Subversive
Metaverse ETF
Ticker
Symbol: PUNK
Annual
Report
September
30, 2022
SUBVERSIVE
METAVERSE ETF
Fund
Performance
For the YTD period between the
Fund’s launch date, January 26th, 2022, and September 30, 2022, the Subversive
Metaverse Fund (“the Fund”) returned -30.59% on market prices and -30.81% on NAV
prices while the Nasdaq 100 returned -22.12%
Performance
Discussion
We remain short Meta
(“Facebook”) since the Fund inception on our belief that the management team
that is in place at Facebook is making the fundamental wrong bets in the space.
We believe CEO of Meta is willing to spend his way into catastrophic losses and
appears to be married to his cartoonish imagination of what the Metaverse is. We
fundamentally disagree.
Since our last shareholder
letter, we have reduced the absolute number of fund holdings with a focus on
what we believe to be higher quality earnings that will perform better in a
slowing economy. We also believe Biden’s signature on the CHIPS and Science ACT
on August 9, 2022, is the start of a revolution in domestic chip manufacturing,
and the “near shoring” of component production by top tech producers away from
reliance on China supply chains.
No one really knows what the
next iteration of the internet is going to look like, but we believe owning the
component parts (the chip sector), best in class consumer facing producers
(Apple, Nintendo, Google), while paying close attention to what is coming next
in machine learning and artificial intelligence; all while being short Facebook,
is the best way to navigate these volatile markets.
Looking
forward
In our March 2022 letter, we
referred to the “shocking” amounts of volatility that lied ahead. We have
certainly seen that. From the collapse of the pound to zero-covid policies in
China, to the dramatic sell-off in equity prices, that has certainly been
realized.
However, we believe the Federal
Reserve is committed to breaking inflation and that means rates higher for
longer than the market is currently pricing. The prudent way to navigate this
environment is to keep cash on hand, add to high quality earnings when we can,
and take profits when we can. In short, active management.
Christian H. Cooper, CFA FRM
SUBVERSIVE
METAVERSE ETF
The views
in this letter were as of September 30, 2022, and may not necessarily reflect
the same views on the date this letter is first published or any time
thereafter. These views are intended to help shareholders in understanding the
fund’s investment methodology and do not constitute investment advice.
This
material must be preceded or accompanied by a prospectus.
Past
performance is not indicative of future results.
Metaverse Companies Risk include, but are not
limited to, small or limited markets for such securities, changes in business
cycles, world economic growth, technological progress, rapid obsolescence, and
government regulation. Securities of Metaverse Companies, especially smaller,
start-up companies, tend to be more volatile than securities of companies that
do not rely heavily on technology. Rapid change to technologies that affect a
company’s products could have a material adverse effect on such company’s
operating results. Metaverse Companies may rely on a combination of patents,
copyrights, trademarks and trade secret laws to establish and protect their
proprietary rights in their products and technologies. There can be no assurance
that the steps taken by these companies to protect their proprietary rights will
be adequate to prevent the misappropriation of their technology or that
competitors will not independently develop technologies that are substantially
equivalent or superior to such companies’ technology.
Distributor: Quasar
Distributor, LLC.
SUBVERSIVE
METAVERSE ETF
Value
of $10,000 Investment (Unaudited)
The chart
assumes an initial investment of $10,000. Performance reflects waivers of fees
and operating expenses in effect. In the absence of such waivers, total return
would be reduced. Past performance is not predictive of future performance.
Investment return and principal value will fluctuate, so that your shares, when
redeemed, may be worth more or less than their original cost. Performance
assumes the reinvestment of capital gains and income distributions. The
performance does not reflect the deduction of taxes that a shareholder would pay
on Fund distributions or the redemption of Fund shares.
Annualized
Rates of Return (%) – As of September 30, 2022
|
Since
Inception (1)
|
Subversive Metaverse ETF
Fund – NAV |
-30.81%
|
Subversive Metaverse ETF
Fund – Market |
-30.59%
|
Nasdaq 100 Total Return
Index |
-22.12%
|
(1)
|
Commencement date of the
Fund was January 26, 2022. |
(2)
|
The Nasdaq 100 Total
Return Index is one of the world’s preeminent large-cap growth indexes.
The companies in the Nasdaq 100 Total Return Index include 100 plus of the
largest domestic and international non-financial companies listed on the
Nasdaq Stock Market based on market capitalization.
|
SUBVERSIVE
METAVERSE ETF
Expense
Example (Unaudited)
September
30, 2022
As a shareholder of the Fund,
you incur two types of costs: (1) transaction costs, including broker
commissions on the purchases and sales of Fund shares, and (2) ongoing costs,
including management fees and other Fund specific expenses. The expense example
is intended to help the shareholder understand ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of
investing in other mutual funds. The example is based on an investment of $1,000
invested at the beginning of the period and held for the most recent period.
The Actual Expenses comparison
provides information about actual account values and actual expenses. A
shareholder may use the information in this line, together with the amount
invested, to estimate the expenses paid over the period. A shareholder may
divide his/her account value by $1,000 (e.g., an $8,600 account value divided by
$1,000 = 8.6), then multiply the result by the number in the first line under
the heading entitled “Expenses Paid During Period” to estimate the expenses paid
on his/her account during this period.
The Hypothetical Example for
Comparison Purposes provides information about hypothetical account values and
hypothetical expenses based on each Fund’s actual expense ratio and an assumed
rate of return of 5% per year before expenses, which is not the Fund’s actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses paid for the period. A shareholder
may use this information to compare the ongoing costs of investing in the Fund
and other funds. To do so, a shareholder would compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of other funds.
The expenses shown in the table
are meant to highlight your ongoing costs only and do not reflect any
transactional costs, such as brokerage commissions paid on purchases and sales
of Fund shares. Therefore, the Hypothetical Example for Comparisons Purposes is
useful in comparing ongoing costs only and will not help to determine the
relevant total costs of owning different funds. In addition, if these
transactional costs were included, shareholder costs would have been higher.
|
|
|
|
Expenses
Paid |
|
Annualized
Net |
Beginning
|
Ending
|
During
Period (1)
|
|
Expense
Ratio |
Account
Value |
Account
Value |
(4/1/2022
to |
Subversive Metaverse ETF
|
(9/30/2022)
|
(4/1/2022)
|
(9/30/2022)
|
9/30/2022)
|
Actual (2)
|
0.75%
|
$1,000.00
|
$
691.90 |
$3.18
|
Hypothetical |
0.75%
|
$1,000.00
|
$1,021.31
|
$3.80
|
(1)
|
Expenses are equal to the
Fund’s annualized expense ratio for the period multiplied by the average
account value over the period, multiplied by 183/365 to reflect the six
month period ended September 30, 2022. |
(2)
|
Based on the actual NAV
returns for the 6 month period ended September 30, 2022 of -32.18%.
|
SUBVERSIVE
METAVERSE ETF
Allocation
of Portfolio (1)
(% of Investments) (Unaudited)
September
30, 2022
Top
10 Equity Holdings (1)(2)
(% of Investments) (Unaudited)
September
30, 2022
|
Alphabet, Inc. – Class C
|
|
|
5.07 |
% |
|
ProShares Short
Russell2000 ETF |
|
|
5.02 |
% |
|
Invesco DB US Dollar
Index Bullish Fund ETF |
|
|
5.01 |
% |
|
ProShares UltraShort FTSE
Europe ETF |
|
|
4.80 |
% |
|
Microsoft Corporation
|
|
|
4.06 |
% |
|
Agilent Technologies,
Inc. |
|
|
3.98 |
% |
|
Apple, Inc. |
|
|
3.81 |
% |
|
Micron Technology, Inc.
|
|
|
3.23 |
% |
|
ROBLOX Corporation –
Class A |
|
|
3.20 |
% |
|
International Business
Machines Corporation |
|
|
3.05 |
% |
(1)
|
Data expressed as a
percentage of investments as of September 30, 2022. Data expressed
excludes securities sold short. Please refer to the Schedule of
Investments for more details on the Fund’s individual holdings and sector
allocations. Fund holdings and sector allocations are subject to change at
any time and are not recommendations to buy or sell any security.
|
(2)
|
Data expressed excludes
short-term investments, such as money market funds. Please refer to the
Schedule of Investments for more details on the Fund’s individual
holdings. |
SUBVERSIVE
METAVERSE ETF
Schedule
of Investments
September
30, 2022
|
|
Shares
|
|
|
Value
|
|
COMMON STOCKS – 82.97%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Communications Equipment –
0.71% |
|
|
|
|
|
|
Cisco Systems, Inc. |
|
|
153 |
|
|
$ |
6,120 |
|
|
|
|
|
|
|
|
|
|
Entertainment – 15.20%
|
|
|
|
|
|
|
|
|
Activision Blizzard, Inc. |
|
|
312 |
|
|
|
23,194 |
|
Electronic Arts, Inc. |
|
|
64 |
|
|
|
7,405 |
|
Nintendo Co. Ltd. – ADR |
|
|
500 |
|
|
|
25,485 |
|
ROBLOX Corporation – Class A (a) |
|
|
752 |
|
|
|
26,952 |
|
Take-Two Interactive Software, Inc. (a)
|
|
|
214 |
|
|
|
23,326 |
|
The Walt Disney Company (a) |
|
|
266 |
|
|
|
25,092 |
|
|
|
|
|
|
|
|
131,454 |
|
|
|
|
|
|
|
|
|
|
Health Care Technology –
1.22% |
|
|
|
|
|
|
|
|
American Well Corporation – Class A (a)
|
|
|
2,930 |
|
|
|
10,519 |
|
|
|
|
|
|
|
|
|
|
Household Durables – 4.95%
|
|
|
|
|
|
|
|
|
Sony Group Corporation – ADR |
|
|
398 |
|
|
|
25,492 |
|
Vuzix Corporation (a) |
|
|
2,996 |
|
|
|
17,347 |
|
|
|
|
|
|
|
|
42,839 |
|
|
|
|
|
|
|
|
|
|
Interactive Media &
Services – 4.94% |
|
|
|
|
|
|
|
|
Alphabet, Inc. – Class C (a)(b) |
|
|
444 |
|
|
|
42,691 |
|
|
|
|
|
|
|
|
|
|
Internet & Direct
Marketing Retail – 2.61% |
|
|
|
|
|
|
|
|
Amazon.com, Inc. (a) |
|
|
200 |
|
|
|
22,600 |
|
|
|
|
|
|
|
|
|
|
IT Services – 8.95%
|
|
|
|
|
|
|
|
|
Akamai Technologies, Inc. (a) |
|
|
166 |
|
|
|
13,333 |
|
Block, Inc. (a) |
|
|
326 |
|
|
|
17,927 |
|
Cloudflare, Inc. – Class A (a) |
|
|
370 |
|
|
|
20,464 |
|
International Business Machines Corporation
|
|
|
216 |
|
|
|
25,663 |
|
|
|
|
|
|
|
|
77,387 |
|
|
|
|
|
|
|
|
|
|
Leisure Products – 2.79%
|
|
|
|
|
|
|
|
|
Mattel, Inc. (a) |
|
|
1,276 |
|
|
|
24,167 |
|
|
|
|
|
|
|
|
|
|
Life Sciences Tools &
Services – 3.88% |
|
|
|
|
|
|
|
|
Agilent Technologies, Inc. |
|
|
276 |
|
|
|
33,548 |
|
|
|
|
|
|
|
|
|
|
Semiconductors &
Semiconductor Equipment – 17.65% |
|
|
|
|
|
|
|
|
Advanced Micro Devices, Inc. (a) |
|
|
222 |
|
|
|
14,066 |
|
Intel Corporation |
|
|
974 |
|
|
|
25,100 |
|
Marvell Technology, Inc. |
|
|
454 |
|
|
|
19,481 |
|
Micron Technology, Inc. |
|
|
544 |
|
|
|
27,254 |
|
NVIDIA Corporation |
|
|
194 |
|
|
|
23,550 |
|
Qorvo, Inc. (a) |
|
|
162 |
|
|
|
12,864 |
|
The accompanying notes are an
integral part of these financial statements.
SUBVERSIVE
METAVERSE ETF
Schedule
of Investments – Continued
September
30, 2022
|
|
Shares
|
|
|
Value
|
|
|
|
|
|
|
|
|
Semiconductors &
Semiconductor Equipment – 17.65% (Continued) |
|
|
|
|
|
|
QUALCOMM, Inc. |
|
|
110 |
|
|
$ |
12,428 |
|
Wolfspeed, Inc. (a) |
|
|
174 |
|
|
|
17,985 |
|
|
|
|
|
|
|
|
152,728 |
|
|
|
|
|
|
|
|
|
|
Software – 13.10% |
|
|
|
|
|
|
|
|
Adobe, Inc. (a) |
|
|
36 |
|
|
|
9,907 |
|
Autodesk, Inc. (a) |
|
|
78 |
|
|
|
14,570 |
|
Crowdstrike Holdings, Inc. – Class A (a)
|
|
|
116 |
|
|
|
19,118 |
|
Dassault Systemes SE – ADR |
|
|
260 |
|
|
|
8,967 |
|
Matterport, Inc. (a) |
|
|
3,630 |
|
|
|
13,758 |
|
Microsoft Corporation (b) |
|
|
147 |
|
|
|
34,236 |
|
Palo Alto Networks, Inc. (a) |
|
|
78 |
|
|
|
12,776 |
|
|
|
|
|
|
|
|
113,332 |
|
|
|
|
|
|
|
|
|
|
Technology Hardware,
Storage & Peripherals – 6.97% |
|
|
|
|
|
|
|
|
Apple, Inc. |
|
|
232 |
|
|
|
32,063 |
|
Corsair Gaming, Inc. (a) |
|
|
1,278 |
|
|
|
14,505 |
|
Immersion Corporation (a) |
|
|
2,492 |
|
|
|
13,681 |
|
|
|
|
|
|
|
|
60,249 |
|
Total Common Stocks
|
|
|
|
|
|
|
|
|
(Cost $961,397)
|
|
|
|
|
|
|
717,634 |
|
|
|
|
|
|
|
|
|
|
EXCHANGE TRADED FUNDS –
14.44% |
|
|
|
|
|
|
|
|
Invesco DB US Dollar Index Bullish Fund ETF
|
|
|
1,399 |
|
|
|
42,180 |
|
ProShares Short Russell2000 ETF (a) |
|
|
1,605 |
|
|
|
42,308 |
|
ProShares UltraShort FTSE Europe ETF |
|
|
2,050 |
|
|
|
40,426 |
|
Total Exchange Traded Funds
|
|
|
|
|
|
|
|
|
(Cost $116,595)
|
|
|
|
|
|
|
124,914 |
|
Total Investments |
|
|
|
|
|
|
|
|
(Cost
$1,077,992) – 97.41% |
|
|
|
|
|
|
842,548 |
|
Other Assets In Excess Of
Liabilities – 2.59% |
|
|
|
|
|
|
22,360 |
|
Net Assets – 100.00%
|
|
|
|
|
|
$ |
864,908 |
|
ADR – American Depositary
Receipt
ETF – Exchange Traded Fund
(a) |
Non-income
producing security. |
(b) |
All or a portion of this
security has been committed as collateral for securities sold short. The
total value of assets committed as collateral as of September 30, 2022 is
$52,344. |
The Global Industry
Classification Standard (GICS ® )
was developed by and/or is the exclusive property of MSCI, Inc. and Standard
& Poor Financial Services LLC (“S&P”). GICS is a service mark of MSCI
and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
The accompanying notes are an
integral part of these financial statements.
SUBVERSIVE
METAVERSE ETF
Schedule
of Securities Sold Short
September
30, 2022
|
|
Shares
|
|
|
Value
|
|
COMMON STOCKS – (4.89)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interactive Media &
Services – (4.89)% |
|
|
|
|
|
|
Meta Platforms, Inc. |
|
|
(312 |
) |
|
$ |
(42,332 |
) |
Total Securities Sold Short
– (4.89)% |
|
|
|
|
|
|
|
|
(Proceeds
$58,455) |
|
|
|
|
|
$ |
(42,332 |
) |
The Global Industry
Classification Standard (GICS ® )
was developed by and/or is the exclusive property of MSCI, Inc. and Standard
& Poor Financial Services LLC (“S&P”). GICS is a service mark of MSCI
and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
The accompanying notes are an
integral part of these financial statements.
SUBVERSIVE
METAVERSE ETF
Statement
of Assets and Liabilities
September
30, 2022
ASSETS: |
|
|
|
Investments, at value (Cost $1,077,992)
|
|
$ |
842,548 |
|
Foreign currency, at value (Cost $4,388)
|
|
|
4,396 |
|
Deposit at brokers for securities sold short
|
|
|
58,455 |
|
Dividends and interest receivable |
|
|
227 |
|
Receivable from Adviser |
|
|
4,631 |
|
Total assets |
|
|
910,257 |
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
Securities sold short, at value (Proceeds of
$58,455) |
|
|
42,332 |
|
Due to Custodian |
|
|
3,017 |
|
Total liabilities |
|
|
45,349 |
|
|
|
|
|
|
NET ASSETS |
|
$ |
864,908 |
|
|
|
|
|
|
NET ASSETS CONSIST OF:
|
|
|
|
|
Paid-in capital |
|
$ |
1,250,000 |
|
Total accumulated loss |
|
|
(385,092 |
) |
Total net assets |
|
$ |
864,908 |
|
|
|
|
|
|
Net assets |
|
$ |
864,908 |
|
Shares issued and outstanding (1)
|
|
|
50,000 |
|
Net asset value |
|
$ |
17.30 |
|
(1)
|
Unlimited shares authorized without par value.
|
The accompanying notes are an
integral part of these financial statements.
SUBVERSIVE
METAVERSE ETF
Statement
of Operations
For the Period Ended September
30, 2022 (1)
INVESTMENT INCOME:
|
|
|
|
Dividend Income (net of foreign withholding
taxes of $110) |
|
$ |
2,866 |
|
Interest income |
|
|
755 |
|
Total investment income |
|
|
3,621 |
|
|
|
|
|
|
EXPENSES: |
|
|
|
|
Investment advisory fees (See Note 3)
|
|
|
5,355 |
|
Total expenses |
|
|
5,355 |
|
NET INVESTMENT LOSS
|
|
|
(1,734 |
) |
|
|
|
|
|
REALIZED AND CHANGE IN
UNREALIZED GAIN (LOSS) ON INVESTMENTS: |
|
|
|
|
Net realized gain (loss) on: |
|
|
|
|
Investments
|
|
|
(164,037 |
) |
Net realized loss |
|
|
(164,037 |
) |
Net change in unrealized appreciation
(depreciation) on: |
|
|
|
|
Investments
|
|
|
(235,444 |
) |
Securities
sold short |
|
|
16,123 |
|
Net change in unrealized depreciation
|
|
|
(219,321 |
) |
Net realized and change in unrealized loss on
investments |
|
|
(383,358 |
) |
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS |
|
$ |
(385,092 |
) |
(1)
|
Commencement date of the Fund was January 26,
2022. |
The accompanying notes are an
integral part of these financial statements.
SUBVERSIVE
METAVERSE ETF
Statement
of Changes in Net Assets
|
|
For
the Period |
|
|
|
Ended
|
|
|
|
September
30, 2022 (1)
|
|
OPERATIONS: |
|
|
|
Net investment loss |
|
$ |
(1,734 |
) |
Net realized loss on investments and
securities sold short |
|
|
(164,037 |
) |
Change in net unrealized depreciation on
investments and securities sold short |
|
|
(219,321 |
) |
Net decrease in net assets resulting from
operations |
|
|
(385,092 |
) |
|
|
|
|
|
CAPITAL SHARE TRANSACTIONS:
|
|
|
|
|
Net increase in net assets resulting from
capital share transactions (2)
|
|
|
1,250,000 |
|
|
|
|
|
|
NET INCREASE IN NET ASSETS
|
|
|
864,908 |
|
|
|
|
|
|
NET ASSETS: |
|
|
|
|
Beginning of period |
|
|
— |
|
End of period |
|
$ |
864,908 |
|
(1)
|
The Fund commenced investment operations on
January 26, 2022. |
(2)
|
A summary of capital share transactions is as
follows: |
|
|
For
the Period Ended |
|
|
|
September
30, 2022 (1)
|
|
SHARE TRANSACTIONS:
|
|
Shares
|
|
|
Amount
|
|
Issued |
|
|
50,000 |
|
|
$ |
1,250,000 |
|
Net increase in shares outstanding |
|
|
50,000 |
|
|
$ |
1,250,000 |
|
The accompanying notes are an
integral part of these financial statements.
SUBVERSIVE
METAVERSE ETF
Financial
Highlights
|
|
For
the Period |
|
|
|
Ended
|
|
|
|
September
30, 2022 (1)
|
|
PER SHARE DATA: (2)
|
|
|
|
Net asset value, beginning of period |
|
$ |
25.00 |
|
|
|
|
|
|
INVESTMENT OPERATIONS: |
|
|
|
|
Net
investment loss (3)
|
|
|
(0.03 |
) |
Net
realized and unrealized loss on investments |
|
|
(7.67 |
) |
Total
from investment operations |
|
|
(7.70 |
) |
|
|
|
|
|
LESS DISTRIBUTIONS: |
|
|
|
|
From
net investment income |
|
|
— |
|
From
net realized gains |
|
|
— |
|
Total
distributions paid |
|
|
— |
|
Net asset value, end of period |
|
$ |
17.30 |
|
|
|
|
|
|
TOTAL RETURN,
AT NAV (4)
|
|
|
(30.81 |
)% (5)
|
TOTAL RETURN,
AT MARKET (4)
|
|
|
(30.59 |
)% (5)
|
|
|
|
|
|
SUPPLEMENTAL
DATA AND RATIOS: |
|
|
|
|
Net assets, end of period (in thousands)
|
|
$ |
865 |
|
|
|
|
|
|
Ratio of expenses to average net assets
|
|
|
0.75 |
% (6)
|
Ratio of net investment loss to average net
assets |
|
|
(0.24 |
)% (6)
|
Portfolio turnover rate (7)(8)
|
|
|
32 |
% (5)
|
(1)
|
The Fund commenced
investment operations on January 26, 2022. |
(2)
|
For a Fund share
outstanding for the entire period. |
(3)
|
Calculated based on
average shares outstanding during the period. |
(4)
|
Total return in the table
represents the rate that the investor would have earned or lost on an
investment in the Fund, assuming reinvestment of distributions.
|
(5)
|
Not annualized for
periods less than one year. |
(6)
|
Annualized for periods
less that one year. |
(7)
|
Excludes in-kind
transactions associated with creations of the Fund. |
(8)
|
The numerator for the
portfolio turnover rate includes the lesser of purchases or sales
(excluding short-term investments and securities sold short). The
denominator includes the average fair value of long positions throughout
the period. |
The accompanying notes are an
integral part of these financial statements.
SUBVERSIVE
METAVERSE ETF
Notes
to the Financial Statements
September
30, 2022
1. ORGANIZATION
Series Portfolios Trust (the
“Trust”) was organized as a Delaware statutory trust under a Declaration of
Trust dated July 27, 2015. The Trust is registered under the Investment Company
Act of 1940, as amended (the “1940 Act”), as an open-end management investment
company. The Subversive Metaverse ETF (the “Fund”) is a non-diversified series
with its own investment objectives and policies within the Trust. The primary
investment objective of the Fund is to seek to achieve long-term capital
appreciation by investing in globally-listed equity securities of companies that
provide services and products that support the infrastructure and applications
of the Metaverse (“Metaverse Companies”). “Metaverse” is a term used to describe
the next generation of the Internet, which has the potential to allow creators
to build the next chapter of human interaction through immersive experiences in
three-dimensional virtual spaces. Under normal market conditions, the Fund will
invest at least 80% of its net assets (plus any borrowings for investment
purposes) in securities of Metaverse Companies. The Fund will invest in
securities of globally-listed companies with a market capitalization, at the
time of investment, of at least $250 million and less than $1 trillion.
The Fund commenced operations
on January 26, 2022. Organizational costs consist of costs incurred to establish
the Fund and enable it to legally do business. These expenses were borne by the
Adviser and are not subject to reimbursement by the Fund. The Fund’s investment
adviser, Subversive Capital Advisor LLC (the “Adviser”) is responsible for
providing management oversight, investment advisory services, day-to-day
management of the Fund’s assets, as well as compliance, sales, marketing, and
operations services to the Fund. The Fund is an investment company and
accordingly follows the investment company accounting and reporting guidance of
the Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification (the “Codification”) Topic 946 Financial Services – Investment
Companies. The Fund 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.
2. SIGNIFICANT ACCOUNTING
POLICIES
The following is a summary of
significant accounting policies consistently followed by the Fund in the
preparation of its financial statements. These policies are in conformity with
generally accepted accounting principles in the United States of America
(“GAAP”).
A.
Investment
Valuation – The following is a summary of the Fund’s pricing procedures.
It is intended to be a general discussion and may not necessarily reflect all
the pricing procedures followed by the Fund. Equity securities, including common
stocks, preferred stocks, and real estate investment trusts (“REITS”) that are
traded on a national securities exchange, except those listed on the Nasdaq
Global Market ® ,
Nasdaq Global Select Market ® and
the Nasdaq Capital Market ®
exchanges (collectively “Nasdaq”), are valued at the last reported sale
price on that exchange on which the security is principally traded. Securities
traded on Nasdaq will be valued at the Nasdaq Official Closing Price (“NOCP”).
If, on a particular day, an exchange traded or Nasdaq security does not trade,
then the mean between the most recent quoted bid and asked prices will be used.
All equity securities that are not traded on a listed exchange are valued at the
last sale price in the over-the-counter market. If a non-exchanged traded equity
security does not trade on a particular day, then the mean between the last
quoted closing bid and asked price will be used. To the extent these securities
are actively traded, and valuation adjustments are not applied, they are
categorized in Level 1 of the fair value hierarchy.
In the case of foreign
securities, the occurrence of events after the close of foreign markets, but
prior to the time the Fund’s NAV is calculated will result in an adjustment to
the trading prices of foreign securities when foreign markets open on the
following business day. The Fund will value foreign securities at fair value,
taking into account such events in calculating the NAV. In such cases, use of
fair valuation can reduce an investor’s ability to seek profit by estimating the
Fund’s NAV in advance of the time the NAV is calculated. These securities are
categorized in Level 2 of the fair value hierarchy.
SUBVERSIVE
METAVERSE ETF
Notes
to the Financial Statements – Continued
September
30, 2022
Investments in registered
open-end investment companies (including money market funds), other than
exchange traded funds, are valued at their reported net asset values (“NAV”). To
the extent these securities are valued at their NAV per share, they are
categorized in Level 1 of the fair value hierarchy.
The Board of Trustees (the
“Board”) has adopted a pricing and valuation policy for use by the Fund and its
Valuation Designee (as defined below) in calculating the Fund’s NAV. Pursuant to
Rule 2a-5 under the 1940 Act, the Fund has designated Subversive Capital Advisor
LLC (the “Adviser”) as its “Valuation Designee” to perform all of the fair value
determinations as well as to perform all of the responsibilities that may be
performed by the Valuation Designee in accordance with Rule 2a-5. The Valuation
Designee is authorized to make all necessary determinations of the fair values
of the portfolio securities and other assets for which market quotations are not
readily available or if it is deemed that the prices obtained from brokers and
dealers or independent pricing services are unreliable.
The Fund has adopted
authoritative fair value accounting standards which establish an authoritative
definition of fair value and set out a hierarchy for measuring fair value. These
standards require additional disclosures about the various inputs and valuation
techniques used to develop the measurements of fair value, a discussion in
changes in valuation techniques and related inputs during the period and
expanded disclosure of valuation levels for major security types. These inputs
are summarized in the three broad levels listed below:
Level 1 – |
Unadjusted quoted prices
in active markets for identical assets or liabilities that the Fund has
the ability to access. |
|
|
Level 2 – |
Observable inputs other
than quoted prices included in Level 1 that are observable for the asset
or liability, either directly or indirectly. These inputs may include
quoted prices for the identical instrument on an inactive market, prices
for similar instruments, interest rates, prepayment speeds, credit risk,
yield curves, default rates and similar data. |
|
|
Level 3 – |
Unobservable inputs for
the asset or liability, to the extent relevant observable inputs are not
available, representing the Fund’s own assumptions about the assumptions a
market participant would use in valuing the asset or liability, and would
be based on the best information available. |
The inputs or methodology used
for valuing securities are not an indication of the risk associated with
investing in those securities.
The following is a summary of
the inputs used to value the Fund’s securities by level within the fair value
hierarchy as of September 30, 2022:
Investments at Fair
Value |
|
Level
1 |
|
|
Level
2 |
|
|
Level
3 |
|
|
Total
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Common Stocks |
|
$ |
717,634 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
717,634 |
|
Exchange Traded Funds |
|
|
124,914 |
|
|
|
— |
|
|
|
— |
|
|
|
124,914 |
|
Total |
|
$ |
842,548 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
842,548 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short Common Stocks |
|
$ |
(42,332 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(42,332 |
) |
Total |
|
$ |
(42,332 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(42,332 |
) |
As of the period ended
September 30, 2022, the Fund did not hold any level 3 securities, nor were there
any transfers into or out of Level 3.
SUBVERSIVE
METAVERSE ETF
Notes
to the Financial Statements – Continued
September
30, 2022
B.
Securities
Sold Short – The Fund sells securities or currencies short for economic
hedging purposes or any other investment purpose. For financial statement
purposes, an amount equal to the settlement amount is initially included in the
Statement of Assets and Liabilities as an asset and an equivalent liability. The
amount of the liability is subsequently priced to reflect the current value of
the short position. Subsequent fluctuations in the market prices of securities
or currencies sold, but not yet purchased, may require purchasing the securities
or currencies at prices which may differ from the fair value reflected on the
Statement of Assets and Liabilities. Short sale transactions result in off
balance sheet risk because the ultimate obligation may exceed the related
amounts shown in the Statement of Assets and Liabilities. The Fund will incur
losses if the price of the security increases between the date of the short sale
and the date on which the Fund purchases the securities to replace the borrowed
securities. The Fund’s losses on short sales are potentially unlimited because
there is no upward limit on the price a borrowed security could attain.
The Fund is liable for any
dividends and interest payable on securities while those securities are sold
short. Until the security is replaced, the Fund is required to pay to the lender
any income earned, which is recorded as an expense by the Fund. The Fund’s
policy is to segregate liquid assets in an amount equal to the fair value of
securities sold short (not including proceeds received), which is reflected in
the Schedule of Investments. These assets are required to be adjusted daily to
reflect changes in the value of the securities or currencies sold short.
C.
Transactions with Brokers – The Fund’s
deposits at brokers for securities sold short are with one securities dealer.
The Fund does not require the brokers to maintain collateral in support of the
receivables from the brokers for proceeds on securities sold short. The Fund is
required by the brokers to maintain collateral at the brokers or in a segregated
account at the Fund’s custodian for securities sold short. The Fund may maintain
cash deposits at brokers beyond the receivables for short sales. The Fund’s
securities sold short cash deposits are monitored daily by the Adviser and
counterparty. Cash deposits by the Fund are presented as deposits at broker for
securities sold short on the Statement of Assets and Liabilities. These
transactions may involve market risk in excess of the assets or liabilities
reflected on the Statement of Assets and Liabilities.
D.
Foreign
Securities and Currency Translation – Investment securities and other
assets and liabilities denominated in foreign currencies are translated into
U.S. dollar amounts at the date of valuation. Purchases and sales of investment
securities and income and expense items denominated in foreign currencies are
translated into U.S. dollar amounts on the respective dates of such
transactions. The Fund does not isolate the portion of the results of operations
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Reported net realized
foreign exchange gains or losses arise from sales of foreign currencies, and the
difference between the amounts of dividends, interest, and foreign withholding
taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains and losses
arise from changes in the fair values of assets and liabilities, other than
investments in securities at fiscal year- end, resulting from changes in
exchange rates.
Investments in foreign
securities entail certain risks. There may be a possibility of nationalization
or expropriation of assets, confiscatory taxation, political or financial
instability, and diplomatic developments that could affect the value of the
Fund’s investments in certain foreign countries. Since foreign securities
normally are denominated and traded in foreign currencies, the value of the
Fund’s assets may be affected favorably or unfavorably by currency exchange
rates, currency exchange control regulations, foreign withholding taxes, and
restrictions or prohibitions on the repatriation of foreign currencies. There
may be less information publicly available about a foreign issuer than about a
U.S. issuer, and foreign issuers are not generally subject to accounting,
auditing, and financial reporting standards and practices comparable to those in
the United States. The securities of some foreign issuers are less liquid and at
times more volatile than securities of comparable U.S. issuers.
SUBVERSIVE
METAVERSE ETF
Notes
to the Financial Statements – Continued
September
30, 2022
E.
Cash and
Cash Equivalents – The Fund considers highly liquid short-term fixed
income investments purchased with an original maturity of less than three months
and money market funds to be cash equivalents. Cash equivalents are included in
short term investments on the Schedule of Investments as well as in investments
on the Statement of Assets and Liabilities. Temporary cash overdrafts are
reported as payable to custodian.
F.
Guarantees
and Indemnifications – In the normal course of business, the Fund enters
into contracts with service providers that contain general indemnification
clauses. The Fund’s maximum exposure under these arrangements is unknown, as
this would involve future claims that may be made against the Fund that have not
yet occurred.
G.
Security
Transactions, Income and Expenses – The Fund follows industry practice
and records security transactions on the trade date. Realized gains and losses
on sales of securities are calculated on the basis of identified cost. Dividend
income is recorded on the ex-dividend date and interest income and expense is
recorded on an accrual basis. Withholding taxes on foreign dividends have been
provided for in accordance with the Fund’s understanding of the applicable
country’s tax rules and regulations. Discounts and premiums on securities
purchased are amortized over the expected life of the respective securities.
Interest income is accounted for on the accrual basis and includes amortization
of premiums and accretion of discounts on the effective interest method.
H.
Share
Valuation – The NAV per share of the Fund is calculated by dividing the
sum of the value of the securities held by the Fund, plus cash or other assets,
minus all liabilities (including estimated accrued expenses) by the total number
of shares outstanding for the Fund, rounded to the nearest cent. The Fund’s
shares will not be priced on days which the Cboe BZX Exchange, Inc. is closed
for trading.
I.
Use of
Estimates – The preparation of financial statements in conformity with
GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of income and expenses during the reporting period. Actual results could differ
from those estimates.
J.
Statement
of Cash Flows – Pursuant to the Cash Flows Topic of the Codification, the
Fund qualifies for an exemption from the requirement to provide a statement of
cash flows and has elected not to provide a statement of cash flows.
3. RELATED PARTY
TRANSACTIONS
The Trust has an agreement with
the Adviser to furnish investment advisory services to the Fund. Pursuant to an
Investment Advisory Agreement between the Trust and the Adviser, the Adviser is
entitled to receive, on a monthly basis, a unified management fee (accrued
daily) based upon the average daily net assets of a Fund at the annual rate of
0.75%.
Under the Investment Advisory
Agreement, the Adviser has agreed to pay all expenses of the Fund except for the
fee paid to the Adviser pursuant to the Investment Advisory Agreement, interest
charges on any borrowings, 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, and distribution fees and expenses paid by
the Trust under any distribution plan adopted pursuant to Rule 12b-1 under the
1940 Act. The receivable from Adviser for $4,631 as of September 30, 2022,
consists of fees payable to the Adviser and trust level expenses paid by the
Fund and will be reimbursed by the Adviser. The net amount is the result of the
timing in the payments of the invoices and the reimbursement from the Adviser,
which was paid shortly after the Fund's fiscal year end.
SUBVERSIVE
METAVERSE ETF
Notes
to the Financial Statements – Continued
September
30, 2022
The Advisory Agreement
continues in effect for an initial two year period, and from year to year
thereafter only if such continuance is specifically approved at least annually
by the Board or by vote of a majority of the Fund’s outstanding voting
securities and by a majority of the Independent Trustees, who are not parties to
the Advisory Agreement or interested persons of any such party, in each case
cast in person at a meeting called for the purpose of voting on the Advisory
Agreement. The Advisory Agreement is terminable without penalty by the Trust on
behalf of a Fund on not more than 60 days’, nor less than 30 days’, written
notice to the Adviser when authorized either by a majority vote of the Fund’s
shareholders or by a vote of a majority of the Trustees, or by the Adviser on
not more than 60 days’ written notice to the Trust, and will automatically
terminate in the event of its “assignment” (as defined in the 1940 Act). The
Advisory Agreement provides that the Adviser shall not be liable under such
agreement for any error of judgment or mistake of law or for any loss arising
out of any investment or for any act or omission in the execution of portfolio
transactions for the Fund, except for willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations and duties thereunder.
U.S. Bancorp Fund Services,
LLC, doing business as U.S. Bank Global Fund Services (“Fund Services” or
“Administrator”) acts as the Fund’s Administrator, transfer agent, and fund
accountant. U.S. Bank N.A. (the “Custodian”) serves as the custodian to the
Fund. The Custodian is an affiliate of the Administrator. The Administrator
performs various administrative and accounting services for the Fund. The
Administrator prepares various federal and state regulatory filings, reports and
returns for the Fund; prepares reports and materials to be supplied to the
Board; monitors the activities of the Fund’s custodian; coordinates the payment
of the Fund’s expenses and reviews the Fund’s expense accruals. The officers of
the Trust, including the Chief Compliance Officer, are employees of the
Administrator. A trustee of the Trust is an officer of the Administrator. As
compensation for its services, the Administrator is entitled to a monthly fee at
an annual rate based upon the average daily net assets of the Fund, subject to
annual minimums. The Advisor has agreed to pay all expenses of the Fund’s
Administrator, transfer agent, fund accountant and custodian in accordance with
the Investment Advisory Agreement.
Quasar Distributors, LLC is the
Fund’s distributor (the “Distributor”). The Distributor is not affiliated with
the Adviser, Fund Services, or its affiliated companies.
4. TAX FOOTNOTE
Federal Income Taxes – The Fund intends to
comply with the requirements of Subchapter M of the Internal Revenue Code of
1986, as amended, necessary to qualify as a regulated investment company and
distributes substantially all net taxable investment income and net realized
gains to shareholders in a manner which results in no tax cost to the Fund.
Therefore, no federal income or excise tax provision is required. As of, and
during the period ended September 30, 2022, the Fund did not have any tax
positions that did not meet the “more-likely-than-not” threshold of being
sustained by the applicable tax authority and did not have liabilities for any
unrecognized tax benefits. The Fund recognizes interest and penalties, if any,
related to unrecognized tax benefits on uncertain tax positions as income tax
expense in the Statement of Operations. The Fund is subject to examination by
taxing authorities for the tax periods since the commencement of operations.
SUBVERSIVE
METAVERSE ETF
Notes
to the Financial Statements – Continued
September
30, 2022
At September 30, 2022, the
components of accumulated earnings (losses) on a tax basis were as follows:
Tax Cost of Investments
|
|
$ |
1,019,537 |
|
Gross unrealized
appreciation |
|
$ |
29,344 |
|
Gross unrealized
depreciation |
|
|
(248,665 |
) |
Net unrealized
appreciation |
|
|
(219,321 |
) |
Undistributed ordinary
income |
|
|
— |
|
Undistributed long-term
capital gains |
|
|
— |
|
Distributable earnings
|
|
|
— |
|
Other accumulated losses
|
|
|
(165,771 |
) |
Total accumulated loss
|
|
$ |
(385,092 |
) |
As of September 30, 2022, the
Fund had $164,095 in short-term capital loss carryovers which will be permitted
to be carried over for an unlimited period. A regulated investment company may
elect for any taxable year to treat any portion of any qualified late year loss
as arising on the first day of the next taxable year. For the taxable period
ended September 30, 2022, the Fund had $1,676 of deferred qualified late year
losses. Qualified late year losses are certain ordinary losses which occur
during the portion of the Fund’s taxable year subsequent to December 31.
Distributions to Shareholders – The Fund
intends to distribute all net investment income and net realized gains at least
annually. Distributions to shareholders are recorded on the ex-dividend date.
The treatment for financial reporting purposes of distributions made to
shareholders during the year from net investment income or net realized capital
gains may differ from their treatment for federal income tax purposes. These
differences are caused primarily by differences in the timing of the recognition
of certain components of income, expense or realized capital gain for federal
income tax purposes. Where such differences are permanent in nature, GAAP
requires that they be reclassified in the components of the net assets based on
their ultimate characterization for federal income tax purposes. Any such
reclassifications will have no effect on net assets, results of operations or
net asset values per share of the Fund.
For the period ended September
30, 2022, the Fund did not make any distributions to shareholders.
5. DISTRIBUTION FEES
The Board has adopted a
Distribution and Service Plan pursuant to Rule 12b-1 under the 1940 Act (“the
Plan”). In accordance with the Plan, the Fund is authorized to pay an amount up
to 0.25% of the Fund’s average daily net assets each year for certain
distribution-related activities. As authorized by the Board, 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, they will be
paid out of the Fund’s assets. The Adviser and its affiliates may, out of their
own resources, pay amounts to third parties for distribution or marketing
services on behalf of the Fund.
SUBVERSIVE
METAVERSE ETF
Notes
to the Financial Statements – Continued
September
30, 2022
6. SHARE TRANSACTIONS
Shares of the Fund are listed
and trade on the Cboe BZX Exchange, Inc. Market prices for the shares may be
different from their NAV. The Fund issues and redeems shares on a continuous
basis at NAV generally in blocks of 25,000 shares called “Creation Units.”
Creation Units are issued and redeemed principally in-kind for securities
included in a specified universe. Once created, shares generally trade in the
secondary market at market prices that change throughout the day. Except when
aggregated in Creation Units, shares are not redeemable securities of the Fund.
Creation Units may only be purchased or redeemed by certain financial
institutions (“Authorized Participants”). An Authorized Participant is either
(i) a broker-dealer or other participant in the clearing process through the
Continuous Net Settlement System of the National Securities Clearing Corporation
or (ii) a Depository Trust Company participant and, in each case, must have
executed a Participant Agreement with the Distributor. Most retail investors do
not qualify as Authorized Participants nor have the resources to buy and sell
whole Creation Units. Therefore, they are unable to purchase or redeem shares
directly from the Fund. Rather, most retail investors may purchase shares in the
secondary market with the assistance of a broker and are subject to customary
brokerage commissions or fees.
A fixed transaction fee is
imposed for the transfer and other transaction costs associated with the
purchase or sale of Creation Units. The standard fixed transaction fee for the
Fund is $500, payable to the Custodian. The fixed transaction fee may be waived
on certain orders if the Fund Custodian has determined to waive some or all of
the creation order costs associated with the order, or another party, such as
the Adviser, has agreed to pay such fee. In addition, a variable fee, payable to
the Fund, may be charged on all cash transactions or substitutes for Creation
Units of up to a maximum of 2% as a percentage of the value of the Creation
Units subject to the transaction. Variable fees received by the Fund, if any,
are displayed in the Capital Shares Transactions section of the Statements of
Changes in Net Assets. The Fund may issue an unlimited number of shares of
beneficial interest, with no par value. All shares of the Fund have equal rights
and privileges.
7. INVESTMENT TRANSACTIONS
The aggregate purchases and
sales (excluding short-term investments and securities sold short), creations
in-kind and redemptions in-kind, by the Fund for the period ended September 30,
2022, were as follows:
|
|
Purchases
|
|
|
Sales
|
|
|
Creations
In-Kind |
|
|
Redemptions
In-Kind |
|
U.S. Government |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Other |
|
$ |
371,688 |
|
|
$ |
311,634 |
|
|
$ |
1,182,034 |
|
|
$ |
— |
|
8. RECENT MARKET EVENTS
RISK
U.S. and international markets
have experienced significant periods of volatility in recent years and months
due to a number of economic, political and global macro factors including the
impact of COVID-19 as a global pandemic, which has resulted in a public health
crisis, disruptions to business operations and supply chains, stress on the
global healthcare system, growth concerns in the U.S. and overseas, staffing
shortages and the inability to meet consumer demand, and widespread concern and
uncertainty. The global recovery from COVID-19 is proceeding at slower than
expected rates due to the emergence of variant strains and may last for an
extended period of time. Continuing uncertainties regarding interest rates,
rising inflation, political events, rising government debt in the U.S. and trade
tensions also contribute to market volatility. As a result of continuing
political tensions and armed conflicts, including the war between Ukraine and
Russia, the U.S. and the European Union imposed sanctions on certain Russian
individuals and companies, including certain financial institutions, and have
limited certain exports and imports to and from Russia. The war has contributed
to recent market volatility and may continue to do so.
SUBVERSIVE
METAVERSE ETF
Notes
to the Financial Statements – Continued
September
30, 2022
9. SUBSEQUENT EVENTS
As of October 7, 2022, Kristen
Pierson no longer serves as an Assistant Treasurer of the Trust. As of October
27, 2022, Hailey Glaser resigned as an Assistant Treasurer of the Trust and
Richard Grange was approved as an Assistant Treasurer of the Trust. These
changes were approved by the Board on October 27, 2022.
Management has evaluated events
and transactions for potential recognition or disclosure through the date the
financial statements were issued and has determined that no additional items
require recognition or disclosure.
SUBVERSIVE
METAVERSE ETF
Report
of Independent Registered Public Accounting Firm
To the Shareholders of
Subversive Metaverse ETF and
Board of Trustees of Series
Portfolios Trust
Opinion on the Financial
Statements
We have audited the
accompanying statement of assets and liabilities, including the schedules of
investments and securities sold short, of Subversive Metaverse ETF (the “Fund”),
a series of Series Portfolios Trust, as of September 30, 2022, and the related
statements of operations and changes in net assets, the related notes, and the
financial highlights for the period January 26, 2022 (commencement of
operations) through September 30, 2022 (collectively referred to as the
“financial statements”). In our opinion, the financial statements present
fairly, in all material respects, the financial position of the Fund as of
September 30, 2022, the results of its operations, the changes in net assets,
and the financial highlights for the period then ended, in conformity with
accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are
the responsibility of the Fund’s management. Our responsibility is to express an
opinion on the Fund’s financial statements based on our audit. We are a public
accounting firm registered with the Public Company Accounting Oversight Board
(United States) (“PCAOB”) and are required to be independent with respect to the
Fund in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in
accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement whether due to error or fraud.
Our audit included performing
procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of September 30, 2022,
by correspondence with the custodian and brokers. Our audit also included
evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial
statements. We believe that our audit provides a reasonable basis for our
opinion.
We have served as the Fund’s
auditor since 2022.
COHEN & COMPANY, LTD.
Milwaukee, Wisconsin
November 29, 2022
SUBVERSIVE
METAVERSE ETF
Statement
Regarding the Fund’s Liquidity Risk Management Program
(Unaudited)
In accordance with Rule 22e-4
under the Investment Company Act of 1940, as amended, Series Portfolios Trust
(the “Trust”) has adopted and implemented a liquidity risk management program
(the “Trust Program”). As required under the Trust Program, Subversive Capital
Advisor LLC (the “Adviser”), the investment adviser to the Subversive Metaverse
ETF (the “Fund”), a series of the Trust, has adopted and implemented a liquidity
risk management program tailored specifically to the Fund (the “Adviser
Program”). The Adviser Program seeks to promote effective liquidity risk
management for the Fund and to protect Fund shareholders from dilution of their
interests. The Board of Trustees (the “Board”) of the Trust has approved the
Adviser as the administrator for the Adviser Program (the “Program
Administrator”). The Program Administrator has further delegated administration
of the Adviser Program to Mr. Michael Auerbach, Founder and CEO, and Mr.
Eric Kleinschmidt, Chief Compliance Officer, each of the Adviser. The Program
Administrator is required to provide a written annual report to the Board and
the Trust’s chief compliance officer regarding the adequacy and effectiveness of
the Adviser Program, including the operation of the Fund’s highly liquid
investment minimum, if applicable, and any material changes to the Adviser
Program.
On July 28, 2022, the Board
reviewed the Program Administrator’s written annual report for the period
January 27, 2022, through May 31, 2022 (the “Report”). The Report provided an
assessment of the Fund’s liquidity risk: the risk that the Fund could not meet
requests to redeem shares issued by the Fund without significant dilution of the
remaining investors’ interests in the Fund. The Adviser Program assesses
liquidity risk under both normal and reasonably foreseeable stressed market
conditions. The Program Administrator has retained ICE Data Services, Inc., a
third-party vendor, to provide portfolio investment classification services, and
the Report noted that the Fund primarily held investments that were classified
as highly liquid during the review period. The Report noted that the Fund’s
portfolio is expected to continue to primarily hold highly liquid investments
and the determination that the Fund be designated as a “primarily highly liquid
fund” (as defined in Rule 22e-4) remains appropriate and the Fund can therefore
continue to rely on the exclusion in Rule 22e-4 from the requirements to
determine and review a highly liquid investment minimum for the Fund and to
adopt policies and procedures for responding to a highly liquid investment
minimum shortfall. The Report noted that there were no breaches of the Fund’s
restriction on holding illiquid investments exceeding 15% of its net assets
during the review period. The Report confirmed that the Fund’s investment
strategy was appropriate for an open-end management investment company. The
Report also indicated that no material changes had been made to the Adviser
Program during the review period.
The Program Administrator
determined that the Fund is reasonably likely to be able to meet redemption
requests without adversely affecting non-redeeming Fund shareholders through
significant dilution. The Program Administrator concluded that the Adviser
Program was adequately designed and effectively implemented during the review
period.
SUBVERSIVE
METAVERSE ETF
Additional
Information (Unaudited)
September
30, 2022
TRUSTEES AND EXECUTIVE OFFICERS
The Board oversees the
management and operations of the Trust. The Board, in turn, elects the officers
of the Trust, who are responsible for the day-to-day operations of the Trust and
its separate series. The current Trustees and officers of the Trust, their year
of birth, positions with the Trust, terms of office with the Trust and length of
time served, principal occupations during the past five years and other
directorships are set forth in the table below. Unless noted otherwise, the
principal business address of each Trustee is c/o U.S. Bank Global Fund
Services, 615 East Michigan Street, Milwaukee, Wisconsin 53202.
|
|
|
|
Number of |
|
|
|
|
|
Portfolios |
|
|
|
|
|
in Fund |
Other |
|
Positions |
Term of Office |
|
Complex (2)
|
Directorships |
Name and |
with |
and Length of |
Principal Occupations
|
Overseen |
Held During |
Year of Birth
|
the Trust |
Time Served
|
During Past Five Years
|
by Trustees
|
Past Five Years
|
Independent Trustees of the
Trust (1)
|
|
|
|
|
|
|
Koji Felton |
Trustee |
Indefinite Term; |
Retired. |
2 |
Independent |
(born 1961) |
|
Since |
|
|
Trustee, Listed |
|
|
September |
|
|
Funds Trust |
|
|
2015. |
|
|
(15 portfolios) |
|
|
|
|
|
(Since 2019). |
|
|
|
|
|
|
Debra McGinty-Poteet |
Trustee |
Indefinite Term; |
Retired. |
2 |
Independent |
(born 1956) |
|
Since |
|
|
Trustee, F/m |
|
|
September 2015. |
|
|
Funds Trust |
|
|
|
|
|
(3 portfolios) |
|
|
|
|
|
(Since May |
|
|
|
|
|
2015). |
|
|
|
|
|
|
Daniel B. Willey |
Trustee |
Indefinite Term; |
Retired. Chief Compliance |
2 |
None |
(born 1955) |
|
Since |
Officer, United Nations |
|
|
|
|
September 2015. |
Joint Staff Pension Fund |
|
|
|
|
|
(2009 – 2017). |
|
|
|
|
|
|
|
|
Interested Trustee
|
|
|
|
|
|
|
|
|
|
|
|
Elaine E. Richards (3)
|
Chair, |
Indefinite Term; |
Senior Vice President, |
2 |
None |
(born 1968) |
Trustee |
Since |
U.S. Bank Global Fund |
|
|
|
|
July 2021 |
Services (since 2007). |
|
|
|
|
|
|
|
|
Officers of the Trust
|
|
|
|
|
|
|
|
|
|
|
|
Ryan L. Roell |
President and |
Indefinite Term; |
Vice President, |
Not |
Not |
(born 1973) |
Principal |
Since |
U.S. Bank Global Fund |
Applicable |
Applicable |
|
Executive |
July 2019. |
Services (since 2005). |
|
|
|
Officer |
|
|
|
|
|
|
|
|
|
|
Cullen O. Small |
Vice |
Indefinite Term; |
Vice President, |
Not |
Not |
(born 1987) |
President, |
Since |
U.S. Bank Global Fund |
Applicable |
Applicable |
|
Treasurer and |
January 2019. |
Services (since 2010). |
|
|
|
Principal |
|
|
|
|
|
Financial |
|
|
|
|
|
Officer |
|
|
|
|
SUBVERSIVE
METAVERSE ETF
Additional
Information (Unaudited) – Continued
September
30, 2022
|
|
|
|
Number of |
|
|
|
|
|
Portfolios |
|
|
|
|
|
in Fund |
Other |
|
Positions |
Term of Office |
|
Complex (2)
|
Directorships |
Name and |
with |
and Length of |
Principal Occupations
|
Overseen |
Held During |
Year of Birth
|
the Trust |
Time Served
|
During Past Five Years
|
by Trustees
|
Past Five Years
|
Donna Barrette |
Vice |
Indefinite Term; |
Senior Vice President |
Not |
Not |
(born 1966) |
President, |
Since |
and Compliance Officer, |
Applicable |
Applicable |
|
Chief |
November 2019. |
U.S. Bank Global Fund |
|
|
|
Compliance |
|
Services (since 2004). |
|
|
|
Officer and |
|
|
|
|
|
Anti-Money |
|
|
|
|
|
Laundering |
|
|
|
|
|
Officer |
|
|
|
|
|
|
|
|
|
|
Adam W. Smith |
Secretary |
Indefinite Term; |
Vice President, |
Not |
Not |
(born 1981) |
|
Since |
U.S. Bank Global Fund |
Applicable |
Applicable |
|
|
June 2019. |
Services (since 2012). |
|
|
|
|
|
|
|
|
Hailey S. Glaser (4)
|
Assistant |
Indefinite Term; |
Assistant Vice President, |
Not |
Not |
(born 1989) |
Treasurer |
Since |
U.S. Bank Global Fund |
Applicable |
Applicable |
|
|
July 2019. |
Services (since 2015). |
|
|
|
|
|
|
|
|
Kristen M. Pierson (4)
|
Assistant |
Indefinite Term; |
Assistant Vice President, |
Not |
Not |
(born 1979) |
Treasurer |
Since |
U.S. Bank Global Fund |
Applicable |
Applicable |
|
|
July 2019. |
Services (since 2017); |
|
|
|
|
|
Lead Fund Accountant, |
|
|
|
|
|
UMB Fund Services, Inc. |
|
|
|
|
|
(2006 – 2017). |
|
|
(1) |
The Trustees of the Trust
who are not “interested persons” of the Trust as defined under the 1940
Act (“Independent Trustees”). |
(2) |
As of the date September
30, 2022, the Trust was comprised of 11 portfolios (including the Fund)
managed by unaffiliated investment advisers. The term “Fund Complex”
applies only to the Fund. The Fund does not hold itself out as related to
any other series within the Trust for investment purposes, nor does it
share the same investment adviser with any other series within the Trust.
|
(3) |
Ms. Richards, as a result
of her employment with U.S. Bancorp Fund Services, LLC, which acts as
transfer agent, administrator, and fund accountant to the Trust, is
considered to be an “interested person” of the Trust, as defined by the
1940 Act. |
(4) |
Refer to Note 10 within
the Financial Statements. |
SUBVERSIVE
METAVERSE ETF
Additional
Information (Unaudited) – Continued
September
30, 2022
AVAILABILITY OF FUND PORTFOLIO
INFORMATION
The Fund files complete
schedules of portfolio holdings with the SEC for the first and third quarters of
each fiscal year on Part F of Form N-PORT, which is available on the SEC’s
website at www.sec.gov. The Fund’s Part F of Form N-PORT may be reviewed and
copied at the SEC’s Public Reference Room in Washington, D.C. For information on
the Public Reference Room call 1-800-SEC-0330. In addition, the Fund’s Part F of
Form N-PORT is available without charge upon request by calling 1-800-617-0004.
AVAILABILITY OF PROXY VOTING
INFORMATION
A description of the Fund’s
Proxy Voting Policies and Procedures is available without charge, upon request,
by calling 1-800-617-0004. Information regarding how the Fund voted proxies
relating to portfolio securities during the most recent period ended June 30, is
available (1) without charge, upon request, by calling 1-800-617-0004, or on the
SEC’s website at www.sec.gov.
FREQUENCY DISTRIBUTION OF
PREMIUMS AND DISCOUNTS
Information regarding how often
shares of the Funds trade on the exchange at a price about (i.e. at a premium)
or below (i.e. at a discount) the NAV of the Funds are available, without charge
on the Funds’ website at www.subversive.com/ETFs.
SUBVERSIVE
METAVERSE ETF
Privacy
Notice (Unaudited)
The Fund collects non-public
information about you from the following sources:
|
• |
Information we receive
about you on applications or other forms; |
|
• |
Information you give us
orally; and/or |
|
• |
Information about your
transactions with us or others |
We do not disclose any
non-public personal information about our customers or former customers without
the customer’s authorization, except as permitted by law. We may share
information with affiliated and unaffiliated third parties with whom we have
contracts for servicing the Fund. We will provide unaffiliated third parties
with only the information necessary to carry out their assigned
responsibilities. We maintain physical, electronic and procedural safeguards to
guard your personal information and require third parties 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.
(This Page Intentionally Left
Blank.)
INVESTMENT
ADVISER
Subversive Capital Advisor LLC
217 Centre Street, Suite 122
New York, NY 10013
DISTRIBUTOR
Quasar Distributors, LLC
111 East Kilbourn Avenue, Suite
2200
Milwaukee, WI 53202
CUSTODIAN
U.S. Bank N.A.
1555 North Rivercenter Drive
Milwaukee, WI 53212
ADMINISTRATOR,
FUND ACCOUNTANT AND TRANSFER AGENT
U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Cohen & Company, Ltd.
342 North Water Street, Suite
830
Milwaukee, WI 53202
LEGAL COUNSEL
Goodwin Procter LLP
1900 N Street, NW
Washington, DC 20001
This report
should be accompanied or preceded by a prospectus.
The Fund’s
Statement of Additional Information contains additional information about the
Fund’s
trustees and is available without charge upon request by calling 1-800-617-0004.