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4978/31/2022Series Portfolios
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Panagram
BBB-B CLO ETF
Listed
on NYSE Arca, Inc.:
CLOZ
Prospectus
November 15,
2022,
as
supplemented on December
15, 2022
The
U.S. Securities and Exchange Commission (“SEC”) has not approved or disapproved
of these securities or determined if this Prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
Panagram
BBB-B CLO ETF
A
series of Series Portfolios Trust (the “Trust”)
Panagram
BBB-B CLO ETF
Investment Objective
The Panagram BBB-B CLO ETF (the “Fund”)
seeks to generate current income, with a secondary objective of capital
preservation.
Fees and Expenses of the Fund
This
table describes the fees and expenses that you may pay if you buy, hold and sell
shares of the Fund. You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
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Annual
Fund Operating Expenses
(expenses
that you pay each year as a percentage of the value of your
investment) |
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Management
Fees |
0.50% |
Distribution
and Service (Rule 12b-1) Fees |
0.00% |
Other
Expenses(1) |
0.00% |
Total
Annual Fund Operating Expenses |
0.50% |
(1)“Other Expenses” are estimated
for the Fund’s current fiscal year.
Example
This 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 in the
Fund for the time periods indicated and then hold or sell all of your shares at
the end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Fund’s operating expenses remain the
same. 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 |
$51 |
$160 |
Portfolio Turnover
The Fund pays transaction
costs, such as 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 Fund shares are held in a taxable
account. These costs, which are not reflected in the annual Fund operating
expenses or in the Example, affect the Fund’s performance. No portfolio turnover
rate is provided for the Fund because the Fund had not commenced operations
prior to the date of this Prospectus.
Principal Investment Strategies
The
Fund is an actively-managed exchange-traded fund (“ETF”) that pursues its
investment objective by investing, under normal circumstances, at least 80% of
its net assets (plus any borrowings made for investment purposes) in
collateralized loan obligations (“CLOs”) that are rated, at the time of
purchase, between BBB+ and B- or an equivalent rating by a nationally recognized
statistical rating organization (“NRSRO”) (or, if unrated, securities deemed by
Panagram Structured Asset Management, LLC (the “Adviser” or “Panagram”) to be of
comparable quality). CLOs are structured products with a “long-only” investment
strategy (i.e.,
a strategy that does not include short positions) that issue multiple tranches
of asset-backed securities. CLOs are collateralized by a pool of loans, which
may include, among others, senior secured loans, senior unsecured loans, and
subordinate corporate loans. The Fund intends to invest primarily in BBB and BB
rated
tranches
of CLOs and is expected to have significant exposure (up to 70% of its total
assets) in CLO tranches rated below investment grade often referred to as
“high-yield” or “junk” bonds. CLOs are securities structured to be exposed to
the senior secured loans in a corporate capital structure, which means that the
loans have payment priority over unsecured debt and common equity in a default
situation. These loans are often issued as “covenant lite” loans, which have few
or no financial maintenance covenants. The Fund’s typical investments are
mezzanine or lower priority CLO tranches which are subordinate to other tranches
of the CLO (i.e.,
these other tranches have payment priority over the tranches held by the Fund).
The
Fund is a “non-diversified” fund, meaning that a relatively high percentage of
its assets are invested in a limited number of issuers of securities. However,
the Fund will not invest more than 20% of its portfolio in CLOs managed by a
single CLO manager. The Fund will only invest in CLOs with a minimum initial
total offering size of $250 million. In addition to investments in CLOs rated,
at the time of purchase, between BBB+ and B-, the Fund may also invest up to 10%
of its portfolio in CLOs rated above BBB+ by an NRSRO. The Fund may also invest
up to 70% of its total assets in CLOs related below investment grade. The Fund
invests primarily in CLOs that are U.S. dollar denominated, and the Fund may
invest in CLOs of any maturity or duration. CLOs typically have floating or
variable interest rates, though some CLOs have fixed rates.
With
a specialized focus on CLOs through multiple credit cycles, the Fund’s portfolio
managers will select investments for the Fund by sourcing opportunities in
primary (i.e.,
the initial offering for a security) and secondary markets (i.e.,
markets where the securities are traded following the initial offering) for CLO
debt securities. The manager focuses on CLO tranches rated below investment
grade, which may be subordinate to other tranches of the CLO. In addition, the
Adviser will evaluate the Fund’s investment portfolio to balance total returns
and capital protection by analyzing structural leverage and portfolio
composition.
The
Fund is actively managed and does not seek to track the performance of any
particular index. In selecting investments for the Fund, the Adviser applies a
bottom-up approach that reviews the current market environment for potential
investment opportunities, including newly issued and secondary market CLOs. The
Adviser monitors the Fund’s portfolio on a daily basis to proactively position
investments for changing market conditions, and the Fund may sell or reduce a
position when a more attractive investment becomes available or when the value
of an investment becomes unattractive, taking into consideration current market
conditions. The Fund may also sell an investment based on the Adviser’s
re-evaluation of an investment’s credit profile.
Principal Risks
As
with any fund, there are risks to investing. An investment in the Fund is not a
deposit of a bank and is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency.
In
addition to possibly not achieving your investment goals,
you could lose all or a portion
of your investment in the Fund over short or long periods of
time. The principal risks of
investing in the Fund are summarized below.
ETF
Risks.
The
Fund is an ETF, and, as a result of its structure, it is exposed to the
following risks:
•Authorized
Participants, Market Makers, and Liquidity Providers Concentration
Risk.
Only a limited number of institutional investors (known as “Authorized
Participants” or “APs”) are authorized to purchase and redeem shares directly
from the Fund. 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 of the Fund may trade at a material discount to
the Fund’s net asset value (“NAV”), which may result in a widening of the bid
and ask spread (i.e.,
the current best prices to buy and sell the Fund), 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.
•Costs
of Buying or Selling Shares.
Due to the costs of buying or selling shares of the Fund, including brokerage
commissions imposed by brokers and bid/ask spreads, frequent trading of shares
may significantly reduce investment results and an investment in shares may not
be advisable for investors who anticipate regularly making small
investments.
•Shares
May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. Although it is expected that the market price of shares
of the Fund will approximate the intraday value of the Fund’s holdings used to
calculate the Fund’s NAV, there may be times when the market price of shares is
more than the intra-day NAV (premium) or less than the intra-day NAV (discount),
which may result in a widening of the bid and ask spread, due to supply and
demand of shares or during periods of market volatility. This risk is heightened
in times of market volatility, periods of steep market declines, and periods
when there is limited trading activity for shares in the secondary market, in
which case such premiums or discounts may be significant.
•Trading.
Although shares of the Fund are listed for trading on the NYSE Arca (the
“Exchange”), there can be no assurance that an active trading market for shares
will develop or be maintained or that shares will trade with any volume, or at
all, on any stock exchange. In stressed market conditions, the market for shares
of the Fund may become less liquid in response to deteriorating liquidity in the
markets for the Fund’s underlying portfolio holdings. This adverse effect on
liquidity for the Fund’s shares, in turn, can lead to differences between the
market price of the Fund’s shares and the underlying value of those shares,
which may result in a widening of the bid and ask spread. In addition, trading
in Fund shares may be halted due to market conditions or for reasons that, in
the view of the Exchange, make trading in shares of the Fund
inadvisable.
Cash
Transaction Risk.
Unlike
other ETFs, the Fund expects to effect most of its creations and redemptions
primarily for cash, rather than in-kind securities. Cash purchases and sales may
cause the Fund to incur portfolio transaction fees, gains or losses on the
sales, or charges or delays in investing the cash that it would otherwise not
incur if a purchase or sale was made on an in-kind basis.
New
Fund Risk.
The Fund is a recently organized investment company with no operating history.
As a result, prospective investors have no track record or history on which to
base their investment decision.
CLO
Risk.
The
risks of investing in CLO securities include both the credit risk associated
with the underlying loans combined with the risks associated with the CLO
structure governing the priority of payments (and any legal and counterparty
risk associated with carrying out the priority of payments). This Fund intends
to invest primarily in BBB and BB rated tranches (or equivalent ratings by a
NRSRO); however, these ratings do not constitute a guarantee of credit quality
and it’s possible that under stressed market environments these tranches could
experience substantial losses due to actual defaults, write-downs of the equity
or other subordinated tranches, increased sensitivity to defaults due to
collateral default and impairment of subordinate tranches, market anticipation
of defaults, and general market aversion to CLO securities as an asset class. In
addition, these risks are heightened with respect to the below investment grade
CLOs in which the Fund may significantly invest (up to 70% of the Fund’s total
assets). The most common risks associated with investing in CLOs are interest
rate risk, credit risk, liquidity risk, prepayment risk (i.e.,
the risk that in a declining interest rate period CLO tranches could be
refinanced or paid off prior to their maturities and the Fund would then have to
reinvest the proceeds at a lower rate), and the risk of default of the
underlying asset.
•Mezzanine
CLO Risk.
The Fund intends to invest primarily in BBB and BB rated tranches of CLO
securities that are subordinate to higher-rated tranches (e.g., tranches rated
AAA+ through A-) in terms of payment priority. Subordinated (i.e., mezzanine)
CLO tranches are subject to higher credit risk and liquidity risk relative to
more senior CLO tranches. Mezzanine tranches may be of investment grade or
non-investment grade quality, however, the Fund is expected to have significant
exposure to below investment grade CLO tranches (up to 70% of its total assets).
To the extent a CLO or its underlying loans experience default or are having
difficulty making principal and/or interest payments, subordinate CLO tranches
will be more likely to experience adverse impacts, and such impacts will be more
severe, relative to more senior or higher-rated CLO securities, which in turn
will adversely affect the performance of the Fund. Under certain circumstances,
no payment of interest or principal can be made
to
a holder of a mezzanine CLO tranche until the interest or principal payments
have been made in full to holders of the Senior tranches.
Covenant
Lite Loan Risk. The
Fund may invest in, or obtain exposure to, loans that are “covenant lite.”
Covenants contained in loan documentation are intended to protect lenders by
imposing certain restrictions and other limitations on a borrower’s operations
or assets and by providing certain information and consent rights to lenders.
Covenant lite loans may lack financial maintenance covenants that in certain
situations can allow lenders to claim a default on the loan to seek to protect
the interests of the lenders. The absence of financial maintenance covenants in
a covenant lite loan might result in a lower recovery in the event of a default
by the borrower. Covenant lite loans have become much more prevalent in recent
years.
Debt
Securities Risk. The
Fund’s investment in debt securities may subject it to the following
risks:
•Liquidity
Risk.
Liquidity risk refers to the possibility that the Fund may not be able to sell
or buy a security or close out an investment contract at a favorable price or
time. Consequently, the Fund may have to accept a lower price to sell a
security, sell other securities to raise cash, or give up an investment
opportunity, any of which could have a negative effect on the Fund’s
performance. Infrequent trading of securities also may lead to an increase in
their price volatility. CLOs, and their underlying loan obligations, are
typically not registered for sale to the public and therefore are subject to
certain restrictions on transfer and sale, potentially making them less liquid
than other types of securities.
•Interest
Rate Risk.
The Fund may be subject to a greater risk of rising rates as the market exits a
period of historically low rates and current effects of central bank monetary
policy and government fiscal policy are being passed through to the market. As
interest rates rise, borrowers with floating rate loans may experience
difficulty servicing their loans, resulting in delinquencies and defaults, which
will result in a reduction in cash flow to the CLO and the CLO investors,
including the Fund. An increase in interest rates may cause the value of
fixed-income securities held by the Fund to decline. As interest rates decrease,
issuers of the underlying loan obligations may refinance their loans, which may
require the CLO to reinvest cash at what may be an inopportune
time.
•Floating
Rate Obligations Risk. Securities
with floating or variable interest rates can be less sensitive to interest rate
changes than securities with fixed interest rates, but may decline in value if
their interest rates do not rise as much, or as quickly, as interest rates in
general. Conversely, floating rate securities will not generally increase in
value if interest rates decline. A decline in interest rates may result in a
reduction of income received from floating rate securities held by the Fund and
may adversely affect the value of the Fund’s shares.
•Credit
Risk. Debt
issuers
and other counterparties may not honor their obligations. For CLOs, the primary
source of credit risk is the ability of the underlying portfolio of loans to
generate sufficient cash flow to pay investors on a full and timely basis when
principal and/or interest payments are due. Default in payment on the underlying
loans will result in less cash flow from the underlying portfolio and, in turn,
less funds available to pay investors in the CLO.
•Call
Risk.
CLO securities are issued with a non-call period. After the end of the non-call
period, the
majority investor in the equity tranche can call (i.e.
redeem or refinance) the securities issued by the CLO in full. The Fund may not
be able to accurately predict when or which of its CLO investments may be
called, resulting in the Fund having to reinvest the proceeds in unfavorable
market conditions (i.e.
at lower spreads), which could cause a decline in the Fund’s
income.
•Extension
Risk.
When interest rates rise, certain obligations will be paid off by the obligor
more slowly than anticipated, causing the value of these securities to fall.
Rising interest rates tend to extend the duration of securities, making them
more sensitive to future changes in interest rates.
High
Yield Securities Risk.
The Fund intends to invest a significant portion (up to 70% of its total assets)
in CLO securities rated below investment grade. Debt investments rated below
investment grade are sometimes referred to as high yield or “junk”. Investing in
lower-rated or unrated securities (including CLOs) involves special risks in
addition to the risks associated with investments in higher-rated debt
securities, including a high degree of credit risk. These securities
may
be more sensitive than investment grade CLO securities to economic, political,
or market changes or developments which could impact the underlying loans of a
CLO and may adversely affect the value of the below investment grade CLO
security. Issuers of the below investment grade loans that underlie a CLO may
not be as financially durable as those issuers with higher credit ratings. The
secondary markets on which lower-rated or unrated securities are traded may be
less liquid than the market for higher-grade securities. Less liquidity in the
secondary trading markets could adversely affect and cause large fluctuations in
the value of such investments. These risks may be present in lower rated CLO
securities (such as those rated BBB or BBB-, or their equivalent), even if they
are not rated below investment grade.
Income
Risk.
The Fund’s income may decline if interest rates fall. This decline in income can
occur because most of the CLO debt instruments held by the Fund will have
floating or variable interest rates.
Valuation
Risk.
The
CLO
securities in which the Fund invests may be priced differently than the value
realized upon such security’s sale. In times of market instability, valuation
may be more unreliable. The structure of certain CLOs may subject them to price
volatility and enhanced liquidity and valuation risk in times of market
stress.
CLO
Manager Risk. The
Fund intends to invest in CLO securities issued by CLOs that are managed by
unaffiliated collateral managers. The Fund is dependent on the skill and
expertise of such managers. CLO managers are responsible for selecting,
managing, and replacing the underlying bank loans within a CLO. There can be no
guarantee that any collateral manager will continue to manage such CLO through
the life of the investment. Collateral managers are subject to removal or
replacement by other holders of CLO securities or may voluntarily resign.
Newly
Issued Securities Risk.
The
Fund may invest in newly issued securities or “new issues.” New issues may not
be consistently available to the Fund for investing, particularly as the Fund’s
asset base grows. New issues may be volatile in price due to the absence of a
prior trading market, limited quantities available, and an extended settlement
period.
Extended
Settlement Risk. New
issue CLOs purchased in the primary market typically experience extended
settlement periods, often longer than seven days. During the settlement window,
between purchasing and settlement, these securities are typically less liquid
than secondary market purchases.
London
Interbank Offered Rate (“LIBOR”) Risk.
The CLO debt securities in which the Fund typically invests earn interest at,
and obtain financing at, a floating rate, which has traditionally been based on
LIBOR. Following the global financial crisis, regulators determined that
existing interest rate benchmarks should be reformed based on concerns that
LIBOR was susceptible to manipulation. The replacement rate for U.S. Dollar
LIBOR is the Secured Overnight Financing Rate (“SOFR”), which measures the cost
of overnight borrowings through repurchase agreement transactions collateralized
by U.S. Treasury securities. As of January 1, 2022, all new issue CLO securities
utilize SOFR as the LIBOR replacement rate. For CLOs issued prior to 2022, the
use of LIBOR is being phased out as loan portfolios transition to SOFR. The Fund
will invest in CLOs issued prior to 2022 through the secondary market, some of
which are still based on LIBOR, and there is risk associated with transitioning
such securities from LIBOR to SOFR. To the extent that the replacement rate
utilized for senior secured loans held by a CLO differs from the rate utilized
by the CLO itself, there is a basis risk between the two rates (e.g., SOFR
versus LIBOR). This means the CLO could experience an interest rate mismatch
between its assets and liabilities, which could have an adverse impact on the
cash flows distributed to CLO equity investors as well as the Fund’s net
investment income and portfolio returns until such mismatch is corrected or
minimized.
Market
Events Risk.
One
or more markets in which the Fund invests may go down in value, including the
possibility that the markets will go down sharply and unpredictably. This may be
due to numerous factors, including interest rates, the outlook for corporate
profits, the health of the national and world economies, national and world
social and political events, and the fluctuation of other stock markets around
the world. The global pandemic outbreak of an infectious respiratory illness
caused by a novel coronavirus known as COVID-19 and subsequent efforts to
contain its spread have resulted and may continue to result in, among other
things, substantial market volatility and reduced liquidity in financial
markets; exchange trading suspensions and closures; higher default rates; travel
restrictions and disruptions; significant global disruptions to business
operations and supply chains; lower consumer demand for goods and services;
significant job losses and increasing unemployment; event and service
cancellations and restrictions; significant challenges in healthcare service
preparation and delivery; prolonged quarantines; and general concern and
uncertainty. The impact of
this
pandemic and any other public health emergencies (such as any other epidemics or
pandemics) that may arise in the future could adversely affect the economies of
many nations or the entire global economy and the financial performance of
individual issuers, sectors, industries, asset classes, and markets in
significant and unforeseen ways.
Privately
Issued Securities Risk.
CLO
securities are generally privately-issued securities, and are normally purchased
pursuant to Rule 144A or Regulation S under the Securities Act of 1933, as
amended (the “Securities Act”). Privately-issued securities typically may be
resold only to qualified institutional buyers, in a privately negotiated
transaction, to a limited number of purchasers, or in limited quantities after
they have been held for a specified period of time and other conditions are met
for an exemption from registration. Because there may be relatively few
potential purchasers for such securities, especially under adverse market or
economic conditions or in the event of adverse changes in the financial
condition of the issuer, the Fund may find markets for these securities are more
thinly traded. At times, it also may be more difficult to determine the fair
value of such securities for purposes of computing the Fund’s net asset value
per share (“NAV”) due to the absence of an active trading market.
Management
Risk.
The
Fund’s principal investment strategies involve actively trading securities,
which could result in a high portfolio turnover rate, which could increase
transaction costs (thus lowering performance) and taxable distributions.
High
Portfolio Turnover Risk. High
portfolio turnover may result in higher transaction costs and potential for
taxable capital gains, both of which could have a negative effect on the Fund’s
performance.
Non-diversified
Fund Risk.
The Fund is classified as a “non-diversified”
fund under the Investment Company Act of 1940 (the “1940 Act”), as amended.
Therefore, the Fund may invest a relatively high percentage of its assets in a
smaller number of issuers or may invest a larger proportion of its assets in a
single issuer. Moreover, the gains and losses on a single investment may have a
greater impact on the Fund’s NAV and may make the Fund more volatile than more
diversified funds.
Performance
Performance information for the Fund is not
included because the Fund had not commenced operations prior to the date of this
Prospectus. Performance information will be available once the
Fund has at least one calendar year of performance. The Fund’s past performance,
before and after taxes, is not necessarily an indication of how the Fund will
perform in the future and does not guarantee future results.
Updated performance information will be available on the Fund’s website at
www.clozfund.com
or by calling the Fund toll-free at 800-617-0004.
Management
Investment
Adviser
Panagram
Structured Asset Management, LLC is the Fund’s investment adviser.
Portfolio
Managers
Mr.
John Kim and Mr. Tim Wickstrom are the portfolio managers responsible for the
day-to-day management of the Fund. They have each managed the Fund since its
inception in 2023.
Purchase
and Sale of Fund Shares
Shares
of the Fund are listed on the Exchange, and individual shares may only be bought
and sold in the secondary market through brokers at market prices, rather than
NAV. Because shares of the Fund trade at market prices rather than NAV, Shares
may trade at a price greater than NAV (premium) or less than NAV
(discount).
The
Fund issues and redeems its shares at NAV only in large specified numbers of
shares known as “Creation Units,” which only APs (typically, broker-dealers) may
purchase or redeem. The Fund generally issues and redeems Creation Units in
exchange for a portfolio of securities and/or a designated amount of U.S.
cash.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary
market (the “bid-ask spread”). Recent information about the Fund, including its
NAV, market price, premiums and discounts, and bid-ask spreads is available on
the Fund’s website at www.clozfund.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged account. Distributions on investments made through
tax-deferred arrangements may be taxed later upon withdrawal of assets from
those accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase Shares through a broker-dealer or other financial intermediary
(such as a bank) (an “Intermediary”), the Adviser or its affiliates may pay
Intermediaries for certain activities related to the Fund, including
participation in activities that are designed to make Intermediaries more
knowledgeable about exchange traded products, including the Fund, or for other
activities, such as marketing, educational training or other initiatives related
to the sale or promotion of Shares. These payments may create a conflict of
interest by influencing the Intermediary and your salesperson to recommend the
Fund over another investment. Any such arrangements do not result in increased
Fund expenses. Ask your salesperson or visit the Intermediary’s website for more
information.
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Additional
Information About the Fund |
Investment
Objective
The
Fund seeks to generate current income, with a secondary objective of capital
preservation. The Fund’s investment objective has been adopted as a
non-fundamental investment policy and may be changed without shareholder
approval upon written notice to shareholders.
Principal
Investment Strategies
The
Fund is an actively-managed exchange-traded fund (“ETF”) that pursues its
investment objective by investing, under normal circumstances, at least 80% of
its net assets (plus any borrowings made for investment purposes) in
collateralized loan obligations (“CLOs”) that are rated, at the time of
purchase, between BBB+ and B- or an equivalent rating by a nationally recognized
statistical rating organization (“NRSRO”) (or, if unrated, securities deemed by
the Adviser to be of comparable quality). The Fund may not change this policy
without first changing its name, upon 60 days’ prior written notice to
shareholders.
CLOs
are trusts collateralized by a pool of primarily senior secured loans, (although
they may include senior unsecured loans or subordinate corporate loans), highly
diversified by underlying borrower and industry and subject to a variety of
asset concentration limitations. CLOs are asset-backed trusts that issue
multiple tranches varying in risk and yield. Senior tranches are paid from the
cash flows from the underlying assets before the junior tranches and equity or
“first loss” tranches. Losses are first borne by the equity tranches, next by
the junior tranches, and finally by the senior tranches. Senior tranches pay the
lowest interest rates but are generally safer investments than more junior
tranches because, upon principal repayment in the collateral pool, senior
tranches are typically paid first. The most junior tranches would attract the
highest interest rates but suffer the highest risk of loss should the holder of
an underlying loan default. If some loans default and the cash collected by the
CLO is insufficient to pay all of its investors, those in the lowest, most
junior tranches suffer losses first.
The
Fund intends to invest primarily in BBB and BB rated tranches of CLOs and is
expected to have significant exposure (up to 70% of its total assets) in CLO
tranches rated below investment grade often referred to as “high-yield” or
“junk” bonds. CLOs are securities structured to be exposed to the senior secured
loans in a corporate capital structure, which means that the loans have payment
priority over unsecured debt and common equity in a default situation. These
loans are often issued as “covenant lite” loans, which have few or no financial
maintenance covenants. The Fund’s typical investments are mezzanine or lower
priority CLO tranches which are subordinate to other tranches of the CLO
(i.e.,
these other tranches have payment priority over the tranches held by the
Fund).
The
Fund is a “non-diversified” fund, meaning that a relatively high percentage of
its assets are invested in a limited number of issuers of securities. However,
the Fund will not invest more than 20% of its portfolio in CLOs managed by a
single CLO manager. The Fund will only invest in CLOs with a minimum initial
total offering size of $250 million. In addition to investments in CLOs rated,
at the time of purchase, between BBB+ and B-, the Fund may also invest up to 10%
of its portfolio in CLOs rated above BBB+ by an NRSRO. The Fund may also invest
up to 70% of its total assets in CLOs related below investment grade. The Fund
invests primarily in CLOs that are U.S. dollar denominated, and the Fund and may
invest in CLOs of any maturity or duration. CLOs typically have floating or
variable interest rates, though some CLOs have fixed rates.
With
a specialized focus on CLOs through multiple credit cycles, the Fund’s portfolio
managers will select investments for the Fund by sourcing opportunities in
primary (i.e.,
the initial offering for a security) and secondary markets (i.e.,
markets where the securities are traded following the initial offering) for CLO
debt securities. The manager focuses on
CLO
tranches rated below investment grade, which may be subordinate to other
tranches of the CLO. The Adviser focuses primarily on CLO securities and related
investments.
The
Adviser will evaluate the Fund’s investment portfolio to balance total returns
and capital protection by analyzing structural leverage and portfolio
composition. The Adviser’s investment and security selection process focuses on
assessing the skills of the CLO collateral manager and analyzing the structure
of a CLO.
The
Fund is actively managed and does not seek to track the performance of any
particular index. In selecting investments for the Fund, the Adviser applies a
bottom-up approach that reviews the current market environment for potential
investment opportunities, including newly issued and secondary market CLOs. The
Adviser monitors the Fund’s portfolio on a daily basis to proactively position
investments for changing market conditions, and the Fund may sell or reduce a
position when a more attractive investment becomes available or when the value
of an investment becomes unattractive, taking into consideration current market
conditions. The Fund may also sell an investment based on the Adviser’s
re-evaluation of an investment’s credit profile.
Please
see the Fund’s SAI for additional information about the securities and
investment strategies described in this Prospectus and about additional
securities and investment strategies that may be used by the Fund.
Temporary
Defensive Positions.
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with the Fund’s principal investment strategies in an attempt to
respond to adverse or unstable market, economic, political, or other conditions.
During such times, the Fund may hold up to 100% of its portfolio in cash or cash
equivalent positions. When the Fund take a temporary defensive position, the
Fund may not be able to pursue its investment objectives.
On
a regular basis, the Fund may also invest a portion of its assets in cash or
other short-term instruments, such as money market instruments or money market
funds, while deploying new capital, for liquidity management purposes, managing
redemptions or for defensive purposes while navigating unusual market
conditions.
Principal
Risks
An
investment in the Fund entails risks. The Fund could lose money, or its
performance could trail that of other investment alternatives. The following
provides additional information about the Fund’s principal risks. It is
important that investors closely review and understand these risks before making
an investment decision.
ETF
Risks.
The
Fund is an ETF, and, as a result of its structure, it is exposed to the
following risks:
•Authorized
Participants, Market Makers, and Liquidity Providers Concentration
Risk.
Only a limited number of institutional investors (known as “Authorized
Participants” or “APs”) are authorized to purchase and redeem shares directly
from the Fund. 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 of the Fund may trade at a material discount to
the Fund’s net asset value (“NAV”), which may result in a widening of the bid
and ask spread (i.e.,
the current best prices to buy and sell the Fund), 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.
•Costs
of Buying or Selling Shares.
Investors buying or selling shares of the Fund 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 of the Fund. In addition, secondary market investors will also incur
the cost of the difference between the price at which an investor is willing to
buy shares of the Fund (the “bid” price) and the price at which an investor is
willing to sell shares of the Fund (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 of the Fund 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 Fund’s shares have little trading volume and
market liquidity. Further, a relatively small investor base in the Fund, asset
swings in the Fund and/or increased market volatility may cause increased
bid/ask spreads. Due to the costs of buying or selling shares of the Fund,
including bid/ask spreads, frequent trading of the Fund’s shares may
significantly reduce investment results and an investment in Fund shares may not
be advisable for investors who anticipate regularly making small
investments.
•Shares
May Trade at Prices Other Than NAV.
As with all ETFs, shares of the Fund may be bought and sold in the secondary
market at market prices. Although it is expected that the market price of shares
of the Fund will approximate the intraday value of the Fund’s holdings used to
calculate the Fund’s NAV, there may be times when the market price of shares is
more than the intra-day NAV (premium) or less than the intra-day NAV (discount),
which may result in a widening of the bid and ask spread, due to supply and
demand of shares or during periods of market volatility. This risk is heightened
in times of market volatility, periods of steep market declines, and periods
when there is limited trading activity for shares in the secondary market, in
which case such premiums or discounts may be significant.
•Trading.
Although shares of the Fund are listed for trading on the Exchange and may be
listed or traded on U.S. and non-U.S. stock exchanges other than the Exchange,
there can be no assurance that an active trading market for such shares will
develop or be maintained. Trading in Shares may be halted due to market
conditions or for reasons that, in the view of the Exchange, make trading in
Shares inadvisable. In addition, trading in shares of the Fund on the Exchange
is subject to trading halts caused by extraordinary market volatility pursuant
to 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%). Additional rules applicable to the
Exchange may halt trading in shares of the Fund when extraordinary volatility
causes sudden, significant swings in the market price of shares of the Fund.
There can be no assurance that shares of the Fund will trade with any volume, or
at all, on any stock exchange. In stressed market conditions, the market for the
Fund’s shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings. These factors, among
others, may lead to the Fund’s shares trading at a premium or discount to NAV,
which may result in a widening of the bid and ask spread.
•Early
Close/Trading Halt.
An exchange or market may close early or issue trading halts on specific
securities or financial instruments. The ability to trade certain securities or
financial instruments may be restricted, which may disrupt the Fund’s creation
and redemption process, potentially affect the price at which the Fund’s shares
trade in the secondary market, and/or result in the Fund being unable to trade
certain securities or financial instruments. In these circumstances, the Fund
may be unable to rebalance its portfolio, may be unable to accurately price its
investments and/or may incur substantial trading losses.
Cash
Transaction Risk. Unlike
other ETFs, the Fund expects to effect most of its creations and redemptions
primarily for cash, rather than in-kind securities. This means the Fund may be
required to sell portfolio securities to obtain the cash needed to distribute
redemption proceeds. If the Fund recognizes gain on these sales, this generally
will cause the Fund to recognize gain it might not otherwise have recognized if
it were to distribute portfolio securities in-kind or to recognize such gain
sooner than would otherwise be required. As a result, an investment in the Fund
may be less tax-efficient than an investment in a more conventional ETF. Other
ETFs generally are able to make in-kind redemptions and avoid realizing gains in
connection with transactions designed to raise cash to meet redemption requests.
The Fund generally intends to distribute these gains to shareholders to avoid
being taxed on this gain at the Fund level and otherwise comply with the special
tax rules that apply to it. This strategy may cause shareholders to be subject
to tax on gains they would not otherwise be subject to, or at an earlier date
than, if they had made an investment in a different ETF. Additionally,
transactions may have to be carried out over several days if the securities
market is relatively illiquid and may involve considerable transaction fees and
taxes. Cash purchases may cause the Fund to incur portfolio transaction fees,
charges or delays in investing the cash that it would otherwise not incur if a
purchase was made on an in-kind basis.
New
Fund Risk.
As of the date of this Prospectus, the Fund has no operating history and there
can be no assurance that the Fund will grow to or maintain an economically
viable size, in which case the Board may determine to liquidate the
Fund.
Liquidation of the Fund can be initiated without shareholder approval by the
Trust’s Board of Trustees if it determines it is in the best interest of
shareholders. As a result, the timing of any Fund liquidation may not be
favorable to certain individual shareholders.
CLO
Risk.
The
risks of investing in CLO securities include both the credit risk associated
with the underlying loans combined with the risks associated with the CLO
structure governing the priority of payments (and any legal and counterparty
risk associated with carrying out the priority of payments). This Fund intends
to invest primarily in BBB and BB rated tranches (or equivalent ratings by a
NRSRO); however, these ratings do not constitute a guarantee of credit quality
and it’s possible that under stressed market environments these tranches could
experience substantial losses due to actual defaults, write-downs of the equity
or other subordinated tranches, increased sensitivity to defaults due to
collateral default and impairment of subordinate tranches, market anticipation
of defaults, and general market aversion to CLO securities as an asset class. In
addition, these risks are heightened with respect to the below investment grade
CLOs in which the Fund may significantly invest (up to 70% of the Fund’s total
assets). The most common risks associated with investing in CLOs are interest
rate risk, credit risk, liquidity risk, prepayment risk (i.e.,
the risk that in a declining interest rate period CLO tranches could be
refinanced or paid off prior to their maturities and the Fund would then have to
reinvest the proceeds at a lower rate), and the risk of default of the
underlying asset.
•Mezzanine
CLO Risk.
The Fund intends to invest primarily in BBB and BB rated tranches of CLO
securities that are subordinate to higher-rated tranches (e.g.,
tranches
rated AAA+ through A-) in terms of payment priority. Subordinated (i.e.,
mezzanine) CLO tranches are subject to higher credit risk and liquidity risk
relative to more senior CLO tranches. Mezzanine tranches may be of investment
grade or non-investment grade quality, however, the Fund is expected to have
significant exposure to below investment grade CLO tranches (up to 70% of its
total assets). To the extent a CLO or its underlying loans experience default or
are having difficulty making principal and/or interest payments, subordinate CLO
tranches will be more likely to experience adverse impacts, and such impacts
will be more severe, relative to more senior or higher-rated CLO securities,
which in turn will adversely affect the performance of the Fund. Under certain
circumstances, no payment of interest or principal can be made to a holder of a
mezzanine CLO tranche until the interest or principal payments have been made in
full to holders of the Senior tranches.
Covenant
Lite Loan Risk. The
Fund may invest in, or obtain exposure to, loans that are “covenant lite.”
Covenants contained in loan documentation are intended to protect lenders by
imposing certain restrictions and other limitations on a borrower’s operations
or assets and by providing certain information and consent rights to lenders.
Covenant lite loans may lack financial maintenance covenants that in certain
situations can allow lenders to claim a default on the loan to seek to protect
the interests of the lenders. The absence of financial maintenance covenants in
a covenant lite loan might result in a lower recovery in the event of a default
by the borrower. Covenant lite loans have become much more prevalent in recent
years.
Debt
Securities Risks. The
Fund’s investments in debt securities may be subject to the following risks:
•Liquidity
Risk.
Liquidity risk refers to the possibility that the Fund may not be able to sell
or buy a security or close out an investment contract at a favorable price or
time. Consequently, the Fund may have to accept a lower price to sell a
security, sell other securities to raise cash, or give up an investment
opportunity, any of which could have a negative effect on the Fund’s
performance. Infrequent trading of securities also may lead to an increase in
their price volatility. CLOs, and their underlying loan obligations, are
typically not registered for sale to the public and therefore are subject to
certain restrictions on transfer and sale, potentially making them less liquid
than other types of securities. Additionally, when the Fund purchases a newly
issued CLO security directly from the issuer (rather than from the secondary
market), there often may be a delayed settlement period, during which time the
liquidity of the CLO may be further reduced. During periods of limited liquidity
and higher price volatility, the Fund’s ability to acquire or dispose of CLO
securities at a price and time the Fund deems advantageous may be impaired. CLO
securities are generally considered to be long-term investments and there is no
guarantee that an active secondary market will exist or be maintained for any
given CLO security.
•Interest
Rate Risk.
The Fund may be subject to a greater risk of rising rates as the market exits a
period of historically low rates and current effects of central bank monetary
policy and government fiscal policy are being passed through to the market. As
interest rates rise, borrowers with floating rate loans may experience
difficulty servicing their loans, resulting in delinquencies and defaults, which
will result in a reduction in cash flow to the CLO and the CLO investors,
including the Fund. An increase in interest rates may cause the value of
fixed-income securities held by the Fund to decline. As interest rates decrease,
issuers of the underlying loan obligations may refinance their loans, which may
require the CLO to reinvest cash at what may be an inopportune
time.
•Floating
Rate Obligations Risk. Securities
with floating or variable interest rates can be less sensitive to interest rate
changes than securities with fixed interest rates, but may decline in value if
their interest rates do not rise as much, or as quickly, as interest rates in
general. Conversely, floating rate securities will not generally increase in
value if interest rates decline. A decline in interest rates may result in a
reduction of income received from floating rate securities held by the Fund and
may adversely affect the value of the Fund’s shares. The interest rate for a
floating rate note resets or adjusts periodically by reference to a benchmark
interest rate. Benchmark interest rates, such as LIBOR or SOFR, may not
accurately track market interest rates.
•Credit
Risk. Debt
issuers
and other counterparties may not honor their obligations. For CLOs, the primary
source of credit risk is the ability of the underlying portfolio of loans to
generate sufficient cash flow to pay investors on a full and timely basis when
principal and/or interest payments are due. Default in payment on the underlying
loans will result in less cash flow from the underlying portfolio and, in turn,
less funds available to pay investors in the CLO.
•Call
Risk.
CLO securities are issued with a non-call period. After the end of the non-call
period, the
majority investor in the equity tranche can call (i.e.,
redeem or refinance) the securities issued by the CLO in full. The Fund may not
be able to accurately predict when or which of its CLO investments may be
called, resulting in the Fund having to reinvest the proceeds in unfavorable
market conditions (i.e.,
at lower spreads), which could cause a decline in the Fund’s
income.
•Extension
Risk.
When interest rates rise, certain obligations will be paid off by the obligor
more slowly than anticipated, causing the value of these securities to fall.
Rising interest rates tend to extend the duration of securities, making them
more sensitive to future changes in interest rates.
High
Yield Securities Risk.
The
Fund intends to invest a significant portion (up to 70% of its total assets) in
CLO securities rated below investment grade. Debt investments rated below
investment grade are sometimes referred to as high yield or “junk”. Investing in
lower-rated or unrated securities (including CLOs) involves special risks in
addition to the risks associated with investments in higher-rated debt
securities, including a high degree of credit risk. These securities may be more
sensitive than investment grade CLO securities to economic, political or market
changes or developments which could impact the underlying loans of a CLO and may
adversely affect the value of the below investment grade CLO security. Issuers
of the below investment grade loans that underlie a CLO may not be as
financially durable as those issuers with higher credit ratings. Such issuers
may be more susceptible to losses and real or perceived adverse economic and
competitive industry conditions than higher-grade securities. The secondary
markets on which lower-rated or unrated securities are traded may be less liquid
than the market for higher-grade securities. Less liquidity in the secondary
trading markets could adversely affect and cause large fluctuations in the value
of such investments. Adverse publicity and investor perceptions, whether based
on fundamental analysis, may decrease the values and liquidity of lower-rated or
unrated securities, especially in a thinly traded market. It is possible that a
major economic recession could severely disrupt the market for such securities
and may have an adverse impact on the value of such securities. In addition, it
is possible that any such economic downturn could adversely affect the ability
of the issuers of such securities to repay principal and pay interest on the
bonds and increase the incidence of default of such securities. The use of
credit ratings as the sole method of evaluating lower-rated or unrated
securities can involve certain risks. For example, credit ratings evaluate the
safety of principal and interest payments, not the market value risk of
lower-rated securities. In addition, credit rating agencies may fail to change
credit ratings in a timely fashion to reflect events since the security was
rated. These risks may be present in lower rated CLO securities (such as those
rated BBB or BBB-, or their equivalent), even if they are not rated below
investment grade.
Income
Risk. The
Fund’s income may decline if interest rates fall. This decline in income can
occur because most of the CLO debt instruments held by the Fund will have
floating or variable interest rates.
Valuation
Risk.
The
CLO
securities in which the Fund invests may be priced differently than the value
realized upon such security’s sale. In times of market instability, valuation
may be more unreliable. The structure of certain CLOs may subject them to price
volatility and enhanced liquidity and valuation risk in times of market
stress.
CLO
Manager Risk. The
Fund intends to invest in CLO securities issued by CLOs that are managed by
unaffiliated collateral managers. The Fund is dependent on the skill and
expertise of such managers. CLO managers are responsible for selecting, managing
and replacing the underlying bank loans within a CLO. There can be no guarantee
that any collateral manager will continue to manage such CLO through the life of
the investment. Collateral managers are subject to removal or replacement by
other holders of CLO securities or may voluntarily resign. Adverse developments
with respect to a CLO manager, such as personnel and resource constraints,
regulatory issues, or other developments may impact the ability and/or
performance of the CLO manager and may adversely impact the performance of the
CLO securities in which the Fund invests.
Newly
Issued Securities Risk.
The
Fund may invest newly issued securities or “new issues.” New issues may not be
consistently available to the Fund for investing, particularly as the Fund’s
asset base grows. New issues may be volatile in price due to the absence of a
prior trading market, limited quantities available, and an extended settlement
period.
Extended
Settlement Risk. New
issue CLOs purchased in the primary market typically experience extended
settlement periods, often longer than seven days. During the settlement window,
between purchasing and settlement, these securities are typically less liquid
than secondary market purchases.
London
Interbank Offered Rate (“LIBOR”) Risk.
The CLO debt securities in which the Fund typically invests earn interest at,
and obtain financing at, a floating rate, which has traditionally been based on
LIBOR. Following the global financial crisis, regulators determined that
existing interest rate benchmarks should be reformed based on concerns that
LIBOR was susceptible to manipulation. The replacement rate for U.S. Dollar
LIBOR is the Secured Overnight Financing Rate (“SOFR”), which measures the cost
of overnight borrowings through repurchase agreement transactions collateralized
by U.S. Treasury securities. As of January 1, 2022, all new issue CLO securities
utilize SOFR as the LIBOR replacement rate.
For
CLOs issued prior to 2022, the use of LIBOR is being phased out as loan
portfolios transition to SOFR. Certain CLOs and senior secured loans held by
CLOs have already transitioned to utilizing SOFR. The Fund will invest in CLOs
issued prior to 2022 through the secondary market, some of which are still based
on LIBOR, and there is risk associated with transitioning such securities from
LIBOR to SOFR. To the extent that the replacement rate utilized for senior
secured loans held by a CLO differs from the rate utilized by the CLO itself,
there is a basis risk between the two rates (e.g., SOFR versus LIBOR). This
means the CLO could experience an interest rate mismatch between its assets and
liabilities, which could have an adverse impact on the cash flows distributed to
CLO equity investors as well as the Fund’s net investment income and portfolio
returns until such mismatch is corrected or minimized, which would be expected
to occur when both the underlying senior secured loans and the CLO securities
utilize the same rate. At this time, it is not possible to predict the full
effects of the phasing out of LIBOR on U.S. senior secured loans, on CLO debt
securities, and on the underlying assets of the specific CLOs in which the Fund
invests.
Market
Events Risk.
One or more markets in which the Fund invests may go down in value, including
the possibility that the markets will go down sharply and unpredictably. This
may be due to numerous factors, including interest rates, the outlook for
corporate profits, the health of the national and world economies, national and
world social and political events, and the fluctuation of other stock markets
around the world. The global pandemic outbreak of an infectious respiratory
illness caused by a novel coronavirus known as COVID-19 and subsequent efforts
to contain its spread have resulted and may continue to result in, among other
things, substantial market volatility and reduced liquidity in financial
markets; exchange trading suspensions and closures; higher default rates; travel
restrictions and disruptions; significant global disruptions to business
operations and supply chains; lower consumer demand for goods and services;
significant job losses and increasing unemployment; event and service
cancellations and restrictions; significant challenges in healthcare service
preparation and delivery; prolonged quarantines; and general concern and
uncertainty. The impact of this pandemic and any other public health emergencies
(such as any other epidemics or pandemics) that may arise in the
future
could adversely affect the economies of many nations or the entire global
economy and the financial performance of individual issuers, sectors,
industries, asset classes, and markets in significant and unforeseen ways.
Extraordinary actions taken by governments and central banks to support local
and global economies and the financial markets in response to the COVID-19
pandemic may not succeed or have the intended effect, and in some cases, have
resulted in a large expansion of government deficits and debt, the long-term
consequences of which are not known. This crisis or other public health crises
may also exacerbate other pre-existing political, social, economic, market and
financial risks. In addition, the Fund may face challenges with respect to its
day-to-day operations if key personnel of the Adviser or other service providers
are unavailable due to quarantines, restrictions on travel, or other
restrictions imposed by state or federal regulatory authorities. The duration
and future impact of COVID-19 are currently unknown and cannot be determined
with certainty, which may exacerbate the other risks that apply to the Fund and
could adversely affect the value and liquidity of the Fund’s investments, impair
the Fund’s ability to satisfy AP transaction requests, and negatively affect the
Fund’s performance.
Privately
Issued Securities Risk.
CLO
securities are generally privately-issued securities, and are normally purchased
pursuant to Rule 144A or Regulation S under the Securities Act of 1933, as
amended (the “Securities Act”). Privately-issued securities typically may be
resold only to qualified institutional buyers, in a privately negotiated
transaction, to a limited number of purchasers, or in limited quantities after
they have been held for a specified period of time and other conditions are met
for an exemption from registration. Because there may be relatively few
potential purchasers for such securities, especially under adverse market or
economic conditions or in the event of adverse changes in the financial
condition of the issuer, the Fund may find markets for these securities are more
thinly traded. At times, it also may be more difficult to determine the fair
value of such securities for purposes of computing the Fund’s net asset value
per share (“NAV”) due to the absence of an active trading market. There can be
no assurance that a privately-issued security previously deemed to be liquid
when purchased will continue to be liquid for as long as it is held by the Fund,
and its value may decline as a result.
Management
Risk.
The Fund’s principal investment strategies involve actively trading securities,
which could result in a high portfolio turnover rate, which could increase
transaction costs (thus lowering performance) and taxable distributions. The
portfolio turnover rate of the Fund may vary from year to year.
High
Portfolio Turnover Risk. High
portfolio turnover may result in higher transaction costs and potential for
taxable capital gains, both of which could have a negative effect on the Fund’s
performance.
Non-diversified
Fund Risk. The
Fund is classified as a “non-diversified” fund under the 1940 Act. Therefore,
the Fund may invest a relatively high percentage of its assets in a smaller
number of issuers or may invest a larger proportion of its assets in a single
issuer. Moreover, the gains and losses on a single investment may have a greater
impact on the Fund’s NAV and may make the Fund more volatile than more
diversified funds.
Portfolio
Holdings
Information
about the Fund’s daily portfolio holdings is available at www.clozfund.com. A
complete 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”).
Investment
Adviser
The
Fund has entered into an investment advisory agreement (“Advisory Agreement”)
with Panagram Structured Asset Management, LLC, located at 65 East 55th St, 29th
Floor, New York, New York 10022. Panagram is an SEC-registered investment
adviser specializing in CLOs, Asset Backed Securities, and Commercial Real
Estate. As of September 30, 2022, the Adviser had approximately $11.8 billion in
assets under management. Panagram is a subsidiary of Eldridge Industries, LLC
(“Eldridge”), a diversified holding company.
Subject
to the oversight of the Board, the Adviser is responsible for the day-to-day
management of the Fund in accordance with the Fund’s investment objective and
policies. For the services provided to the Fund by the Adviser, the Fund pays
the Adviser a unified management fee, which is calculated daily and paid
monthly, at an annual rate of 0.50% of the Fund’s average daily net assets.
Under the Advisory Agreement, the Adviser has agreed to pay all expenses
incurred by the Fund except for interest charges on any borrowings, dividends
and other expenses on securities sold short; taxes; brokerage commissions and
other expenses incurred in placing orders for the purchase and sale of
securities and other investment instruments; acquired fund fees and expenses;
accrued deferred tax liability; extraordinary expenses; distribution fees and
expenses paid by the Fund under any distribution plan adopted pursuant to Rule
12b-1 under the 1940 Act, and the unified management fee payable to the Adviser
(collectively, the “Excluded Expenses”).
A
discussion regarding the basis for the Board’s initial approval of the Advisory
Agreement between the Adviser and the Trust will be available in the Fund’s
first semi-annual report to shareholders after the Fund’s commencement of
operations.
The
Fund, as a series of the Trust, does not hold itself out as related to any other
series of the Trust for purposes of investment and investor services, nor does
it share the same investment adviser with any other series of the
Trust.
Portfolio
Managers
Mr.
John Kim and Mr. Tim Wickstrom are the portfolio managers of the Fund and
responsible for the day-to-day management of the Fund. Each portfolio manager is
a CLO industry specialist who has been involved in the CLO market for the
majority of his career and has built relationships with key market participants,
including CLO collateral managers, investment banks, and investors.
John
Kim, Chief Executive Officer and Chief Investment Officer of the
Adviser
Mr.
Kim is the CEO and CIO of Panagram after running the structured products group
of Eldridge from 2014 to 2021. Prior to joining Eldridge, Mr. Kim was a Managing
Director at Natixis from 2012 to 2014, where he focused on structured financings
for a variety of asset managers and hedge funds. Previously, Mr. Kim was head of
CLO structuring at Deutsche Bank. Mr. Kim holds an M.B.A. from New York
University’s Stern School of Business and a B.A. from Yale.
Timothy
Wickstrom, Executive Director of the Adviser
Mr.
Wickstrom is an Executive Director at Panagram and manages CLO and ABS secondary
investments. Previously, Mr. Wickstrom was a Director at Eldridge in the
structured products group from 2016 to 2021. Prior to Eldridge, Mr. Wickstrom
was an Associate on Security Benefit’s investment team from 2014 to 2015. Mr.
Wickstrom received his A.B. in Economics from Bowdoin College.
The
Fund’s SAI provides additional information about the portfolio manager’s
compensation, other accounts managed by the portfolio manager and the portfolio
manager’s ownership of Fund shares.
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How
to Buy and Sell Shares |
The
Fund issues and redeems its shares only in Creation Units at the NAV per share
next determined after receipt of an order from an AP. Only APs may acquire the
Fund’s shares directly from the Fund, and only APs may tender their shares for
redemption directly to the Fund, at NAV. APs must be a member or participant of
a clearing agency registered with the SEC and must execute an authorized
participant agreement (“Participant Agreement”) that has been agreed to by the
Distributor (defined below), and that has been accepted by the Fund’s transfer
agent, with respect to purchases and redemptions of Creation Units. Once
created, the Fund’s shares trade in the secondary market in quantities less than
a Creation Unit.
Most
investors buy and sell the Fund’s shares in secondary market transactions
through brokers. Individual shares of the Fund are listed for trading on the
secondary market on the Exchange and can be bought and sold throughout the
trading day like other publicly traded securities.
When
buying or selling the Fund’s shares through a broker, you will pay or receive
the market price. You may incur customary brokerage commissions and charges, and
you may pay some or all of the spread between the bid and the offered price in
the secondary market on each leg of a round trip (purchase and sale)
transaction. In addition, because secondary market transactions occur at market
prices, you may pay more than NAV when you buy the Fund’s shares, and receive
less than NAV when you sell those shares.
Book
Entry
Shares
are held in book-entry form, which means that no stock certificates are issued.
Depository Trust Company (“DTC”) or its nominee is the record owner of all
outstanding shares of the Fund.
Investors
owning Shares are beneficial owners as shown on the records of DTC or its
participants. DTC serves as the securities depository for all Shares. DTC’s
participants 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
upon the procedures of DTC and its participants. These procedures are the same
as those that apply to any other securities that you hold in book-entry or
“street name” through your brokerage account.
Investing
in the Fund
For
more information on how to buy and sell shares of the Fund, visit the Fund’s
website at www.clozfund.com or by calling the Fund toll-free at
800-617-0004.
Frequent
Purchases and Redemptions of Shares
Shares
of the Fund are listed for trading on the Exchange, which allows retail
investors to purchase and sell individual shares at market prices throughout the
trading day similar to other publicly traded securities. Because these secondary
market trades do not involve the Fund directly, it is unlikely that secondary
market trading would cause any harmful effects of market timing, such as
dilution, disruption of portfolio management, increases in the Fund’s trading
costs or realization of capital gains. The Board has determined not to adopt
policies and procedures designed to prevent or monitor for frequent purchases
and redemptions of the Fund’s shares because the Fund sells and redeems its
shares at NAV only in Creation Units pursuant to the terms of a Participant
Agreement between the Distributor and an AP. The Fund may impose transaction
fees on such Creation Unit transactions that are designed to offset the Fund’s
transfer and other transaction costs associated with the issuance and redemption
of the Creation Unit shares. Direct trading by APs is critical to ensuring that
the Fund’s shares trade at or close to NAV. Although the Fund imposes no
restrictions on the frequency of purchases and redemptions of Creation Units,
the Fund and the Adviser reserve the right to reject or limit purchases at any
time as described in the Fund’s SAI.
Determination
of Net Asset Value
The
Fund’s NAV is calculated as of the scheduled close of regular trading on the New
York Stock Exchange (“NYSE”), generally 4:00 p.m. Eastern time, each day the
NYSE is open for business. The NAV is calculated by dividing the Fund’s net
assets by its shares outstanding.
In
calculating its NAV, the Fund generally values its assets on the basis of market
quotations, last sale prices, or estimates of value furnished by a pricing
service or brokers who make markets in such instruments. In particular, the Fund
generally values equity securities traded on any recognized U.S. or non-U.S.
exchange at the last sale price or official closing price on the exchange or
system on which they are principally traded. If such information is not
available for a security held by
the
Fund or is determined to be unreliable, the security will be valued at fair
value estimates under guidelines established by the Board (as described
below).
Fair
Value Pricing
The
Board has adopted procedures and methodologies to fair value Fund securities
whose market prices are not “readily available” or are deemed to be unreliable,
and the Advisor has been designated by the Board as the valuation designee for
the Fund pursuant to Rule 2a-5 under the 1940 Act. For example, such
circumstances may arise when: (i) a security has been de-listed or has had its
trading halted or suspended; (ii) a security’s primary pricing source is unable
or unwilling to provide a price; (iii) a security’s primary trading market is
closed during regular market hours; or (iv) a security’s value is materially
affected by events occurring after the close of the security’s primary trading
market. Generally, when fair valuing a security, the Adviser will take into
account all reasonably available information that may be relevant to a
particular valuation including, but not limited to, fundamental analytical data
regarding the issuer, information relating to the issuer’s business, recent
trades or offers of the security, general and/or specific market conditions and
the specific facts giving rise to the need to fair value the security. Fair
value determinations are made in good faith and in accordance with the
procedures adopted by the Adviser in its capacity as valuation designee. Due to
the subjective and variable nature of fair value pricing, there can be no
assurance that the Adviser will be able to obtain the fair value assigned to the
security upon the sale of such security.
Investments
by Other Registered Investment Companies
Section
12(d)(1) of the 1940 Act restricts investments by registered investment
companies in the securities of other investment companies, including shares of
the Fund. Registered investment companies are permitted to invest in the Fund
beyond the limits set forth in section 12(d)(1), subject to certain conditions
set forth in Rule 12d1-4 under the 1940 Act, including that such investment
companies enter into an agreement with the Fund.
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Dividends,
Distributions and Their Taxation |
Dividends
and Distributions
The
Fund intends to pay dividends from net investment income monthly and to
distribute all net realized capital gains at least annually. The Fund will
declare and pay capital gain distributions in cash. Your broker is responsible
for distributing the income and capital gain distributions to you.
No
dividend reinvestment service is provided by the Trust. Financial intermediaries
may make the DTC book-entry Dividend Reinvestment Service available for use by
beneficial owners of Fund shares for reinvestment of their dividend
distributions. Beneficial owners should contact their financial intermediary to
determine the availability and costs of the service and the details of
participation therein. Financial intermediaries may require beneficial owners to
adhere to specific procedures and timetables. If this service is available and
used, dividend distributions of both income and net realized capital gains will
be automatically reinvested in additional whole shares of the Fund purchased in
the secondary market.
Taxes
The
following discussion is a summary of some important U.S. federal income tax
considerations generally applicable to investments in the Fund. Your investment
in the Fund may have other tax implications. Please consult your tax advisor
about the tax consequences of an investment in Shares, including the possible
application of foreign, state, and local tax laws.
The
Fund intends to elect and qualify each year for treatment as a regulated
investment company (“RIC”) under the Code. If it meets certain minimum
distribution requirements, a RIC is not subject to tax at the fund level on
income and gains from investments that are timely distributed to shareholders.
However, the Fund’s failure to qualify as a RIC or to meet minimum distribution
requirements would result (if certain relief provisions were not available) in
fund-level taxation and, consequently, a reduction in income available for
distribution to shareholders.
Unless
your investment in Shares is made through a tax-exempt entity or tax-advantaged
account, such as an IRA plan, you need to be aware of the possible tax
consequences when the Fund makes distributions, when you sell your Shares listed
on the Exchange; and when you purchase or redeem Creation Units (APs
only).
Taxes
on Distributions
The
Fund intends to distribute, at least annually, substantially all of its net
investment income and net capital gains. For federal income tax purposes,
distributions of investment income are generally taxable as ordinary income or
qualified dividend income. Taxes on distributions of capital gains (if any) are
determined by how long the Fund owned the investments that generated them,
rather than how long a shareholder has owned his or her Shares. Sales of assets
held by the Fund for more than one year generally result in long-term capital
gains and losses, and sales of assets held by the Fund for one year or less
generally result in short-term capital gains and losses. Distributions of the
Fund’s net capital gains (the excess of net long-term capital gains over net
short-term capital losses) that are reported by the Fund as capital gain
dividends (“Capital Gain Dividends”) will be taxable as long-term capital gains,
which for non-corporate shareholders are subject to tax at reduced rates of up
to 20% (lower rates apply to individuals in lower tax brackets). Distributions
of short-term capital gain will generally be taxable as ordinary income.
Dividends and distributions are generally taxable to you whether you receive
them in cash or reinvest them in additional Shares.
Distributions
reported by the Fund as “qualified dividend income” are generally taxed to
non-corporate shareholders at rates applicable to long-term capital gains,
provided holding period and other requirements are met. “Qualified dividend
income” generally is income derived from dividends paid by U.S. corporations or
certain foreign corporations that are either incorporated in a U.S. possession
or eligible for tax benefits under certain U.S. income tax treaties. In
addition, dividends that the Fund received in respect of stock of certain
foreign corporations may be qualified dividend income if that stock is readily
tradable on an established U.S. securities market.
Shortly
after the close of each calendar year, you will be informed of the amount and
character of any distributions received from the Fund.
U.S.
individuals with income exceeding specified thresholds are subject to a 3.8% tax
on all or a portion of their “net investment income,” which includes interest,
dividends, and certain capital gains (generally including capital gains
distributions and capital gains realized on the sale of Shares). This 3.8% tax
also applies to all or a portion of the undistributed net investment income of
certain shareholders that are estates and trusts.
In
general, your distributions are subject to federal income tax for the year in
which they are paid. Certain distributions paid in January, however, may be
treated as paid on December 31 of the prior year. Distributions are generally
taxable even if they are paid from income or gains earned by the Fund before
your investment (and thus were included in the Shares’ NAV when you purchased
your Shares).
You
may wish to avoid investing in the Fund shortly before a dividend or other
distribution, because such a distribution will generally be taxable even though
it may economically represent a return of a portion of your investment. If the
Fund’s distributions exceed its earnings and profits, all or a portion of the
distributions made for a taxable year may be recharacterized as a return of
capital to shareholders. A return of capital distribution will generally not be
taxable, but will reduce each shareholder’s cost basis in Shares and result in a
higher capital gain or lower capital loss when the Shares are
sold.
After a shareholder’s basis in Shares has been reduced to zero, distributions in
excess of earnings and profits in respect of those Shares will be treated as
gain from the sale of the Shares.
If
you are neither a resident nor a citizen of the United States or if you are a
foreign entity, distributions (other than Capital Gain Dividends) paid to you by
the Fund will generally be subject to a U.S. withholding tax at the rate of 30%,
unless a lower treaty rate applies. Gains from the sale or other disposition of
your Shares generally are not subject to U.S. taxation, unless you are a
nonresident alien individual who is physically present in the U.S. for 183 days
or more per year. The Fund may, under certain circumstances, report all or a
portion of a dividend as an “interest-related dividend” or a “short-term capital
gain dividend,” which would generally be exempt from this 30% U.S. withholding
tax, provided certain other requirements are met. Different tax consequences may
result if you are a foreign shareholder engaged in a trade or business within
the United States or if a tax treaty applies.
Under
legislation generally known as “FATCA” (the Foreign Account Tax Compliance Act),
the Fund is required to withhold 30% of certain ordinary dividends it pays to
shareholders that are foreign entities and that fail to meet prescribed
information reporting or certification requirements.
The
Fund (or a financial intermediary, such as a broker, through which a shareholder
owns Shares) generally is required to withhold and remit to the U.S. Treasury a
percentage of the taxable distributions and sale or redemption proceeds paid to
any shareholder who fails to properly furnish a correct taxpayer identification
number, who has underreported dividend or interest income, or who fails to
certify that he, she or it is not subject to such withholding.
Taxes
When Shares are Sold on the Exchange
An
AP having the U.S. dollar as its functional currency for U.S. federal income tax
purposes who exchanges securities for Creation Units generally recognizes a gain
or a loss. The gain or loss will be equal to the difference between the value of
the Creation Units at the time of the exchange and the exchanging AP’s aggregate
basis in the securities delivered, plus the amount of any cash paid for the
Creation Units. An AP who exchanges Creation Units for securities will generally
recognize a gain or loss equal to the difference between the exchanging AP’s
basis in the Creation Units and the aggregate U.S. dollar market value of the
securities received, plus any cash received for such Creation Units. The
Internal Revenue Service may assert, however, that a loss that is realized upon
an exchange of securities for Creation Units may not be currently deducted under
the rules governing “wash sales” (for an AP who does not mark-to-market its
holdings), or on the basis that there has been no significant change in economic
position. APs exchanging securities should consult their own tax advisor with
respect to whether wash sale rules apply and when a loss might be
deductible.
Any
capital gain or loss realized upon redemption of Creation Units is generally
treated as long-term capital gain or loss if Shares have been held for more than
one year and as a short-term capital gain or loss if Shares have been held for
one year or less.
The
Fund may include a payment of cash in addition to, or in place of, the delivery
of a basket of securities upon the redemption of Creation Units. The Fund may
sell portfolio securities to obtain the cash needed to distribute redemption
proceeds. This may cause the Fund to recognize investment income and/or capital
gains or losses that it might not have recognized if it had completely satisfied
the redemption in-kind. As a result, the Fund may be less tax efficient if it
includes such a cash payment in the proceeds paid upon the redemption of
Creation Units.
Taxes
on Purchases and Redemptions of Creation Units
An
AP having the U.S. dollar as its functional currency for U.S. federal income tax
purposes who exchanges securities for Creation Units generally recognizes a gain
or a loss. The gain or loss will be equal to the difference between the value of
the Creation Units at the time of the exchange and the exchanging AP’s aggregate
basis in the securities delivered, plus the amount of any cash paid for the
Creation Units. An AP who exchanges Creation Units for securities will generally
recognize a gain or loss equal to the difference between the exchanging AP’s
basis in the Creation Units and the aggregate
U.S.
dollar market value of the securities received, plus any cash received for such
Creation Units. The Internal Revenue Service may assert, however, that a loss
that is realized upon an exchange of securities for Creation Units may not be
currently deducted under the rules governing “wash sales” (for an AP who does
not mark-to-market its holdings), or on the basis that there has been no
significant change in economic position. APs exchanging securities should
consult their own tax advisor with respect to whether wash sale rules apply and
when a loss might be deductible.
Any
capital gain or loss realized upon redemption of Creation Units is generally
treated as long-term capital gain or loss if Shares have been held for more than
one year and as a short-term capital gain or loss if Shares have been held for
one year or less.
The
Fund may include a payment of cash in addition to, or in place of, the delivery
of a basket of securities upon the redemption of Creation Units. The Fund may
sell portfolio securities to obtain the cash needed to distribute redemption
proceeds. This may cause the Fund to recognize investment income and/or capital
gains or losses that it might not have recognized if it had completely satisfied
the redemption in-kind. As a result, the Fund may be less tax efficient if it
includes such a cash payment in the proceeds paid upon the redemption of
Creation Units.
Foreign
Taxes
To
the extent the Fund invests in foreign securities, it may be subject to foreign
withholding taxes with respect to dividends or interest the Fund received from
sources in foreign countries.
The
foregoing discussion summarizes some of the possible consequences under current
federal tax law of an investment in the Fund. It is not a substitute for
personal tax advice. You also may be subject to state and local tax on Fund
distributions and sales of Fund shares. Consult your personal tax adviser about
the potential tax consequences of an investment in Fund shares under all
applicable tax laws. For more information, please see the section entitled “Tax
Information” in the SAI.
The
Distributor, Quasar Distributors, LLC, is a broker-dealer registered with the
SEC. The Distributor distributes Creation Units for the Fund on an agency basis
and does not maintain a secondary market in the Fund’s shares. The Distributor
has no role in determining the policies of the Fund or the securities that are
purchased or sold by the Fund. The Distributor’s principal address is 111 East
Kilbourn Avenue, Suite 2200, Milwaukee, Wisconsin 53202.
Rule
12b-1 Distribution Fees
The
Trust has adopted a Rule 12b-1 distribution plan (the “Rule 12b-1 Plan”) under
the 1940 Act. Under the terms of the Rule 12b-1 Plan, the Fund is authorized to
pay an aggregate fee equal up to 0.25% of its average daily net assets each year
for certain distribution related activities and shareholder
services.
No
Rule 12b-1 fees are currently paid by the Fund, and there are no plans to impose
these fees. However, in the event Rule 12b-1 fees are charged in the future,
because the fees are paid out of Fund assets, over time these fees will increase
the cost of your investment and may cost you more than certain other types of
sales charges.
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Premium/Discount
Information |
Each
business day, the following information will be available, free of charge, on
the Fund’s website at www.clozfund.com: (i) information for each portfolio
holding that will form the basis of the next calculation of the Fund’s
NAV
per share; (ii) the Fund’s NAV per share, market price, and premium or discount,
each as of the end of the prior business day; (iii) a table showing the number
of days the Fund’s shares traded at a premium or discount during the most
recently completed calendar year and the most recently completed calendar
quarter since that year; (iv) a line graph showing Fund share premiums or
discounts for the most recently completed calendar year and the most recently
completed calendar quarter since that year; (v) the Fund’s median bid-ask spread
over the last thirty calendar days; and (vi) if during the past year the Fund’s
premium or discount was greater than 2% for more than seven consecutive trading
days, a statement that the Fund’s premium or discount, as applicable, was
greater than 2% and a discussion of the factors that are reasonably believed to
have materially contributed to the premium or discount.
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, prices, or quantities of shares of the Fund to be issued, nor in
the determination or calculation of the equation by which shares of the Fund are
redeemable. The Exchange has no obligation or liability to owners of shares of
the Fund in connection with the administration, marketing, or trading of the
shares.
Without
limiting any of the foregoing, in no event shall the Exchange have any liability
for any lost profits or indirect, punitive, special, or consequential damages
even if notified of the possibility thereof.
The
Adviser and the Fund make no representation or warranty, express or implied, to
the owners of shares of the Fund or any member of the public regarding the
advisability of investing in securities generally or in the Fund
particularly.
The
Trust enters into contractual arrangements with various parties, including,
among others, the Fund’s investment adviser, administrator and distributor, who
provide services to the Fund. Shareholders of the Fund are not parties to, or
intended (or “third-party”) beneficiaries of, any of those contractual
arrangements, and those contractual arrangements are not intended to create in
any individual shareholder or group of shareholders any right to enforce such
contractual arrangements against the service providers or to seek any remedy
under such contractual arrangements against the service providers, either
directly or on behalf of the Trust.
This
prospectus provides information concerning the Trust and the Fund that you
should consider in determining whether to purchase shares of the Fund. None of
this prospectus, the SAI or any document filed as an exhibit to the Trust’s
registration statement, is intended to, nor does it, give rise to an agreement
or contract between the Trust or the Fund and any investor, or give rise to any
contract or other rights in any individual shareholder, group of shareholders or
other person other than any rights conferred explicitly by federal or state
securities laws that may not be waived.
The
Fund reserves the right to cease operations and liquidate at any time.
Because
the Fund has recently commenced operations, there are no financial highlights
available at this time.
INVESTMENT
ADVISER:
Panagram
Structured Asset Management, LLC
65
East 55th St, 29th Floor
New
York, NY 10022
DISTRIBUTOR:
Quasar
Distributors, LLC
111
East Kilbourn Avenue, Suite 2200
Milwaukee,
Wisconsin 53202
CUSTODIAN:
U.S.
Bank N.A.
1555
North Rivercenter Drive, Suite 302
Milwaukee,
Wisconsin 53212
ADMINISTRATOR,
FUND ACCOUNTANT
AND TRANSFER AGENT:
U.S.
Bancorp Fund Services, LLC
615
East Michigan Street
Milwaukee,
Wisconsin 53202
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM:
Cohen
& Company, Ltd.
342
N. Water Street, Suite 830
Milwaukee,
Wisconsin 53202
LEGAL
COUNSEL:
Goodwin
Procter LLP
1900
N Street, NW
Washington,
DC 20036
The
Fund collects non-public information about you that the law allows or requires
it to have in order to conduct its business and properly service you. The Fund
collects financial and personal information about you (“Personal Information”)
directly (e.g.,
information on account applications and other forms, such as your name, address,
and social security number, and information provided to access account
information or conduct account transactions online, such as password, account
number, e-mail address, and alternate telephone number), and indirectly
(e.g.,
information about your transactions with us, such as transaction amounts,
account balance and account holdings).
The
Fund does not disclose any non-public personal information about its
shareholders or former shareholders other than for everyday business purposes
such as to process a transaction, service an account, respond to court orders
and legal investigations or as otherwise permitted by law. Third parties that
may receive this information include companies that provide transfer agency,
technology and administrative services to the Fund, as well as the Fund’s
investment adviser who is an affiliate of the Fund. If you maintain a
retirement/educational custodial account directly with the Fund, we may also
disclose your Personal Information to the custodian for that account for
shareholder servicing purposes. The Fund limits access to your Personal
Information provided to unaffiliated third parties to information necessary to
carry out their assigned responsibilities to the Fund. All shareholder records
will be disposed of in accordance with applicable law. The Fund maintains
physical, electronic and procedural safeguards to protect your Personal
Information and requires its third party service providers with access to such
information to treat your Personal Information with the same high degree of
confidentiality.
In
the event that you hold shares of the Fund through a financial intermediary,
including, but not limited to, a broker-dealer, bank, or trust company, the
privacy policy of your financial intermediary would govern how your non-public
personal information would be shared with unaffiliated third
parties.
Panagram
BBB-B CLO ETF
A
series of Series Portfolios Trust
FOR
MORE INFORMATION
You
can find more information about the Fund in the following
documents:
Statement
of Additional Information
The
SAI provides additional details about the investments and techniques of the Fund
and certain other additional information. A current SAI is on file with the SEC
and is incorporated into this Prospectus by reference. This means that the SAI
is legally considered a part of this Prospectus even though it is not physically
within this Prospectus.
Annual
and Semi-Annual Reports
The
Fund’s annual and semi-annual reports (collectively, the “Shareholder Reports”),
when available, will provide the most recent financial reports and portfolio
holdings. The annual report, when available, will contain a discussion of the
market conditions and investment strategies that affected the Fund’s performance
during the Fund’s prior fiscal period.
The
SAI and the Shareholder Reports, when available, are available free of charge on
the Fund’s website at www.clozfund.com. You can obtain a free copy of the SAI
and Shareholder Reports, request other information, or make general inquiries
about the Fund by calling the Fund (toll-free) at 800-617-0004 or by writing
to:
Panagram
BBB-B CLO ETF
c/o
U.S. Bank Global Fund Services
P.O.
Box 701
Milwaukee,
Wisconsin 53201-0701
800-617-0004
Reports
and other information about the Fund are also available:
•Free
of charge from the SEC’s EDGAR database on the SEC’s Internet website at
http://www.sec.gov; or
•For
a fee, by electronic request at the following e-mail address:
[email protected].
(The
Trust’s SEC Investment Company Act of 1940 file number is
811-23084)