitation of secondary
market demand for Shares. A determination of whether one is an underwriter for
purposes of the Securities Act must take into account all the facts and
circumstances pertaining to the activities of the broker-dealer or its client in
the particular case, and the examples mentioned above should not be considered a
complete description of all the activities that could lead to a characterization
as an underwriter.
Broker-dealer
firms should also note that dealers who are not “underwriters” but are effecting
transactions in Shares, whether or not participating in the distribution of
Shares, are generally required to deliver a prospectus. This is because the
prospectus delivery exemption in Section 4(a)(3) of the Securities Act is
not available in respect of such transactions as a result of Section 24(d)
of the Investment Company Act of 1940, as amended (the “Investment Company
Act”). As a result, broker-dealer firms should note that dealers who are not
“underwriters” but are participating in a distribution (as contrasted with
engaging in ordinary secondary market transactions) and thus dealing with the
Shares that are part of an overallotment within the meaning of
Section 4(a)(3)(C) of the Securities Act, will be unable to take advantage
of the prospectus delivery exemption provided by Section 4(a)(3) of the
Securities Act. For delivery of prospectuses to exchange members, the prospectus
delivery mechanism of Rule 153 under the Securities Act is only available
with respect to transactions on a national exchange.
ACTIVE
INVESTORS
AND
MARKET
TIMING
The
Board has evaluated the risks of market timing activities by the Fund’s
shareholders. The Board noted that the Fund’s Shares can be purchased and
redeemed directly from the Fund only in Creation Units by APs and that the vast
majority of trading in the Fund’s Shares occurs on the secondary market. Because
the secondary market trades do not directly involve the Fund, it is unlikely
those trades would cause the harmful effects of market timing, including
dilution, disruption of portfolio management, increases in the Fund’s trading
costs and the realization of capital gains. With regard to the purchase or
redemption of Creation Units directly with the Fund, to the extent effected
in-kind (i.e.,
for securities), the Board noted that those trades do not cause the harmful
effects (as previously noted) that may result from frequent cash trades. To the
extent trades are effected in whole or in part in cash, the Board noted that
those trades could result in dilution to the Fund and increased transaction
costs, which could negatively impact the Fund’s ability to achieve its
investment objective, although in certain circumstances (e.g., in conjunction
with a reallocation of the Fund’s investments), such trades may benefit Fund
shareholders by increasing the tax efficiency of the Fund. The Board also noted
that direct trading by APs is critical to ensuring that the Fund’s Shares trade
at or close to NAV. In addition, the Fund will impose transaction fees on
purchases and redemptions of Shares to cover the custodial and other costs
incurred by the
Fund
in effecting trades. Given this structure, the Board determined that it is not
necessary to adopt policies and procedures to detect and deter market timing of
the Fund’s Shares.
DISTRIBUTION
AND
SERVICE
PLAN
The
Fund has adopted the Plan pursuant to Rule 12b-1 under the Investment
Company Act. Under the Plan, the Fund may be authorized to pay distribution fees
of up
to 0.25% of its average daily net assets each year to
the Distributor and other firms that provide distribution and shareholder
services (“Service Providers”). As of the date of this Prospectus, the maximum
amount payable under the Plan is set at 0% until further action by the Board. In
the event 12b-1 fees are charged, over time they would increase the cost of an
investment in the Fund because they would be paid on an ongoing
basis.
NET
ASSET
VALUE
The
NAV of Shares is calculated each business day as of the close of regular trading
on the New York Stock Exchange (“NYSE”), generally 4:00 p.m., Eastern
time.
The
Fund calculates its NAV per Share by:
•Taking
the current market value of its total assets,
•Subtracting
any liabilities, and
•Dividing
that amount by the total number of Shares owned by shareholders.
If
you buy or sell Shares on the secondary market, you will pay or receive the
market price, which may be higher or lower than NAV. Your transaction will be
priced at NAV only if you purchase or redeem your Shares in Creation
Units.
Equity
securities that are traded on a national securities exchange, except those
listed on the NASDAQ Global Market®
(“NASDAQ”) are valued at the last reported sale price on the exchange on which
the security is principally traded. Securities traded on NASDAQ will be valued
at the NASDAQ Official Closing Price (“NOCP”). If, on a particular day, an
exchange-traded or NASDAQ security does not trade, then the most recent quoted
bid for exchange traded or the mean between the most recent quoted bid and ask
price for NASDAQ securities will be used. Equity securities that are not traded
on a listed exchange are generally valued at the last sale price in the
over-the-counter market. If a nonexchange traded security does not trade on a
particular day, then the mean between the last quoted closing bid and asked
price will be used.
If
a market price is not readily available or is deemed not to reflect market
value, the Fund will determine the price of the security held by the Fund based
on a determination of the security’s fair value pursuant to policies and
procedures approved by the Board.
To
the extent the Fund holds securities that may trade infrequently, fair valuation
may be used more frequently. Fair valuation may have the effect of reducing
stale pricing arbitrage opportunities presented by the pricing of Shares.
However, when the Fund uses fair valuation to price securities, it may value
those securities higher or lower than another fund would have priced the
security. Also, the use of fair valuation may cause the Shares’ NAV performance
to diverge from the Shares’ market price and from the performance of various
benchmarks used to compare the Fund’s performance because benchmarks generally
do not use fair valuation techniques. Because of the judgment involved in fair
valuation decisions, there can be no assurance that the value ascribed to a
particular security is accurate.
FUND
WEBSITE
AND
DISCLOSURE
OF
PORTFOLIO
HOLDINGS
The
Trust maintains a website for the Fund at www.burneyetfs.com.
Among other things, the website includes this Prospectus and the SAI, the Fund’s
holdings, and the Fund’s last annual
and semi-annual
reports. The website shows the Fund’s daily NAV per share, market price, and
premium or discount, each as of the prior business day. The website also shows
the extent and frequency of the Fund’s premiums and discounts. Further, the
website includes the Fund’s median bid-ask spread over the most recent thirty
calendar days.
Each
day the Fund is open for business, the Trust publicly disseminates the Fund’s
full portfolio holdings as of the close of the previous day through its website
at www.burneyetfs.com.
A description of the Trust’s policies and procedures with respect to the
disclosure of the Fund’s portfolio holdings is available in the Fund’s
SAI.
INVESTMENTS
BY
OTHER
INVESTMENT
COMPANIES
For
purposes of the Investment Company Act, Shares are issued by a registered
investment company and purchases of such Shares by registered investment
companies and companies relying on Section 3(c)(1) or 3(c)(7) of the
Investment Company Act are subject to the restrictions set forth in
Section 12(d)(1) of the Investment Company Act, except as permitted by
Rule 6c-11, Rule 12d1-4, or an exemptive order of the
SEC.
DIVIDENDS,
DISTRIBUTIONS,
AND
TAXES
As
with any investment, you should consider how your investment in Shares will be
taxed. The tax information in this Prospectus is provided as general
information. You should consult your own tax professional about the tax
consequences of an investment in Shares.
Unless
your investment in Shares is made through a tax-exempt entity or tax-deferred
retirement account, such as an IRA plan, you need to be aware of the possible
tax consequences when:
•Your
Fund makes distributions,
•You
sell your Shares listed on the Exchange, and
•You
purchase or redeem Creation Units.
Dividends
and Distributions
Dividends
and Distributions.
The Fund intends to qualify each year as a regulated investment company under
the Internal Revenue Code of 1986, as amended. As a regulated investment
company, the Fund generally pays no federal income tax on the income and gains
it distributes to you. The Fund expects to declare and to distribute all of its
net investment income, if any, to shareholders as dividends on a quarterly
basis. The Fund will distribute net realized capital gains, if any, at least
annually. The Fund may distribute such income dividends and capital gains more
frequently, if necessary, in order to reduce or eliminate federal excise or
income taxes on the Fund. The amount of any distribution will vary, and there is
no guarantee the Fund will pay either an income dividend or a capital gains
distribution. Distributions may be reinvested automatically in additional whole
Shares only if the broker through whom you purchased Shares makes such option
available.
Avoid
“Buying a Dividend.”
At the time you purchase Shares of the Fund, the Fund’s NAV may reflect
undistributed income, undistributed capital gains, or net unrealized
appreciation in value of portfolio securities held by the Fund. For taxable
investors, a subsequent distribution to you of such amounts, although
constituting a return of your investment, would be taxable. Buying Shares in the
Fund just before it declares an income dividend or capital gains distribution is
sometimes known as “buying a dividend.”
Taxes
Tax
Considerations.
The Fund expects, based on its investment objective and strategies, that its
distributions, if any, will be taxable as ordinary income, capital gain, or some
combination of both. This is true whether you reinvest your distributions in
additional Shares or receive them in cash. For federal income tax purposes, Fund
distributions of short-term capital gains are taxable to you as ordinary income.
Fund distributions of long-term capital gains are taxable to you as long-term
capital gain no matter how long you have owned your Shares. A portion of income
dividends reported by each Fund may be qualified dividend income eligible for
taxation by individual shareholders at long-term capital gain rates provided
certain holding period requirements are met.
Taxes
on Sales of Shares.
A sale or exchange of Shares is a taxable event and, accordingly, a capital gain
or loss will generally be recognized. Currently, any capital gain or loss
realized upon a sale of Shares generally is treated as long-term capital gain or
loss if the Shares have been held for more than one year and as short-term
capital gain or loss if the Shares have been held for one year or less. The
ability to deduct capital losses may be limited.
Medicare
Tax.
An additional 3.8% Medicare tax is imposed on certain net investment income
(including ordinary dividends and capital gain distributions received from a
Fund and net gains from redemptions or other taxable dispositions of Shares) of
U.S. individuals, estates, and trusts to the extent that such person’s “modified
adjusted gross income” (in the case of an individual) or “adjusted gross income”
(in the case of an estate or trust) exceeds a threshold amount. This Medicare
tax, if applicable, is reported by you on, and paid with, your federal income
tax return.
Backup
Withholding.
By law, if you do not provide the Funds with your proper taxpayer identification
number and certain required certifications, you may be subject to backup
withholding on any distributions of income,
capital
gains or proceeds from the sale of your Shares. The Funds also must withhold if
the Internal Revenue Service (“IRS”) instructs it to do so. When withholding is
required, the amount will be 24% of any distributions or proceeds
paid.
State
and Local Taxes.
Fund distributions and gains from the sale or exchange of your Shares generally
are subject to state and local taxes.
Taxes
on Purchase and Redemption of Creation Units.
An AP who exchanges equity securities for Creation Units generally will
recognize a gain or a loss. The gain or loss will be equal to the difference
between the market value of the Creation Units at the time of purchase and the
exchanger’s aggregate basis in the securities surrendered and the cash amount
paid. A person who exchanges Creation Units for equity securities generally will
recognize a gain or loss equal to the difference between the exchanger’s basis
in the Creation Units and the aggregate market value of the securities received
and the cash amount received. The IRS, however, may assert that a loss realized
upon an exchange of securities for Creation Units cannot be deducted currently
under the rules governing “wash sales,” or on the basis that there has been no
significant change in economic position. Persons exchanging securities should
consult their own tax advisor with respect to whether the wash sale rules apply
and when a loss might be deductible.
Under
current federal tax laws, any capital gain or loss realized upon redemption of
Creation Units is generally treated as long-term capital gain or loss if the
Shares have been held for more than one year and as a short-term capital gain or
loss if the Shares have been held for one year or less.
If
a Fund redeems Creation Units in cash, it may recognize more capital gains than
it will if it redeems Creation Units in-kind.
Foreign
Tax Credits.
If a Fund qualifies to pass through to you the tax benefits from foreign taxes
it pays on its investments, and elects to do so, then any foreign taxes it pays
on these investments may be passed through to you as a foreign tax
credit.
Non-U.S.
Investors.
Non-U.S. investors may be subject to U.S. withholding tax at a 30% or lower
treaty rate and U.S. estate tax and are subject to special U.S. tax
certification requirements to avoid backup withholding and claim any treaty
benefits. An exemption from U.S. withholding tax is provided for capital gain
dividends paid by a Fund from long-term capital gains, if any. The exemptions
from U.S. withholding for interest-related dividends paid by a Fund from its
qualified net interest income from U.S. sources and short-term capital gain
dividends have expired for taxable years of a Fund that begin on or after
January 1, 2014. It is unclear as of the date of this prospectus whether
Congress will reinstate the exemptions for interest-related and short-term
capital gain dividends or, if reinstated, whether such exemptions would have
retroactive effect. However, notwithstanding such exemptions from U.S.
withholding at the source, any such dividends and distributions of income and
capital gains will be subject to backup withholding at a rate of 24% if you fail
to properly certify that you are not a U.S. person.
Other
Reporting and Withholding Requirements.
Under the Foreign Account Tax Compliance Act (FATCA), each Fund will be required
to withhold a 30% tax on (a) income dividends paid by the Fund, and (b) certain
capital gain distributions and the proceeds arising from the sale of Shares paid
by the Fund, to certain foreign entities, referred to as foreign financial
institutions or non-financial foreign entities, that fail to comply (or be
deemed compliant) with extensive new reporting and withholding requirements
designed to inform the U.S. Department of the Treasury of U.S.-owned foreign
investment accounts. Each Fund may disclose the information that it receives
from its shareholders to the IRS, non-U.S. taxing authorities or other parties
as necessary to comply with FATCA. Withholding also may be required if a foreign
entity that is a shareholder of a Fund fails to provide the Fund with
appropriate certifications or other documentation concerning its status under
FATCA.
Possible
Tax Law Changes.
At the time that this prospectus is being prepared, various administrative and
legislative changes to the federal tax laws are under consideration, but it is
not possible at this time to determine whether any of these changes will be made
or what the changes might entail.
This
discussion of “Dividends, Distributions and Taxes” is not intended or written to
be used as tax advice. Because everyone’s tax situation is unique, you should
consult your tax professional about federal, state, local or foreign tax
consequences before making an investment in the Fund.
The
financial highlights tables are intended to help you understand the Fund’s
financial performance for the period of the Fund’s operations. Certain
information reflects financial results for a single Share. The total returns in
the table represent the rate that an investor would have gained (or lost) on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been derived from the financial statements
audited by Tait, Weller & Baker LLP, an independent registered public
accounting firm, whose report, along with the Fund’s financial statements, is
included in the Fund’s Annual
Report,
which is available upon request.
(for
a share outstanding throughout each period indicated)
BURNEY
U.S. FACTOR ROTATION ETF
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Net Asset Value, Beginning of
Period |
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Net
Investment
Income(1) |
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Net
Realized
and
Unrealized
Gains
on
Investments |
|
Net
Increase
in Net Asset
Value
Resulting
from
Operations |
|
Distributions from
Net Investment Income |
|
Total Distributions |
|
Net Asset
Value, End of Period |
|
Total
Return(2) |
|
Net
Assets, End of Period (000’s) |
|
Net
Expenses(3) |
|
Net
Investment
Income(3) |
|
Portfolio
Turnover
Rate(4)(6) |
Burney
U.S. Factor Rotation ETF |
October 14,
2022(5)
to July 31, 2023 |
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$25.01 |
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0.19 |
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5.02 |
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5.21 |
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(0.20) |
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(0.20) |
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$30.02 |
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20.92% |
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$179,541 |
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0.79% |
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0.85% |
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119% |
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(1)Net
investment income per share represents net investment income divided by the
daily average shares of beneficial interest outstanding throughout the
period.
(2)All
returns reflect reinvested dividends, if any, but do not reflect the impact of
taxes. Total return for a period of less than one year is not
annualized.
(3)For
periods of less than one year, these ratios are annualized.
(4)Portfolio
turnover is not annualized and is calculated without regard to short-term
securities having a maturity of less than one year.
(5)Commencement
of operations.
(6)Excludes
impact of in-kind transactions.
SUB-ADVISER’S
PRIOR
PERFORMANCE
OF
SIMILAR
ACCOUNTS
The
prior performance shown below is for The Burney Company’s Size and Style
Responsiveness Composite (the “Strategy Composite”), which was created by the
Sub-Adviser on January 1, 2000. The Fund’s investment objective, policies
and strategies are substantially similar to the accounts in the Strategy
Composite.
The
Sub-Adviser serves as investment adviser to both the Fund and the accounts
within the Strategy Composite. The Fund and the accounts within the Strategy
Composite also share the same portfolio management team. The Fund is managed
substantially similarly to that of the Strategy Composite and has substantially
similar investment objectives, policies, and strategies. The Strategy Composite
consists of all accounts that the Sub-Adviser manages that are substantially
similar to the Fund.
The
information set forth below illustrates how the performance of the Strategy
Composite has varied over certain time periods since its inception. The table
provides the annual net returns for the specified periods and how they compare
to that of the Russell 3000 Index ETF IWV. The Russell 3000 Index ETF IWV is not
actively managed. The past performance of the Strategy Composite is no guarantee
of future results or trends. The returns of the Strategy Composite are
calculated net of all fees. The Fund’s management fee and other Fund expenses
will similarly reduce your return on an investment in the Fund. Given that the
fees and expense of the Fund are expected to be lower than the fees and expenses
of the accounts within the Strategy Composite, the performance of the Strategy
Composite would be higher if the fees and expenses of the Fund had applied to
the accounts in the Strategy Composite. Performance information set forth below
was calculated using a method that differs from the Securities and Exchange
Commission’s standardized method for calculating mutual fund
returns.
The
performance of the Strategy Composite does not represent the historical
performance of the Fund in this Prospectus and should not be considered
indicative of future performance of the Fund. Results
may differ from the Strategy Composite because of, among other things,
differences in account expenses including management fees, the size of positions
taken in relation to account size, timing of purchase and sales, stability and
frequency of cash inflows and outflows and availability of cash for new
investments. In addition, not all the accounts included in the Strategy
Composite are subject to certain investment limitations, diversification, or
other restrictions (including, without limitation, certain restrictions on
investing in illiquid securities) that are imposed by the 1940 Act and the
Internal Revenue Code of 1986, as amended. If these restrictions had applied to
the accounts in the Strategy Composite, then its performance result could have
been lower.
Strategy
Composite for Accounts Similar to the Fund
(January 1,
2011 through December 31, 2022)
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Time
Period
(ending
12/31/22) |
Total
Return1
(net
of investment management fees) |
Russell
3000 Index ETF IWV
Total
Return Index2 |
1-Year |
-12.10% |
-19.20% |
3-Years |
8.20% |
7.00% |
5-Years |
8.40% |
8.60% |
10-Years |
10.70% |
12.00% |
1Returns
are calculated in U.S. dollars. Additional information regarding the
Sub-Adviser’s policies for calculating and reporting returns is available upon
request.
2Index
returns do not reflect the deduction of fees, expenses or taxes.
ANNUAL/SEMI-ANNUAL
REPORTS
TO
SHAREHOLDERS
Additional
information about the Fund is available in its annual
and semi-annual
reports to shareholders. In the annual report, you will find a discussion of the
market conditions and investment strategies that affected each Fund’s
performance.
STATEMENT
OF
ADDITIONAL
INFORMATION
The
SAI dated November 30, 2023 (as supplemented December 8, 2023), which contains
more details about the Fund, is incorporated by reference in its entirety into
this Prospectus, which means that it is legally part of this
Prospectus.
To
receive a free copy of the latest annual or semi-annual report or the SAI, or to
request additional information about the Fund, please contact us as
follows:
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Call: |
(215)
882-9983 |
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Write: |
19
East Eagle Road |
|
Havertown,
PA 19083 |
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Visit: |
www.burneyetfs.com |
PAPER
COPIES
Please
note that paper copies of the Fund’s shareholder reports will generally not be
sent, unless you specifically request paper copies of the Fund’s reports from
your financial intermediary, such as a broker-dealer or bank. Instead, the
reports will be made available on the Fund’s website, and you will be notified
by mail each time a report is posted and provided with a website link to access
the report.
You
may elect to receive all future Fund reports in paper free of charge. Please
contact your financial intermediary to inform them that you wish to continue
receiving paper copies of Fund shareholder reports and for details about whether
your election to receive reports in paper will apply to all funds held with your
financial intermediary.
INFORMATION
PROVIDED
BY
THE
SECURITIES
AND
EXCHANGE
COMMISSION
Information
about the Fund, including its reports and the SAI, has been filed with the SEC.
It can be reviewed on the EDGAR database on the SEC’s internet site
(http://www.sec.gov). You can also request copies of these materials, upon
payment of a duplicating fee, by electronic request at the SEC’s e-mail address
([email protected]) or by calling the SEC at (202) 551-8090.
Investment
Company Act File No. 811-22961