Annual Report
September 30, 2021
Etho Climate Leadership U.S. ETF
Ticker: ETHO
The fund is a series of ETF Managers Trust.
Etho Climate Leadership U.S. ETF
TABLE
OF CONTENTS |
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3 | |
4 | |
5 | |
6 | |
7 | |
16 | |
17 | |
18 | |
19 | |
20 | |
29 | |
30 | |
31 | |
31 | |
31 | |
32 | |
34 |
Etho Climate Leadership U.S. ETF
On behalf of the entire team, we want to express our appreciation for the confidence you have placed in the Etho Climate Leadership U.S. Exchange-Traded Fund (“ETHO” or the “Fund”). The following information pertains to the fiscal period from October 1, 2020 to September 30, 2021.
The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Etho Climate Leadership Index – U.S. (the “Index”).
For the fiscal period ended September 30, 2021, the total return for the Fund was 35.48% while the total return for the Index was 35.09%. The best performers in the Fund on the basis of contribution to its return were Sunpower Corp., Tesla Inc., Wesco International Inc., SVB Financial Group and Genmark Diagnostics Inc., while the worst performers Zoom Video Communications-A, Beyond Meat Inc., Teladoc Health Inc., Romeo Power Inc. and Quantumscape Corp.
During the reporting period, the Fund saw an average approximate allocation of 9.8% to Semiconductors & Semiconductor Equipment, 6.9% to Software, 5.2% to IT Services and 5.1% to Health Care Equipment & Supplies and 5.0% to Machinery. The Fund invests in the United States.
As you may know, the Etho Climate Leadership U.S. ETF offers broad diversification across companies that have demonstrated efficiency and leadership with their use of resources and their supply chains when compared to industry peers. The Fund holds roughly 265 equities equally weighted (at the time of rebalance) and results in a carbon emissions profile that is, on average, 50-70% lower per dollar invested than conventional U.S. benchmark indices.1 ETHO avoids investment in any direct fossil fuel companies, as well as enablers of that industry, along with a series of other unsustainable industries such as Tobacco/Weapons/Gambling, etc. Equal weighting of the Fund allows for the elimination of equities that do not meet ETHO’s standards without there being a significant impact on the diversification or performance of the Fund. It also creates broad exposure to both the sectors and factors that potentially make for greater stability and higher performance.
There is much ahead for environmentally sustainable and socially responsible investing. We are thankful you have joined us by investing in the Etho Climate Leadership U.S. ETF. You can find further details about ETHO by visiting www.etfmg.com, or by calling 1- 844-ETF-MGRS (1-844-383-6477).
Sincerely,
Samuel Masucci III
Chairman of the Board
1 Etho Capital. www.ethocapital.com
Etho Climate Leadership U.S. ETF
Average
Annual Returns |
|
1
Year |
|
|
5
Year |
|
|
Since
|
|
|
Value
of |
| ||||
Etho Climate Leadership U.S. ETF (NAV) |
|
|
35.48 |
% |
|
|
18.19 |
% |
|
|
16.91 |
% |
|
$ |
25,009 |
|
Etho Climate Leadership U.S. ETF (Market) |
|
|
35.30 |
% |
|
|
18.25 |
% |
|
|
16.93 |
% |
|
$ |
25,036 |
|
S&P 500 Index |
|
|
30.00 |
% |
|
|
16.90 |
% |
|
|
15.37 |
% |
|
$ |
23,145 |
|
Etho Climate Leadership Index - U.S. |
|
|
35.09 |
% |
|
|
17.68 |
% |
|
|
16.36 |
% |
|
$ |
24,333 |
|
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more of less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. All performance is historical and includes reinvestment of dividends and capital gains. Performance data current to the most recent month end may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477).
The chart illustrates the performance of a hypothetical $10,000 investment made on November 18, 2015, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions from the sales of Fund shares. The chart assumes reinvestment of capital gains and dividends, if any. The Index Returns do not reflect fees or expenses and are not available for direct investment.
Etho Climate Leadership U.S. ETF
|
|
Security |
|
%
of Total |
1 |
|
American National Group, Inc. |
0.55% | |
2 |
|
Gartner, Inc. |
0.52% | |
3 |
|
Herc Holdings, Inc. |
0.50% | |
4 |
|
AMN Healthcare Services, Inc. |
0.48% | |
5 |
|
NVIDIA Corp. |
0.48% | |
6 |
|
DexCom, Inc. |
0.47% | |
7 |
|
West Pharmaceutical Services, Inc. |
0.47% | |
8 |
|
MSCI, Inc. |
0.45% | |
9 |
|
Watts Water Technologies, Inc. - Class A |
0.44% | |
10 |
|
Intuit, Inc. |
0.44% | |
Top Ten Holdings 4.80% of Total Investments | ||||
* Current Fund holdings may not be indicative of future Fund holdings. |
Etho Climate Leadership U.S. ETF
Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Narrowly focused investments typically exhibit higher volatility.
Past performance is not indicative of future return. A fund’s performance for very short time periods may not be indicative of future performance.
ETHO
The ETHO Climate Leadership US ETF (the “Fund”) seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Etho Climate Leadership Index (the “Index”).
The Fund’s return may not match or achieve a high degree of correlation with the return of the Etho Climate Leadership Index — US.
To the extent the Fund utilizes a sampling approach, it may experience tracking error to a greater extent than if the Fund had sought to replicate the Index.
Unlike with an actively managed fund, the Fund’s adviser does not use techniques or defensive strategies designed to lessen the effects of market volatility or to reduce the impact of periods of market decline. This means that, based on market and economic conditions, the Fund’s performance could be lower than other types of funds that may actively shift their portfolio assets to take advantage of market opportunities or to lessen the impact of a market decline.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather- related phenomena generally, and widespread disease, including pandemics and epidemics, have been and may be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries, including the U.S. Any such events could have a significant adverse impact on the value of the Fund’s investments.
Additionally, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism or other events could result in increased premiums or discounts to the Fund’s NAV.
ETF Managers Group LLC serves as the investment adviser to the Fund.
The Fund is distributed by ETFMG Financial LLC. Both ETF Managers Group LLC and ETFMG Financial LLC are wholly owned subsidiaries of Exchange Traded Managers Group LLC (collectively, “ETFMG”). ETFMG Financial LLC is not affiliated with Etho Capital.
The Fund is intended to be made available only to U.S. residents. Under no circumstances is any information provided on this website intended for distribution to or use by, or to be an offer to sell to or solicitation of an offer to buy the Fund or any investment product or service of, any person or entity in any jurisdiction or country, other than the United States, where such distribution, use, offer or solicitation would subject the Fund or its affiliates to any registration requirement or be unlawful under the securities laws of that jurisdiction or country.
Etho Climate Leadership U.S. ETF
As of September 30, 2021 (Unaudited) |
|
|
Etho Climate Leadership U.S. ETF |
| |
As a percent of Net Assets: |
|
|
|
|
Guernsey |
|
|
0.4 |
% |
United States |
|
|
99.1 |
|
Short-Term and other Net Assets (Liabilities) |
|
|
0.5 |
|
|
|
|
100.0 |
% |
Etho Climate Leadership U.S. ETF
|
|
Shares |
|
|
Value |
| ||
COMMON STOCKS - 99.5% |
|
|
|
|
|
| ||
Guernsey - 0.4% |
|
|
|
|
|
|
|
|
IT Services - 0.4% |
|
|
|
|
|
|
|
|
Amdocs, Ltd. |
|
|
9,320 |
|
|
$ |
705,617 |
|
United States - 99.1% |
|
|
|
|
|
|
|
|
Air Freight & Logistics - 0.4% |
|
|
|
|
|
|
|
|
United Parcel Service, Inc. - Class B |
|
|
3,855 |
|
|
|
701,996 |
|
Auto Components - 1.1% |
|
|
|
|
|
|
|
|
BorgWarner, Inc. (b) |
|
|
14,110 |
|
|
|
609,693 |
|
Gentex Corp. |
|
|
18,290 |
|
|
|
603,204 |
|
QuantumScape Corp. (a)(b) |
|
|
14,543 |
|
|
|
356,885 |
|
XL Fleet Corp. (a)(b) |
|
|
72,472 |
|
|
|
446,428 |
|
Total Auto Components |
|
|
|
|
|
|
2,016,210 |
|
Automobiles - 1.3% |
|
|
|
|
|
|
|
|
Canoo, Inc. (a)(b) |
|
|
72,072 |
|
|
|
554,234 |
|
Fisker, Inc. (a)(b) |
|
|
37,792 |
|
|
|
553,653 |
|
Lordstown Motors Corp. - Class A (a)(b) |
|
|
55,293 |
|
|
|
441,238 |
|
Tesla, Inc. (a) |
|
|
974 |
|
|
|
755,317 |
|
Total Automobiles |
|
|
|
|
|
|
2,304,442 |
|
Banks - 3.0% |
|
|
|
|
|
|
|
|
Amalgamated Financial Corp. |
|
|
39,507 |
|
|
|
625,001 |
|
Bank of Hawaii Corp. |
|
|
7,352 |
|
|
|
604,114 |
|
Commerce Bancshares, Inc. |
|
|
8,537 |
|
|
|
594,858 |
|
Cullen/Frost Bankers, Inc. (b) |
|
|
6,035 |
|
|
|
715,872 |
|
First Horizon Corp. (b) |
|
|
38,969 |
|
|
|
634,805 |
|
South State Corp. (b) |
|
|
8,360 |
|
|
|
624,241 |
|
SVB Financial Group (a) |
|
|
1,316 |
|
|
|
851,294 |
|
Truist Financial Corp. |
|
|
11,283 |
|
|
|
661,748 |
|
Total Banks |
|
|
|
|
|
|
5,311,933 |
|
Biotechnology - 2.3% |
|
|
|
|
|
|
|
|
Agios Pharmaceuticals, Inc. (a)(b) |
|
|
12,603 |
|
|
|
581,628 |
|
Alnylam Pharmaceuticals, Inc. (a) |
|
|
4,608 |
|
|
|
870,036 |
|
Avita Medical, Inc. (a)(b) |
|
|
32,836 |
|
|
|
581,854 |
|
Biogen, Inc. (a) |
|
|
2,325 |
|
|
|
657,952 |
|
Seagen, Inc. (a) |
|
|
4,687 |
|
|
|
795,853 |
|
Vertex Pharmaceuticals, Inc. (a) |
|
|
3,028 |
|
|
|
549,249 |
|
Total Biotechnology |
|
|
|
|
|
|
4,036,572 |
|
Building Products - 2.9% |
|
|
|
|
|
|
|
|
A.O. Smith Corp. |
|
|
9,677 |
|
|
|
590,974 |
|
Advanced Drainage Systems, Inc. (b) |
|
|
6,303 |
|
|
|
681,796 |
|
Armstrong World Industries, Inc. |
|
|
7,242 |
|
|
|
691,394 |
|
Fortune Brands Home & Security, Inc. |
|
|
6,815 |
|
|
|
609,397 |
|
Lennox International, Inc. (b) |
|
|
2,091 |
|
|
|
615,109 |
|
Masco Corp. |
|
|
10,923 |
|
|
|
606,773 |
|
Simpson Manufacturing Co., Inc. |
|
|
6,283 |
|
|
|
672,093 |
|
Trex Co., Inc. (a)(b) |
|
|
7,109 |
|
|
|
724,620 |
|
Total Building Products |
|
|
|
|
|
|
5,192,156 |
|
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
Schedule
of Investments |
|
|
Shares |
|
|
Value |
| ||
Capital Markets - 3.7% | ||||||||
Affiliated Managers Group, Inc. |
|
|
4,366 |
|
|
$ |
659,659 |
|
Ares Management Corp. - Class A |
|
|
11,729 |
|
|
|
865,951 |
|
Charles Schwab Corp. |
|
|
10,020 |
|
|
|
729,857 |
|
Interactive Brokers Group, Inc. - Class A |
|
|
8,928 |
|
|
|
556,572 |
|
KKR & Co, Inc. |
|
|
13,366 |
|
|
|
813,722 |
|
MarketAxess Holdings, Inc. (b) |
|
|
1,308 |
|
|
|
550,263 |
|
MSCI, Inc. |
|
|
1,554 |
|
|
|
945,359 |
|
Northern Trust Corp. |
|
|
6,244 |
|
|
|
673,166 |
|
T. Rowe Price Group, Inc. |
|
|
3,861 |
|
|
|
759,459 |
|
Total Capital Markets |
|
|
|
|
|
|
6,554,008 |
|
Chemicals - 0.4% |
|
|
|
|
|
|
|
|
Ecolab, Inc. |
|
|
3,048 |
|
|
|
635,874 |
|
Commercial Services & Supplies - 2.0% |
|
|
|
|
|
|
|
|
Cintas Corp. |
|
|
1,911 |
|
|
|
727,441 |
|
Clean Harbors, Inc. (a) |
|
|
7,742 |
|
|
|
804,162 |
|
Copart, Inc. (a) |
|
|
5,990 |
|
|
|
830,932 |
|
Rollins, Inc. |
|
|
18,964 |
|
|
|
669,998 |
|
Steelcase, Inc. - Class A |
|
|
45,529 |
|
|
|
577,308 |
|
Total Commercial Services & Supplies |
|
|
|
|
|
|
3,609,841 |
|
Communications Equipment - 1.6% |
|
|
|
|
|
|
|
|
Arista Networks, Inc. (a)(b) |
|
|
2,154 |
|
|
|
740,201 |
|
Cisco Systems, Inc. |
|
|
12,646 |
|
|
|
688,322 |
|
F5 Networks, Inc. (a) |
|
|
3,120 |
|
|
|
620,194 |
|
Motorola Solutions, Inc. |
|
|
3,474 |
|
|
|
807,079 |
|
Total Communications Equipment |
|
|
|
|
|
|
2,855,796 |
|
Construction & Engineering - 0.8% |
|
|
|
|
|
|
|
|
Ameresco, Inc. - Class A (a) |
|
|
13,383 |
|
|
|
781,968 |
|
EMCOR Group, Inc. |
|
|
5,810 |
|
|
|
670,358 |
|
Total Construction & Engineering |
|
|
|
|
1,452,326 |
| ||
Construction Materials - 0.4% |
|
|
|
|
|
|
|
|
Vulcan Materials Co. |
|
|
3,867 |
|
|
|
654,142 |
|
Consumer Finance - 1.6% |
|
|
|
|
|
|
|
|
American Express Co. |
|
|
4,608 |
|
|
|
771,978 |
|
Discover Financial Services |
|
|
6,887 |
|
|
|
846,069 |
|
PROG Holdings, Inc. |
|
|
15,033 |
|
|
|
631,536 |
|
SLM Corp. |
|
|
36,294 |
|
|
|
638,774 |
|
Total Consumer Finance |
|
|
|
|
|
|
2,888,357 |
|
Containers & Packaging - 1.5% |
|
|
|
|
|
|
|
|
AptarGroup, Inc. |
|
|
4,610 |
|
|
|
550,204 |
|
Avery Dennison Corp. |
|
|
3,558 |
|
|
|
737,252 |
|
Crown Holdings, Inc. |
|
|
6,724 |
|
|
|
677,645 |
|
Packaging Corp of America |
|
|
4,885 |
|
|
|
671,394 |
|
Total Containers & Packaging |
|
|
|
|
|
|
2,636,495 |
|
Distributors - 1.3% |
|
|
|
|
|
|
|
|
Genuine Parts Co. |
|
|
5,680 |
|
|
|
688,586 |
|
LKQ Corp. (a)(b) |
|
|
15,374 |
|
|
|
773,620 |
|
Pool Corp. |
|
|
1,889 |
|
|
|
820,601 |
|
Total Distributors |
|
|
|
|
|
|
2,282,807 |
|
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
Schedule
of Investments |
|
|
Shares |
|
|
Value |
| ||
Diversified Financial Services - 0.6% | ||||||||
Cannae Holdings, Inc. (a) |
|
|
16,425 |
|
|
$ |
510,982 |
|
Voya Financial, Inc. |
|
|
10,263 |
|
|
|
630,045 |
|
Total Diversified Financial Services |
|
|
|
|
|
|
1,141,027 |
|
Diversified Telecommunication Services - 1.0% |
|
|
|
|
|
|
|
|
AT&T, Inc. |
|
|
21,772 |
|
|
|
588,062 |
|
ATN International, Inc. |
|
|
13,283 |
|
|
|
622,308 |
|
Verizon Communications, Inc. |
|
|
11,280 |
|
|
|
609,233 |
|
Total Diversified Telecommunication Services |
|
|
|
|
|
|
1,819,603 |
|
Electrical Equipment - 2.2% |
|
|
|
|
|
|
|
|
Array Technologies, Inc. (a)(b) |
|
|
21,823 |
|
|
|
404,162 |
|
ChargePoint Holdings, Inc. (a)(b) |
|
|
24,375 |
|
|
|
487,256 |
|
FuelCell Energy, Inc. (a)(b) |
|
|
45,163 |
|
|
|
302,140 |
|
Hubbell, Inc. |
|
|
3,506 |
|
|
|
633,429 |
|
Rockwell Automation, Inc. |
|
|
2,464 |
|
|
|
724,514 |
|
Romeo Power, Inc. (a) |
|
|
78,129 |
|
|
|
386,739 |
|
Shoals Technologies Group, Inc. - Class A (a)(b) |
|
|
18,711 |
|
|
|
521,663 |
|
Sunrun, Inc. (a)(b) |
|
|
10,760 |
|
|
|
473,440 |
|
Total Electrical Equipment |
|
|
|
|
|
|
3,933,343 |
|
Electronic Equipment, Instruments & Components - 3.2% |
|
|
|
|
|
|
|
|
CDW Corp. |
|
|
3,937 |
|
|
|
716,613 |
|
Corning, Inc. |
|
|
15,077 |
|
|
|
550,160 |
|
IPG Photonics Corp. (a)(b) |
|
|
3,084 |
|
|
|
488,506 |
|
Itron, Inc. (a) |
|
|
7,341 |
|
|
|
555,200 |
|
Keysight Technologies, Inc. (a) |
|
|
4,537 |
|
|
|
745,383 |
|
Littelfuse, Inc. |
|
|
2,467 |
|
|
|
674,157 |
|
National Instruments Corp. |
|
|
15,208 |
|
|
|
596,610 |
|
Trimble, Inc. (a) |
|
|
8,365 |
|
|
|
688,021 |
|
Zebra Technologies Corp. - Class A (a) |
|
|
1,341 |
|
|
|
691,178 |
|
Total Electronic Equipment, Instruments & Components |
|
|
|
|
|
|
5,705,828 |
|
Entertainment - 2.2% |
|
|
|
|
|
|
|
|
Activision Blizzard, Inc. |
|
|
7,022 |
|
|
|
543,433 |
|
Liberty Media Corp-Liberty Formula One - Class C (a) |
|
|
15,033 |
|
|
|
772,846 |
|
Live Nation Entertainment, Inc. (a)(b) |
|
|
7,688 |
|
|
|
700,607 |
|
Netflix, Inc. (a) |
|
|
1,246 |
|
|
|
760,484 |
|
Take-Two Interactive Software, Inc. (a) |
|
|
3,682 |
|
|
|
567,286 |
|
Walt Disney Co. (a) |
|
|
3,525 |
|
|
|
596,324 |
|
Total Entertainment |
|
|
|
|
|
|
3,940,980 |
|
Food & Staples Retailing - 0.7% |
|
|
|
|
|
|
|
|
PriceSmart, Inc. |
|
|
6,745 |
|
|
|
523,075 |
|
Sysco Corp. |
|
|
8,300 |
|
|
|
651,550 |
|
Total Food & Staples Retailing |
|
|
|
|
|
|
1,174,625 |
|
Food Products - 1.3% |
|
|
|
|
|
|
|
|
Beyond Meat, Inc. (a)(b) |
|
|
5,001 |
|
|
|
526,405 |
|
Hain Celestial Group, Inc. (a)(b) |
|
|
14,925 |
|
|
|
638,491 |
|
Lamb Weston Holdings, Inc. |
|
|
8,437 |
|
|
|
517,779 |
|
McCormick & Co., Inc. |
|
|
7,338 |
|
|
|
594,598 |
|
Total Food Products |
|
|
|
|
|
|
2,277,273 |
|
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
Schedule
of Investments |
|
|
Shares |
|
|
Value |
| ||
Health Care Equipment & Supplies - 4.2% | ||||||||
Align Technology, Inc. (a) |
|
|
1,202 |
|
|
$ |
799,847 |
|
Cooper Cos. |
|
|
1,694 |
|
|
|
700,147 |
|
Danaher Corporation |
|
|
2,893 |
|
|
|
880,745 |
|
DexCom, Inc. (a) |
|
|
1,811 |
|
|
|
990,364 |
|
Edwards Lifesciences Corp. (a) |
|
|
7,780 |
|
|
|
880,774 |
|
IDEXX Laboratories, Inc. (a) |
|
|
1,330 |
|
|
|
827,127 |
|
ResMed, Inc. |
|
|
3,363 |
|
|
|
886,319 |
|
Teleflex, Inc. |
|
|
1,568 |
|
|
|
590,430 |
|
West Pharmaceutical Services, Inc. |
|
|
2,310 |
|
|
|
980,688 |
|
Total Health Care Equipment & Supplies |
|
|
|
|
|
|
7,536,441 |
|
Health Care Providers & Services - 1.0% |
|
|
|
|
|
|
|
|
AMN Healthcare Services, Inc. (a) |
|
|
8,830 |
|
|
|
1,013,242 |
|
Henry Schein, Inc. (a) |
|
|
9,398 |
|
|
|
715,752 |
|
Total Health Care Providers & Services |
|
|
|
|
|
|
1,728,994 |
|
Health Care Technology - 0.6% |
|
|
|
|
|
|
|
|
Cerner Corp. |
|
|
9,072 |
|
|
|
639,757 |
|
Teladoc Health, Inc. (a)(b) |
|
|
3,579 |
|
|
|
453,853 |
|
Total Health Care Technology |
|
|
|
|
|
|
1,093,610 |
|
Hotels, Restaurants & Leisure - 1.2% |
|
|
|
|
|
|
|
|
Booking Holdings, Inc. (a) |
|
|
278 |
|
|
|
659,936 |
|
Chipotle Mexican Grill, Inc. (a) |
|
|
457 |
|
|
|
830,607 |
|
Hilton Worldwide Holdings, Inc. (a) |
|
|
5,381 |
|
|
|
710,884 |
|
Total Hotels, Restaurants & Leisure |
|
|
|
|
|
|
2,201,427 |
|
Household Durables - 1.5% |
|
|
|
|
|
|
|
|
GoPro, Inc. - Class A (a)(b) |
|
|
55,910 |
|
|
|
523,318 |
|
NVR, Inc. (a)(b) |
|
|
138 |
|
|
|
661,583 |
|
Tempur Sealy International, Inc. |
|
|
17,849 |
|
|
|
828,372 |
|
TopBuild Corp. (a) |
|
|
3,106 |
|
|
|
636,140 |
|
Total Household Durables |
|
|
|
|
|
|
2,649,413 |
|
Household Products - 0.3% |
|
|
|
|
|
|
|
|
Church & Dwight Co., Inc. (b) |
|
|
7,480 |
|
|
|
617,624 |
|
Independent Power and Renewable Electricity Producers - 1.0% |
|
|
|
|
|
|
|
|
Clearway Energy, Inc. - Class A |
|
|
24,968 |
|
|
|
704,098 |
|
Ormat Technologies, Inc. (b) |
|
|
8,307 |
|
|
|
553,329 |
|
Sunnova Energy International, Inc. (a)(b) |
|
|
15,942 |
|
|
|
525,129 |
|
Total Independent Power and Renewable Electricity Producers |
|
|
|
|
|
|
1,782,556 |
|
Insurance - 3.6% |
|
|
|
|
|
|
|
|
American Financial Group, Inc. |
|
|
6,234 |
|
|
|
784,424 |
|
American National Group, Inc. |
|
|
6,074 |
|
|
|
1,148,169 |
|
Cincinnati Financial Corp. |
|
|
6,360 |
|
|
|
726,439 |
|
Citizens, Inc. (a)(b) |
|
|
112,402 |
|
|
|
698,016 |
|
Erie Indemnity Co. - Class A (b) |
|
|
2,957 |
|
|
|
527,588 |
|
Globe Life, Inc. |
|
|
6,744 |
|
|
|
600,418 |
|
Hartford Financial Services Group, Inc. |
|
|
9,815 |
|
|
|
689,504 |
|
MetLife, Inc. |
|
|
10,819 |
|
|
|
667,857 |
|
W R Berkley Corp. |
|
|
8,700 |
|
|
|
636,666 |
|
Total Insurance |
|
|
|
|
|
|
6,479,081 |
|
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
Schedule
of Investments |
|
|
Shares |
|
|
Value |
| ||
Interactive Media & Services - 0.5% | ||||||||
Alphabet, Inc. - Class A (a) |
|
|
315 |
|
|
$ |
842,159 |
|
Internet & Direct Marketing Retail - 1.2% |
|
|
|
|
|
|
|
|
Amazon.com, Inc. (a) |
|
|
209 |
|
|
|
686,573 |
|
eBay, Inc. |
|
|
10,666 |
|
|
|
743,100 |
|
Etsy, Inc. (a)(b) |
|
|
3,226 |
|
|
|
670,879 |
|
Total Internet & Direct Marketing Retail |
|
|
|
|
|
|
2,100,552 |
|
IT Services - 5.4% |
|
|
|
|
|
|
|
|
Akamai Technologies, Inc. (a) |
|
|
6,386 |
|
|
|
667,912 |
|
Broadridge Financial Solutions, Inc. |
|
|
4,272 |
|
|
|
711,886 |
|
DXC Technology Co. (a) |
|
|
20,817 |
|
|
|
699,659 |
|
Fidelity National Information Services, Inc. |
|
|
4,646 |
|
|
|
565,325 |
|
Fiserv, Inc. (a)(b) |
|
|
5,467 |
|
|
|
593,170 |
|
Gartner, Inc. (a) |
|
|
3,564 |
|
|
|
1,083,028 |
|
Global Payments, Inc. |
|
|
3,232 |
|
|
|
509,299 |
|
International Business Machines Corp. |
|
|
4,960 |
|
|
|
689,093 |
|
Jack Henry & Associates, Inc. (b) |
|
|
4,305 |
|
|
|
706,278 |
|
MasterCard, Inc. - Class A |
|
|
1,828 |
|
|
|
635,559 |
|
Paychex, Inc. |
|
|
6,696 |
|
|
|
752,965 |
|
PayPal Holdings, Inc. (a) |
|
|
2,679 |
|
|
|
697,103 |
|
VeriSign, Inc. (a) |
|
|
3,273 |
|
|
|
670,998 |
|
Visa, Inc. - Class A (b) |
|
|
3,079 |
|
|
|
685,847 |
|
Total IT Services |
|
|
|
|
|
|
9,668,122 |
|
Leisure Products - 0.3% |
|
|
|
|
|
|
|
|
Hasbro, Inc. |
|
|
6,834 |
|
|
|
609,729 |
|
Life Sciences Tools & Services - 0.8% |
|
|
|
|
|
|
|
|
Bio-Techne Corp. |
|
|
1,705 |
|
|
|
826,192 |
|
Illumina, Inc. (a) |
|
|
1,694 |
|
|
|
687,103 |
|
Total Life Sciences Tools & Services |
|
|
|
|
|
|
1,513,295 |
|
Machinery - 3.8% |
|
|
|
|
|
|
|
|
Deere & Co. |
|
|
1,743 |
|
|
|
584,027 |
|
Dover Corporation |
|
|
4,766 |
|
|
|
741,113 |
|
Energy Recovery, Inc. (a)(b) |
|
|
35,485 |
|
|
|
675,280 |
|
Hyliion Holdings Corp. (a)(b) |
|
|
60,993 |
|
|
|
512,341 |
|
Illinois Tool Works, Inc. |
|
|
2,948 |
|
|
|
609,145 |
|
Mueller Water Products, Inc. - Class A (b) |
|
|
47,091 |
|
|
|
716,725 |
|
Parker-Hannifin Corp. |
|
|
2,072 |
|
|
|
579,373 |
|
Watts Water Technologies, Inc. - Class A |
|
|
5,490 |
|
|
|
922,815 |
|
Westinghouse Air Breaks Technologies Corp. (b) |
|
|
8,237 |
|
|
|
710,112 |
|
Xylem, Inc. |
|
|
6,206 |
|
|
|
767,558 |
|
Total Machinery |
|
|
|
|
|
|
6,818,489 |
|
Media - 2.1% |
|
|
|
|
|
|
|
|
Discovery, Inc. - Class A (a)(b) |
|
|
14,974 |
|
|
|
380,040 |
|
John Wiley & Sons, Inc. - Class A (b) |
|
|
12,054 |
|
|
|
629,339 |
|
Liberty Broadband Corp. - Class C (a) |
|
|
4,334 |
|
|
|
748,482 |
|
New York Times Co. - Class A |
|
|
12,871 |
|
|
|
634,154 |
|
Sirius XM Holdings, Inc. (b) |
|
|
107,217 |
|
|
|
654,024 |
|
TEGNA, Inc. |
|
|
34,811 |
|
|
|
686,473 |
|
Total Media |
|
|
|
|
|
|
3,732,512 |
|
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
Schedule
of Investments |
|
|
Shares |
|
|
Value |
| ||
Metals & Mining - 0.4% | ||||||||
Compass Minerals International, Inc. (b) |
|
|
10,532 |
|
|
$ |
678,261 |
|
Multiline Retail - 0.5% |
|
|
|
|
|
|
|
|
Kohl’s Corp. |
|
|
10,987 |
|
|
|
517,378 |
|
Nordstrom, Inc. (a) |
|
|
17,185 |
|
|
|
454,543 |
|
Total Multiline Retail |
|
|
|
|
|
|
971,921 |
|
Personal Products - 0.4% |
|
|
|
|
|
|
|
|
Estee Lauder Cos., Inc. - Class A |
|
|
2,242 |
|
|
|
672,443 |
|
Pharmaceuticals - 2.1% |
|
|
|
|
|
|
|
|
Bristol-Myers Squibb Co. |
|
|
10,361 |
|
|
|
613,060 |
|
Catalent, Inc. (a) |
|
|
6,180 |
|
|
|
822,372 |
|
Merck & Co, Inc. |
|
|
8,545 |
|
|
|
641,815 |
|
Organon & Co. |
|
|
849 |
|
|
|
27,839 |
|
Pfizer, Inc. |
|
|
18,201 |
|
|
|
782,825 |
|
Zoetis, Inc. |
|
|
4,141 |
|
|
|
803,934 |
|
Total Pharmaceuticals |
|
|
|
|
|
|
3,691,845 |
|
Professional Services - 0.9% |
|
|
|
|
|
|
|
|
Robert Half International, Inc. |
|
|
8,382 |
|
|
|
840,966 |
|
Verisk Analytics, Inc. |
|
|
3,690 |
|
|
|
738,996 |
|
Total Professional Services |
|
|
|
|
|
|
1,579,962 |
|
Real Estate Investment Trusts (REITS) - 4.6% |
|
|
|
|
|
|
|
|
AGNC Investment Corp. (b) |
|
|
39,791 |
|
|
|
627,504 |
|
Annaly Capital Management, Inc. (b) |
|
|
76,964 |
|
|
|
648,037 |
|
Camden Property Trust |
|
|
5,947 |
|
|
|
877,004 |
|
Gladstone Land Corp. |
|
|
35,853 |
|
|
|
816,373 |
|
Hannon Armstrong Sustainable Infrastructure Capital, Inc. (b) |
|
|
11,651 |
|
|
|
623,095 |
|
Hudson Pacific Properties, Inc. |
|
|
24,293 |
|
|
|
638,177 |
|
Prologis, Inc. |
|
|
6,182 |
|
|
|
775,408 |
|
Public Storage, Inc. |
|
|
2,661 |
|
|
|
790,583 |
|
Regency Centers Corp. |
|
|
11,617 |
|
|
|
782,173 |
|
SBA Communications Corp. |
|
|
2,350 |
|
|
|
776,840 |
|
UDR, Inc. |
|
|
14,911 |
|
|
|
789,985 |
|
Total Real Estate Investment Trust (REITS) |
|
|
|
|
|
|
8,145,179 |
|
Road & Rail - 2.6% |
|
|
|
|
|
|
|
|
AMERCO |
|
|
1,062 |
|
|
|
686,084 |
|
CSX Corp. |
|
|
20,327 |
|
|
|
604,525 |
|
JB Hunt Transport Services, Inc. |
|
|
3,880 |
|
|
|
648,814 |
|
Landstar System, Inc. |
|
|
3,949 |
|
|
|
623,231 |
|
Lyft, Inc. - Class A (a) |
|
|
10,300 |
|
|
|
551,977 |
|
Old Dominion Freight Line, Inc. |
|
|
2,709 |
|
|
|
774,719 |
|
Ryder System, Inc. |
|
|
8,691 |
|
|
|
718,833 |
|
Total Road & Rail |
|
|
|
|
|
|
4,608,183 |
|
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
Schedule
of Investments |
|
|
Shares |
|
|
Value |
| ||
Semiconductors & Semiconductor Equipment - 7.1% | ||||||||
Advanced Micro Devices, Inc. (a) |
|
|
8,290 |
|
|
$ |
853,041 |
|
Analog Devices, Inc. |
|
|
4,081 |
|
|
|
683,486 |
|
Applied Materials, Inc. |
|
|
4,883 |
|
|
|
628,589 |
|
Cree, Inc. (a)(b) |
|
|
6,018 |
|
|
|
485,833 |
|
Enphase Energy, Inc. (a) |
|
|
4,012 |
|
|
|
601,680 |
|
First Solar, Inc. (a)(b) |
|
|
7,454 |
|
|
|
711,559 |
|
KLA Corp. |
|
|
1,976 |
|
|
|
660,992 |
|
Lam Research Corp. |
|
|
1,094 |
|
|
|
622,650 |
|
NVIDIA Corp. |
|
|
4,876 |
|
|
|
1,010,111 |
|
ON Semiconductor Corp. (a) |
|
|
15,639 |
|
|
|
715,797 |
|
Power Integrations, Inc. |
|
|
8,002 |
|
|
|
792,118 |
|
Qorvo, Inc. (a) |
|
|
3,561 |
|
|
|
595,364 |
|
Qualcomm, Inc. |
|
|
4,941 |
|
|
|
637,290 |
|
Rambus, Inc. (a)(b) |
|
|
33,476 |
|
|
|
743,167 |
|
SunPower Corp. (a)(b) |
|
|
19,456 |
|
|
|
441,262 |
|
Teradyne, Inc. |
|
|
5,354 |
|
|
|
584,496 |
|
Texas Instruments, Inc. |
|
|
3,469 |
|
|
|
666,776 |
|
Universal Display Corp. |
|
|
2,751 |
|
|
|
470,311 |
|
Xilinx, Inc. |
|
|
5,252 |
|
|
|
792,999 |
|
Total Semiconductors & Semiconductor Equipment |
|
|
|
|
|
|
12,697,521 |
|
Software - 6.8% |
|
|
|
|
|
|
|
|
Adobe Systems, Inc. (a) |
|
|
1,367 |
|
|
|
787,009 |
|
Ansys, Inc. (a) |
|
|
1,915 |
|
|
|
651,962 |
|
Autodesk, Inc. (a) |
|
|
2,348 |
|
|
|
669,579 |
|
Cadence Design System, Inc. (a) |
|
|
4,750 |
|
|
|
719,340 |
|
Dolby Laboratories, Inc. - Class A |
|
|
6,613 |
|
|
|
581,944 |
|
FireEye, Inc. (a) |
|
|
33,255 |
|
|
|
591,939 |
|
Intuit, Inc. |
|
|
1,701 |
|
|
|
917,706 |
|
Microsoft Corp. |
|
|
2,768 |
|
|
|
780,355 |
|
NCR Corp. (a) |
|
|
17,148 |
|
|
|
664,656 |
|
Paycom Software, Inc. (a)(b) |
|
|
1,758 |
|
|
|
871,528 |
|
salesforce.com, Inc. (a) |
|
|
3,071 |
|
|
|
832,917 |
|
ServiceNow, Inc. (a) |
|
|
1,300 |
|
|
|
808,951 |
|
Splunk, Inc. (a) |
|
|
4,804 |
|
|
|
695,187 |
|
Tyler Technologies, Inc. (a) |
|
|
1,532 |
|
|
|
702,652 |
|
VMware, Inc. - Class A (a)(b) |
|
|
4,326 |
|
|
|
643,276 |
|
Workday, Inc. - Class A (a) |
|
|
2,618 |
|
|
|
654,212 |
|
Zoom Video Communications, Inc. - Class A (a) |
|
|
2,024 |
|
|
|
529,276 |
|
Total Software |
|
|
|
|
|
|
12,102,489 |
|
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
Schedule
of Investments |
|
|
Shares |
|
|
Value |
| ||
Specialty Retail - 3.3% | ||||||||
Advance Auto Parts, Inc. |
|
|
3,571 |
|
|
$ |
745,946 |
|
Bath & Body Works, Inc. |
|
|
10,554 |
|
|
|
665,219 |
|
Foot Locker, Inc. |
|
|
11,623 |
|
|
|
530,706 |
|
Gap, Inc. |
|
|
21,909 |
|
|
|
497,334 |
|
Lowe’s Cos., Inc. |
|
|
3,438 |
|
|
|
697,433 |
|
Ross Stores, Inc. |
|
|
5,444 |
|
|
|
592,579 |
|
TJX Cos., Inc. |
|
|
9,887 |
|
|
|
652,344 |
|
Tractor Supply Co. |
|
|
3,688 |
|
|
|
747,226 |
|
Victoria’s Secret & Co. (a) |
|
|
3,511 |
|
|
|
194,018 |
|
Williams-Sonoma, Inc. (b) |
|
|
3,648 |
|
|
|
646,900 |
|
Total Specialty Retail |
|
|
|
|
|
|
5,969,705 |
|
Technology Hardware, Storage & Peripherals - 1.6% |
|
|
|
|
|
|
|
|
3D Systems Corp. (a)(b) |
|
|
23,717 |
|
|
|
653,878 |
|
Apple, Inc. |
|
|
5,340 |
|
|
|
755,610 |
|
Hewlett Packard Enterprise Co. (b) |
|
|
41,808 |
|
|
|
595,764 |
|
NetApp, Inc. |
|
|
8,992 |
|
|
|
807,122 |
|
Total Technology Hardware, Storage & Peripherals |
|
|
|
|
|
|
2,812,374 |
|
Thrifts & Mortgage Finance - 1.5% |
|
|
|
|
|
|
|
|
Capitol Federal Financial, Inc. |
|
|
50,733 |
|
|
|
582,922 |
|
New York Community Bancorp, Inc. (b) |
|
|
52,604 |
|
|
|
677,013 |
|
TFS Financial Corp. |
|
|
32,553 |
|
|
|
620,460 |
|
Washington Federal, Inc. |
|
|
21,341 |
|
|
|
732,211 |
|
Total Thrifts & Mortgage Finance |
|
|
|
|
|
|
2,612,606 |
|
Trading Companies & Distributors - 2.2% |
|
|
|
|
|
|
|
|
Herc Holdings, Inc. (a)(b) |
|
|
6,423 |
|
|
|
1,049,903 |
|
MSC Industrial Direct Co., Inc. - Class A |
|
|
7,299 |
|
|
|
585,307 |
|
United Rentals, Inc. (a) |
|
|
1,974 |
|
|
|
692,736 |
|
W.W. Grainger, Inc. |
|
|
1,631 |
|
|
|
641,081 |
|
WESCO International, Inc. (a) |
|
|
7,521 |
|
|
|
867,322 |
|
Total Trading Companies & Distributors |
|
|
|
|
|
|
3,836,349 |
|
Water Utilities - 1.7% |
|
|
|
|
|
|
|
|
American States Water Co. |
|
|
8,656 |
|
|
|
740,261 |
|
American Water Works Co., Inc. |
|
|
4,362 |
|
|
|
737,352 |
|
California Water Service Group (b) |
|
|
11,611 |
|
|
|
684,236 |
|
Middlesex Water Co. |
|
|
8,270 |
|
|
|
849,992 |
|
Total Water Utilities |
|
|
|
|
|
|
3,011,841 |
|
Wireless Telecommunication Services - 0.4% |
|
|
|
|
|
|
|
|
T-Mobile US, Inc. (a) |
|
|
5,193 |
|
|
|
663,458 |
|
Total United States |
|
|
|
|
|
|
176,553,775 |
|
TOTAL COMMON STOCKS (Cost $150,132,234) |
|
|
|
|
|
|
177,259,392 |
|
INVESTMENTS PURCHASED WITH PROCEEDS |
|
|
|
|
|
|
|
|
FROM SECURITIES LENDING COLLATERAL - 18.1% |
|
|
|
|
|
|
|
|
Mount Vernon Liquid Assets Portfolio, LLC, 0.09% (c) |
|
|
32,144,280 |
|
|
|
32,144,280 |
|
TOTAL INVESTMENTS PURCHASED WITH PROCEEDS FROM |
|
|
|
|
|
|
|
|
SECURITIES LENDING COLLATERAL (Cost $32,144,280) |
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
Schedule
of Investments |
|
|
Shares |
|
|
Value |
| ||
SHORT-TERM INVESTMENTS - 0.4% |
|
|
|
|
|
|
|
|
Money Market Funds - 0.4% |
|
|
|
|
|
|
|
|
First American Government Obligations Fund - Class X, 0.03% (c) |
|
|
736,522 |
|
|
$ |
736,522 |
|
TOTAL SHORT-TERM INVESTMENTS (Cost $736,522) |
|
|
|
|
|
|
|
|
Total Investments (Cost $183,013,036) - 118.0% |
|
|
|
|
|
|
210,140,194 |
|
Liabilities in Excess of Other Assets - (18.0)% |
|
|
|
|
|
|
(32,070,019 |
) |
TOTAL NET ASSETS - 100.0% |
|
|
|
|
|
$ |
178,070,175 |
|
Percentages are stated as a percent of net assets.
(a) |
Non-income producing security. |
(b) |
All or a portion of this security was out on loan at September 30, 2021. |
(c) |
The rate shown is the annualized seven-day yield at period end. |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s 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, doing business as U.S. Bank Global Fund Services (“Fund Services”).
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
|
|
Etho Climate Leadership U.S. ETF |
| |
ASSETS |
|
|
|
|
Investments in securities, at value* |
|
$ |
210,140,194 |
|
Receivables: |
|
|
|
|
Dividends and interest receivable |
|
|
134,538 |
|
Securities lending income receivable |
|
|
5,692 |
|
Total Assets |
|
|
210,280,424 |
|
LIABILITIES |
|
|
|
|
Collateral received for securities loaned (Note 7) |
|
|
32,144,280 |
|
Payables: |
|
|
|
|
Management fees payable |
|
|
65,969 |
|
Total Liabilities |
|
|
32,210,249 |
|
Net Assets |
|
$ |
178,070,175 |
|
NET ASSETS CONSIST OF: |
|
|
|
|
Paid-in capital |
|
$ |
155,882,529 |
|
Total distributable earnings |
|
|
22,187,646 |
|
Net Assets |
|
$ |
178,070,175 |
|
*Identified Cost: |
|
|
|
|
Investments in securities |
|
$ |
183,013,036 |
|
Shares Outstanding^ |
|
|
3,000,000 |
|
Net Asset Value, Offering and Redemption Price per Share |
|
$ |
59.36 |
|
^ No par value, unlimited number of shares authorized
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
STATEMENT
OF OPERATIONS |
|
|
Etho Climate Leadership U.S. ETF |
| |
INVESTMENT INCOME |
|
|
|
|
Income: |
|
|
|
|
Dividends from unaffiliated securities (net of foreign witholding tax of $687) |
|
$ |
1,674,859 |
|
Interest |
|
|
168 |
|
Securities lending income |
|
|
94,192 |
|
Total Investment Income |
|
|
1,769,219 |
|
Expenses: |
|
|
|
|
Management fees |
|
|
646,551 |
|
Total Expenses |
|
|
646,551 |
|
Net Investment Income |
|
|
1,122,668 |
|
REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS |
|
|
|
|
Net Realized Gain (Loss) on: |
|
|
|
|
Unaffiliated investments |
|
|
440,033 |
|
Affiliated investments |
|
|
(23,355 |
) |
In-Kind redemptions |
|
|
24,384,185 |
|
Net Realized Gain on Investments and In-Kind Redemptions |
|
|
24,800,863 |
|
Net Change in Unrealized Appreciation/Depreciation of: |
|
|
|
|
Unaffiliated investments |
|
|
9,190,245 |
|
Affiliated investments |
|
|
23,606 |
|
Net Change in Unrealized Appreciation/Depreciation of Investments |
|
|
9,213,851 |
|
Net Realized and Unrealized Gain on Investments |
|
|
34,014,714 |
|
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
|
$ |
35,137,382 |
|
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
STATEMENTS OF CHANGES IN NET ASSETS
|
|
Year
Ended September 30, |
|
|
Year
Ended September 30, |
| ||
OPERATIONS |
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
1,122,668 |
|
|
$ |
746,997 |
|
Net realized gain (loss) on investments and In-Kind Redemptions |
|
|
24,800,863 |
|
|
|
(4,238,356 |
) |
Net change in unrealized appreciation/depreciation of investments |
|
|
9,213,851 |
|
|
|
12,770,763 |
|
Net increase in net assets resulting from operations |
|
|
35,137,382 |
|
|
|
9,279,404 |
|
DISTRIBUTIONS
TO SHAREHOLDERS |
|
|
(1,179,000 |
) |
|
|
(660,500 |
) |
CAPITAL SHARE TRANSACTIONS |
|
|
|
|
|
|
|
|
Net increase in net assets derived from net change in outstanding shares |
|
|
53,551,110 |
|
|
|
28,510,725 |
|
Net increase in net assets |
|
|
87,509,492 |
|
|
|
37,129,629 |
|
NET ASSETS |
|
|
|
|
|
|
|
|
Beginning of Year |
|
|
90,560,683 |
|
|
|
53,431,054 |
|
End of Year |
|
$ |
178,070,175 |
|
|
$ |
90,560,683 |
|
Summary of share transactions is as follows:
|
|
Year
Ended |
|
|
Year
Ended |
| ||||||||||
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
| ||||
Shares Sold |
|
|
2,100,000 |
|
|
$ |
120,572,535 |
|
|
|
800,000 |
|
|
$ |
32,325,825 |
|
Shares Redeemed |
|
|
(1,150,000 |
) |
|
|
(67,021,425 |
) |
|
|
(100,000 |
) |
|
|
(3,815,100 |
) |
Net Transactions in Fund Shares |
|
|
950,000 |
|
|
$ |
53,551,110 |
|
|
|
700,000 |
|
|
$ |
28,510,725 |
|
Beginning Shares |
|
|
2,050,000 |
|
|
|
|
|
|
|
1,350,000 |
|
|
|
|
|
Ending Shares |
|
|
3,000,000 |
|
|
|
|
|
|
|
2,050,000 |
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
FINANCIAL
HIGHLIGHTS |
|
|
Year
Ended September 30, |
|
|
Year
Ended September 30, |
|
|
Year
Ended September 30, |
|
|
Year
Ended September 30, |
|
|
Year
Ended September 30, |
| |||||
Net Asset Value, Beginning of Year |
|
$ |
44.18 |
|
|
$ |
39.58 |
|
|
$ |
37.50 |
|
|
$ |
32.01 |
|
|
$ |
27.00 |
|
Income from Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income 1 |
|
|
0.47 |
|
|
|
0.41 |
|
|
|
0.33 |
|
|
|
0.29 |
|
|
|
0.31 |
|
Net realized and unrealized gain (loss) on investments |
|
|
15.17 |
|
|
|
4.54 |
|
|
|
2.08 |
|
|
|
5.51 |
|
|
|
5.09 |
|
Total from investment operations |
|
|
15.64 |
|
|
|
4.95 |
|
|
|
2.41 |
|
|
|
5.80 |
|
|
|
5.40 |
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From net investment income |
|
|
(0.46 |
) |
|
|
(0.35 |
) |
|
|
(0.33 |
) |
|
|
(0.29 |
) |
|
|
(0.25 |
) |
From net realized gains |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.02 |
) |
|
|
(0.14 |
) |
Total distributions |
|
|
(0.46 |
) |
|
|
(0.35 |
) |
|
|
(0.33 |
) |
|
|
(0.31 |
) |
|
|
(0.39 |
) |
Net asset value, end of year |
|
$ |
59.36 |
|
|
$ |
44.18 |
|
|
$ |
39.58 |
|
|
$ |
37.50 |
|
|
$ |
32.01 |
|
Total Return |
|
|
35.48 |
% |
|
|
12.59 |
% |
|
|
6.53 |
% |
|
|
18.16 |
% |
|
|
20.14 |
% |
Ratios/Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets at end of year (000’s) |
|
$ |
178,070 |
|
|
$ |
90,561 |
|
|
$ |
53,431 |
|
|
$ |
35,627 |
|
|
$ |
19,208 |
|
Expenses to Average Net Assets |
|
|
0.45 |
% |
|
|
0.45 |
% |
|
|
0.45 |
% |
|
|
0.45 |
% |
|
|
0.45 |
% |
Net Investment Income to Average Net Assets |
|
|
0.83 |
% |
|
|
1.00 |
% |
|
|
0.88 |
% |
|
|
0.82 |
% |
|
|
1.03 |
% |
Portfolio Turnover Rate |
|
|
45 |
% |
|
|
37 |
% |
|
|
41 |
% |
|
|
19 |
% |
|
|
45 |
% |
1 Calculated based on average shares outstanding during the year.
The accompanying notes are an integral part of these financial statements.
Etho Climate Leadership U.S. ETF
NOTE 1 – ORGANIZATION
Etho Climate Leadership U.S. ETF (the “Fund”) is a series of ETF Managers Trust (the “Trust”), an open-end management investment company consisting of multiple investment series, organized as a Delaware statutory trust on July 1, 2009. The Trust is registered with the SEC under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company and the offering of the Fund’s shares (“Shares”) is registered under the Securities Act of 1933, as amended (the “Securities Act”). The Fund seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Etho Climate Leadership Index – U.S. (“the Index”). The Fund commenced operations on November 18, 2015.
The Fund currently offers one class of shares, which has no front end sales load, no deferred sales charges, and no redemption fees. 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.
Shares of the Fund are listed and traded on the NYSE Arca, Inc. Market prices for the Shares may be different from their net asset value (“NAV”). The Fund issues and redeems Shares on a continuous basis at NAV only in blocks of 50,000 shares, called “Creation Units.” Creation Units are issued and redeemed principally in-kind for securities included in the Index. Once created, Shares generally trade in the secondary market at market prices that change throughout the day in quantities less than a Creation Unit. Except when aggregated in Creation Units, Shares are not redeemable securities of the Fund. Shares of the Fund 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 DTC 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 the Shares directly from the Fund. Rather, most retail investors may purchase Shares in the secondary market with the assistance of a broker and may be subject to customary brokerage commissions or fees.
Authorized Participants transacting in Creation Units for cash may pay an additional variable charge to compensate the relevant Fund for certain transaction costs (i.e., brokerage costs) and market impact expenses relating to investing in portfolio securities. Such variable charges, if any, are included in “Transaction Fees” in the Statements of Changes in Net Assets.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Fund. These policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standard Codification Topic 946 Financial Services – Investment Companies.
The Fund may invest in certain other investment companies (underlying funds). For specific investments in underlying funds, please refer to the complete schedule of portfolio holdings on Form N-CSR(S) for this reporting period, which is filed with the U.S. Securities and Exchange Commission (“SEC”). For more information about the underlying fund’s operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the SEC.
Etho Climate Leadership U.S. ETF
NOTES
TO FINANCIAL STATEMENTS |
A. |
Security Valuation. Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except for securities traded on NASDAQ), including securities traded over the counter, are valued at the last quoted sale price on the primary exchange or market (foreign or domestic) on which they are traded on the valuation date (or at approximately 4:00 pm Eastern Time if a security’s primary exchange is normally open at that time), or, if there is no such reported sale on the valuation date, at the most recent quoted bid price. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. |
Securities for which quotations are not readily available are valued at their respective fair values as determined in good faith by the Board of Trustees (the “Board”). When a security is “fair valued,” consideration is given to the facts and circumstances relevant to the particular situation, including a review of various factors set forth in the pricing procedures adopted by the Fund’s Board. The use of fair value pricing by the Fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated without regard to such considerations. As of September 30, 2021, the Fund did not hold any fair valued securities.
As described above, the Fund utilizes various methods to measure the fair value of its investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
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 availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Etho Climate Leadership U.S. ETF
NOTES
TO FINANCIAL STATEMENTS |
The following table presents a summary of the inputs used to value the Fund’s net assets as of September 30, 2021:
Etho Climate Leadership U.S. ETF |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Assets^ |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
| ||||
Common Stocks |
|
$ |
177,259,392 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
177,259,392 |
|
Short-Term Investments |
|
|
736,522 |
|
|
|
— |
|
|
|
— |
|
|
|
736,522 |
|
Investments Purchased with Securities Lending Collateral* |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
32,144,280 |
|
Total Investments in Securities |
|
$ |
177,995,914 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
210,140,194 |
|
^ See Schedule of Investments for classifications by sector or country.
* Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Schedule of Investments.
B. |
Federal Income Taxes. The Fund has elected to be taxed as a “regulated investment company” and intends to distribute substantially all taxable income to its shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. Therefore, no provisions for federal income taxes or excise taxes have been made. |
To avoid imposition of the excise tax applicable to regulated investment companies, the Fund intends to declare each year as dividends, in each calendar year, at least 98.0% of its net investment income (earned during the calendar year) and 98.2% of its net realized capital gains (earned during the twelve months ended October 31) plus undistributed amounts, if any, from prior years.
Net capital losses incurred after October 31, within the taxable year are deemed to arise on the first business day of the Fund’s next taxable year.
The Fund recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. The Fund has analyzed its tax position and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions expected to be taken in the Fund’s 2021 tax returns. The Fund identifies its major tax jurisdictions as U.S. Federal, the State of New Jersey, and the State of Delaware; however the Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
As of September 30, 2021, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the Fund, and has determined that no provision for income tax is required in the Fund’s financial statements.
C. |
Security Transactions and Investment Income. Investment securities transactions are accounted for on the trade date. Gains and losses realized on sales of securities are determined on a specific identification basis. Discounts/premiums on debt securities purchased are accreted/amortized over the life of the respective securities using the effective interest method. Dividend income is recorded on the ex-dividend date. Interest income is recorded on an accrual basis. Income, including gains, from investments in foreign securities received by the Fund may be subject to income, withholding or other taxes imposed by foreign countries. |
Etho Climate Leadership U.S. ETF
NOTES
TO FINANCIAL STATEMENTS |
D. |
Foreign Currency Translations and Transactions. The Fund may engage in foreign currency transactions. Foreign currency transactions are translated into U.S. dollars on the following basis: (i) market value of investment securities, assets and liabilities at the daily rates of exchange, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. For financial reporting purposes, the Fund does not isolate changes in the exchange rate of investment securities from the fluctuations arising from changes in the market prices of securities for unrealized gains and losses. However, for federal income tax purposes, the Fund does isolate and treat as ordinary income the effect of changes in foreign exchange rates on realized gains or losses from the sale of investment securities and payables and receivables arising from trade-date and settlement-date differences. |
E. |
Distributions to Shareholders. Distributions to shareholders from net investment income, if any, are declared and paid by the Fund on a quarterly basis. Distributions to shareholders from net realized gains on securities of the Fund normally are declared and paid on an annual basis. Distributions are recorded on the ex-dividend date. |
F. |
Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. |
G. |
Share Valuation. The net asset value (“NAV”) per share of the Fund is calculated by dividing the sum of the value of the securities held by the Fund, plus cash and other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding by the Fund, rounded to the nearest cent. The Fund’s shares will not be priced on the days on which the NYSE is closed for trading. The offering and redemption price per share for the Fund is equal to the Fund’s net asset value per share. |
H. |
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. However, based on experience, the Fund expects the risk of loss to be remote. |
NOTE 3 – RISK FACTORS
Investing in the Etho Climate Leadership U.S. ETF may involve certain risks, as discussed in the Fund’s prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. As with any investment whose performance is tied to these markets, the value of an investment in a fund will fluctuate, which means that an investor could lose money over short or long periods.
Investment Style Risk. The Fund is not actively managed. Therefore, the Fund follows the securities included in its respective index during upturns as well as downturns. Because of its indexing strategy, the Fund does not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of the Fund’s expenses, the Fund’s performance may be below that of its index.
Etho Climate Leadership U.S. ETF
NOTES
TO FINANCIAL STATEMENTS |
Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles which may cause stock prices to fall over short or extended periods of time.
Securities Lending Risk. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
Concentration Risk. To the extent that the Fund’s or its underlying index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector or asset class, the Fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more vulnerable to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector or asset class.
Natural Disaster/Epidemic Risk. Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis and other severe weather related phenomena generally, and widespread disease, including pandemics and epidemics (for example, the novel coronavirus COVID-19), have been and can be highly disruptive to economies and markets and have recently led, and may continue to lead, to increased market volatility and significant market losses. Such natural disaster and health crises could exacerbate political, social, and economic risks previously mentioned, and result in significant breakdowns, delays, shutdowns, social isolation, and other disruptions to important global, local and regional supply chains affected, with potential corresponding results on the operating performance of the Fund and its investments. A climate of uncertainty and panic, including the contagion of infectious viruses or diseases, may adversely affect global, regional, and local economies and reduce the availability of potential investment opportunities, and increases the difficulty of performing due diligence and modeling market conditions, potentially reducing the accuracy of financial projections. Under these circumstances, the Fund may have difficulty achieving its investment objective which may adversely impact performance. Further, such events can be highly disruptive to economies and markets, significantly disrupt the operations of individual companies (including, but not limited to, the Fund’s third party service providers), sectors, industries, markets, securities and commodity exchanges, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. These factors can cause substantial market volatility, exchange trading suspensions and closures and can impact the ability of the Fund to complete redemptions and otherwise affect Fund performance and Fund trading in the secondary market. A widespread crisis may also affect the global economy in ways that cannot necessarily be foreseen at the current time. How long such events will last and whether they will continue or recur cannot be predicted. Impacts from these events could have significant impact on the Fund’s performance, resulting in losses to the Fund.
NOTE 4 – MANAGEMENT AND CONTRACTS
ETF Managers Group, LLC (the “Advisor”), serves as the investment advisor to the Fund. Pursuant to an Investment Advisory Agreement (“Advisory Agreement”) between the Trust, on behalf of the Fund, and the Advisor, the Advisor provides investment advice to the Fund and oversees the day-today operations of the Fund, subject to the direction and control of the Board and the officers of the Trust. Under the Advisory Agreement, the Advisor is also responsible for arranging transfer agency, custody, fund administration and accounting, and other non-distribution related services necessary for the Fund to operate.
Under the Investment Advisory Agreement with the Fund, the Advisor has overall responsibility for the general management and administration of the Fund and arranges for sub-advisory, transfer agency, custody, fund administration, securities lending, and all other non-distribution related services necessary for the Fund to operate. The Advisor bears the costs of all advisory and non-advisory services required to operate the Fund, in exchange for a single unitary fee. For services provided the Fund pays the Advisor at an annual rate of 0.45% of the Fund’s average daily net assets. Under the Investment Advisory Agreement, the Advisor has agreed to pay all expenses of the Fund, except for: the fee paid to the Advisor 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 (12b-1) fees and expenses (collectively, “Excluded Expenses”). The Advisor has entered into an agreement with its affiliate, ETFMG Financial, LLC, to serve as distributor to the Fund (the “Distributor”). The Distributor provides marketing support for the Fund, including distributing marketing materials related to the Fund.
Etho Climate Leadership U.S. ETF
NOTES
TO FINANCIAL STATEMENTS |
The Advisor has entered into an Agreement with Etho Capital, LLC (“Etho”), under which Etho agrees to sublicense the use of the Underlying Index to the Advisor. Etho also provides marketing support for the Fund. Etho does not make investment decisions, provide investment advice, or otherwise act in the capacity of an investment Advisor to the Fund.
U.S. Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund Services (the “Administrator”) provides fund accounting, fund administration, and transfer agency services to the Fund. The Advisor compensates the Administrator for these services under an administration agreement between the two parties.
The Advisor pays each independent Trustee a quarterly fee for service to the Fund. Each Trustee is also reimbursed by the Advisor for all reasonable out-of-pocket expenses incurred in connection with his duties as Trustee, including travel and related expenses incurred in attending Board meetings.
NOTE 5 – DISTRIBUTION PLAN
The Fund has adopted a Plan of Distribution pursuant to Rule 12b- 1 under the 1940 Act. Under the Plan, the Fund may pay compensation to the Distributor or any other distributor or financial institution with which the Trust has an agreement with respect to the Fund, with the amount of such compensation not to exceed an annual rate of 0.25% of each Fund’s average daily net assets. For the year ended September 30, 2021, the Fund did not incur any 12b-1 expenses.
NOTE 6 - PURCHASES AND SALES OF SECURITIES
The costs of purchases and sales of securities, excluding short-term securities and in-kind transactions, for the year ended September 30, 2021:
|
|
Purchases |
|
|
Sales |
| ||
Etho Climate Leadership U.S. ETF |
|
$ |
63,492,922 |
|
|
$ |
66,919,631 |
|
The costs of purchases and sales of in-kind transactions associated with creations and redemptions for the year ended September 30, 2021:
|
|
Purchases In-Kind |
|
|
Sales In-Kind |
| ||
Etho Climate Leadership U.S. ETF |
|
$ |
118,985,516 |
|
|
$ |
64,821,075 |
|
Purchases in-kind are the aggregate of all in-kind purchases and sales in-kind are the aggregate of all proceeds from in- kind sales. Net capital gains or losses resulting from in-kind redemptions are excluded from the determination of the Fund’s taxable gains and are not distributed to shareholders. There were no purchases or sales of U.S. Government obligations for the year ended September 30, 2021.
Etho Climate Leadership U.S. ETF
NOTES
TO FINANCIAL STATEMENTS |
NOTE 7 — SECURITIES LENDING
The Fund may lend up to 33 1/3% of the value of the securities in its portfolio to brokers, dealers and financial institutions (but not individuals) under terms of participation in a securities lending program administered by U.S. Bank N.A. (“the Custodian”). The securities lending agreement requires that loans are collateralized at all times in an amount equal to at least 102% of the value of any loaned securities at the time of the loan, plus accrued interest. The Fund receives compensation in the form of fees and earn interest on the cash collateral. The amount of fees depends on a number of factors including the type of security and length of the loan. The Fund continues to receive interest payments or dividends on the securities loaned during the borrowing period. Gain or loss in the fair value of securities loaned that may occur during the term of the loan will be for the account of the Fund. The Fund has the right under the terms of the securities lending agreement to recall the securities from the borrower on demand. The cash collateral is invested by the Custodian in accordance with approved investment guidelines. Those guidelines require the cash collateral to be invested in readily marketable, high quality, short-term obligations either directly on behalf of the Fund or through one or more joint accounts, money market funds, or short-term bond funds, including those advised by or affiliated with the Advisor; however, such investments are subject to risk of payment delays or default on the part of the issuer or counterparty or otherwise may not generate sufficient interest to support the costs associated with securities lending. Other investment companies, in which the Fund may invest cash collateral, can be expected to incur fees and expenses for operations, such as investment advisory and administration fees, which would be in addition to those incurred by the Fund, and which may be received in full or in part by the Advisor. Pursuant to guidance issued by the SEC staff, fees and expenses of money market funds used for cash collateral received in connection with loans of securities are not treated as Acquired Fund Fees and Expenses, which reflect a fund’s pro rata share of the fees and expenses incurred by other investment companies in which the Fund invests (as disclosed in the Prospectus, as applicable). The Fund could also experience delays in recovering its securities and possible loss of income or value if the borrower fails to return the borrowed securities, although the Fund is indemnified from this risk by contract with the securities lending agent.
As of September 30, 2021, the value of the securities on loan and payable for collateral due to broker were as follows:
Value of Securities on Loan Collateral Received
Fund |
|
Values of Securities on Loan |
|
|
Fund |
| ||
Etho Climate Leadership U.S. ETF |
|
$ |
31,184,329 |
|
|
$ |
32,144,280 |
|
* The cash collateral received was invested in the Mount Vernon Liquid Assets Portfolio as shown on the Schedule of Investments, an investment with an overnight and continuous maturity.
NOTE 8 – FEDERAL INCOME TAXES
The components of distributable earnings (losses) and cost basis of investments for federal income tax purposes at September 30, 2021 were as follows:
|
|
Cost |
|
|
Gross Unrealized Appreciation |
|
|
Gross Unrealized Depreciation |
|
|
Net Unrealized Appreciation (Depreciation) |
| ||||
Etho Climate Leadership U.S. ETF |
|
$ |
183,876,941 |
|
|
$ |
34,421,633 |
|
|
$ |
(8,158,380 |
) |
|
$ |
26,263,253 |
|
Etho Climate Leadership U.S. ETF
NOTES
TO FINANCIAL STATEMENTS |
|
|
Undistributed
Ordinary |
|
|
Undistributed
Long-Term |
|
|
Total Distributable Earnings |
|
|
Other Accumulated (Loss) |
|
|
Total Accumulated Gain |
| |||||
Etho Climate Leadership U.S. ETF |
|
$ |
31,915 |
|
|
$ |
— |
|
|
$ |
31,915 |
|
|
$ |
(4,107,522 |
) |
|
$ |
22,187,646 |
|
As of September 30, 2021, the Fund had accumulated capital loss carryovers of:
|
|
Capital
Loss |
|
|
Capital Loss Carryover LT |
|
|
Expires |
| |||
Etho Climate Leadership U.S. ETF |
|
$ |
(4,107,522 |
) |
|
$ |
— |
|
|
|
Indefinite |
|
Under current tax law, capital and currency losses realized after October 31 of a Fund’s fiscal year may be deferred and treated as occurring on the first business day of the following fiscal year for tax purposes. The following Funds had deferred post-October capital and currency losses, which will be treated as arising on the first business day of the year ended September 30, 2021.
|
|
Late
Year |
|
|
Post-October |
| ||
Etho Climate Leadership U.S. ETF |
|
|
None |
|
|
|
None |
|
U.S. GAAP requires that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. For the fiscal year ended September 30, 2021, the following table shows the reclassifications made:
|
|
Total Distributable Earnings/(Loss) |
|
|
Paid-In Capital |
| ||
Etho Climate Leadership U.S. ETF |
|
$ |
(24,015,823 |
) |
|
$ |
24,015,823 |
|
The tax character of distributions paid by the Fund during the fiscal years ended September 30, 2021 and September 30, 2020 are as follows:
|
|
Year Ended September 30, 2021 |
|
|
Year Ended September 30, 2020 |
| ||||||||||
|
|
From
|
|
|
From
|
|
|
From
|
|
|
From |
| ||||
Etho Climate Leadership U.S. ETF |
|
$ |
1,179,000 |
|
|
$ |
— |
|
|
$ |
660,500 |
|
|
$ |
— |
|
Etho Climate Leadership U.S. ETF
NOTES
TO FINANCIAL STATEMENTS |
NOTE 9 – INVESTMENTS IN AFFILIATES
Etho Climate Leadership U.S. ETF owned the following company during the year ended September 30, 2021. ETFMG Sit Ultra Short ETF was deemed to be an affiliate of the Fund as defined by the 1940 Act during the year ended September 30, 2021, however was no longer held as of September 30, 2021. Transactions during the period in this security was as follows:
Security Name |
|
Value, at September 30, 2020 |
|
|
Purchases |
|
|
Sales |
|
|
Realized Gain (Loss) |
|
|
Change
in Unrealized |
|
|
Dividend |
|
|
Value,
at |
|
|
Ending Shares |
| ||||||||
ETFMG Sit Ultra Short ETF |
|
$ |
2,489,250 |
|
|
$ |
— |
|
|
$ |
2,489,501 |
|
|
$ |
(23,355 |
) |
|
$ |
23,606 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
NOTE 10 – LEGAL MATTERS
The Trust, a former and current trustee of the Trust, the Adviser and certain officers of the Adviser were defendants in an action filed May 2, 2017 in the Superior Court of New Jersey captioned PureShares, LLC d/b/a PureFunds et al. v. ETF Managers Group, LLC et al., Docket No. C-63-17. The PureShares action alleged claims based on disputes arising out of contractual relationships with the Adviser relating to certain series of the Trust. The action sought damages in unspecified amounts and injunctive relief based on breach of contract, wrongful termination, and several other claims. The PureShares action was dismissed without prejudice by way of stipulation filed on February 14, 2020.
The Adviser and its parent, Exchange Traded Managers Group, LLC (“ETFMG”), were defendants in a case filed on October 26, 2017 in the United States District Court for the Southern District of New York by NASDAQ, Inc. (“Nasdaq”) captioned Nasdaq, Inc. v. Exchange Traded Managers Group, LLC et al., Case 1:17-cv -08252. This action arose out of the same facts and circumstances, and relates to the same series of the Trust, as the New Jersey litigation and asserted claims for breach of contract, conversion and certain other claims. The matter was the subject of a bench trial in May 2019, and on December 20, 2019, the Court issued an Opinion and Order awarding compensatory damages to Plaintiff in the amount of $78,403,172.36, plus prejudgment interest (the “Judgment”). The Court also denied Plaintiff’s requests for punitive damages and equitable relief. ETFMG filed a Notice of Appeal from the Judgment in the United States Court of Appeals for the Second Circuit on January 19, 2021, Docket No. 20-300.
On October 28, 2021, Nasdaq and ETFMG entered into a Judgment Payment Agreement, which satisfied the Judgment. On November 1, 2021, Nasdaq recorded a Satisfaction of Judgment with the United States District Court for the Southern District of New York reflecting that the Judgment was paid in full, and ETFMG withdrew its appeal of the Judgment with prejudice before the United States Court of Appeals for the Second Circuit. PureShares is not a direct party to the Judgment Payment Agreement. ETFMG, however, believes PureShares’ claims in the New Jersey case, if reinstituted, would substantially overlap with those asserted on its behalf by Nasdaq that resulted in the Judgment, which has been satisfied.
The Adviser does not believe that the resolution of these matters will have a material adverse effect on the Fund’s financial statements.
NOTE 11 – SUBSEQUENT EVENTS
In preparing these financial statements, the Fund has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. Except as disclosed in Note 10, this evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments to the Financial Statements.
Etho Climate Leadership U.S. ETF
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of ETF Managers Trust
and the Shareholders of Etho Climate Leadership U.S. ETF:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Etho Climate Leadership U.S. ETF (the “Fund”) (a series of ETF Managers Trust) as of September 30, 2021, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, and the related notes (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, 2021, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. 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 audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, 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 and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of September 30, 2021 by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.
/s/WithumSmith+Brown, PC
We have served as the auditor for one or more series of the Trust since 2013.
New York, New York
November 29, 2021
Etho Climate Leadership U.S. ETF
Expense
Example |
As a shareholder of Etho Climate Leadership U.S. ETF (the “Fund”) you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares, and (2) ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (April 1, 2021 to September 30, 2021).
Actual Expenses
The first line of the table provides information about actual account values based on actual returns and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, 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 you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table provides information about hypothetical account values based on a hypothetical return and hypothetical expenses based on the 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 you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that 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 second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher.
Etho Climate Leadership U.S. ETF
|
|
Beginning Account Value April 1, 2021 |
|
|
Ending Account Value September 30, 2021 |
|
|
Expenses Paid During the Period^ |
|
|
Annualized Expense Ratio During Period April 1, 2021 to September 30, 2021 |
| ||||
Actual |
|
$ |
1,000.00 |
|
|
$ |
1,043.00 |
|
|
$ |
2.30 |
|
|
|
0.45 |
% |
Hypothetical (5% annual) |
|
$ |
1,000.00 |
|
|
$ |
1,022.81 |
|
|
$ |
2.28 |
|
|
|
0.45 |
% |
^ The dollar amounts shown as expenses paid during the period are equal to the annualized six-month expense ratio multiplied by the average account value during the period, multiplied by 183/365 (to reflect the period from April 1, 2021 to September 30, 2021).
Etho Climate Leadership U.S. ETF
NOTE 1 – FREQUENCY DISTRIBUTION OF PREMIUMS AND DISCOUNTS
Information regarding how often shares of the Fund traded on the Exchange at a price above (i.e., at a premium) or below (i.e., at a discount) the NAV is available on the Fund’s website at www.ethoetf.com.
NOTE 2 – FEDERAL TAX INFORMATION
Qualified Dividend Income/Dividends Received Deduction
For the fiscal year ended September 30, 2021, certain dividends paid by the Fund may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Reconciliation Act of 2003. The percentage of dividends declared from ordinary income designated as qualified dividend income was as follows:
Fund Name |
QDI |
Etho Climate Leadership U.S. ETF |
100.00% |
For corporate shareholders, the percent of ordinary income distributions qualifying for the corporate dividends received deduction for the fiscal year ended September 30, 2021 was as follows:
Fund Name |
DRD |
Etho Climate Leadership U.S. ETF |
100.00% |
Short Term Capital Gain
The percentage of taxable ordinary income distributions that are designated as short-term capital gain distributions under Internal Revenue Section 871 (k)(2)(C) for the Fund was as follows:
Fund Name |
Short-Term Capital Gain |
Etho Climate Leadership U.S. ETF |
0.00% |
NOTE 3 – INFORMATION ABOUT PORTFOLIO HOLDINGS
The Fund files a complete schedule of portfolio holdings with the SEC for its first and third fiscal quarters on Part F of Form N-PORT. Once filed, the Fund’s Part F of Form N-PORT is available without charge, upon request on the SEC’s website (www.sec.gov), the Fund’s website (www.ethoetf.com) and is available by calling (877) 756-7873. The Fund’s portfolio holdings are posted on the Fund’s website at www.ethoetf.com daily.
NOTE 4 - INFORMATION ABOUT PROXY VOTING
A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is provided in the Statement of Additional Information (“SAI”). The SAI is available without charge upon request by calling toll-free at 1-844-ETF-MGRS (1-844-383-6477), by accessing the SEC’s website at www.sec.gov, or by accessing the Fund’s website at www.ethoetf.com.
Information regarding how the Fund voted proxies relating to portfolio securities during the period ending June 30 is available by calling toll-free at 1-844-ETF-MGRS (1-844-383-6477) or by accessing the SEC’s website at www.sec.gov.
Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Fund’s prospectus, which may be obtained by calling 1-844-ETF-MGRS (1-844-383-6477) or by visiting www.ethoetf.com. Read the prospectus carefully before investing.
Etho Climate Leadership U.S. ETF
Set forth below are the names, birth years, positions with the Trust, length of term of office, and the principal occupations and other directorships held during at least the last five years of each of the persons currently serving as a Trustee of the Trust, as well as information about each officer. The business address of each Trustee and officer is 30 Maple Street, 2nd Floor, Summit, New Jersey 07901. The SAI includes additional information about Fund directors and is available, without charge, upon request by calling 1-844-ETF-MGRS (1-844-383-6477).
Name
and Year |
Position(s) |
Principal
Occupation(s) During |
Number
of |
Other |
Interested Trustee and Officers |
|
|
| |
Samuel Masucci, III (1962) |
Trustee, Chairman of the Board and President (since 2012); Secretary (since 2014) |
Chief Executive Officer, Exchange Traded Managers Group LLC (since 2013); Chief Executive Officer, ETF Managers Group LLC (since 2016); Chief Executive Officer, ETF Managers Capital LLC (commodity pool operator) (since 2014); Chief Executive Officer (2012-2016) and Chief Compliance Officer (2012-2014), Factor Advisors, LLC (investment adviser); President and Chief Executive Officer, Factor Capital Management LLC (2012-2014) (commodity pool operator). |
17 |
None |
John A. Flanagan, (1946) |
Treasurer (since 2015) |
President, John A. Flanagan CPA, LLC (accounting services) (since 2010); Treasurer, ETF Managers Trust (since 2015); Chief Financial Officer, ETF Managers Capital, LLC (commodity pool operator) (since 2015). |
n/a |
n/a |
Reshma A. Tanczos (1978) |
Chief Compliance Officer (since 2016) |
Chief Compliance Officer of ETFMG Financial LLC (since 2017); Chief Compliance Officer, ETF Managers Group LLC (since 2016); Chief Compliance Officer, ETF Managers Capital LLC (since 2016); Partner, Crow & Cushing (law firm) (2007-2016). |
n/a |
n/a |
Matthew J. Bromberg (1973) |
Assistant Secretary (since 2020) |
General Counsel and Secretary of Exchange Traded Managers Group LLC (since 2020); ETF Managers Group LLC (since 2020); ETFMG Financial LLC (since 2020); ETF Managers Capital LLC (since 2020); Partner of Dorsey & Whitney LLP (law firm) (2019-2020); General Counsel of WBI Investments, Inc. (2016-2019); Millington Securities, Inc. (2016-2019); and Partner of Reed Smith (law firm) (2015-2016). |
n/a |
n/a |
* Mr. Masucci is an interested Trustee by virtue of his role as the Chief Executive Officer of the Adviser. |
Etho Climate Leadership U.S. ETF
Board of Trustees (Continued) |
Name
and Year |
Position(s) |
Principal
Occupation(s) During |
Number
of |
Other |
Terry Loebs (1963) |
Trustee (since 2014); Lead Independent Trustee (since 2020) |
Founder and Managing Member, Pulsenomics LLC (index product development and consulting firm) (since 2011); Managing Director, MacroMarkets, LLC (exchange-traded products firm) (2006-2011). |
17 |
None |
|
|
|
|
|
Eric Wiegel (1960) |
Trustee (since 2020) |
Senior Portfolio Manager, Little House Capital (2019-present); Managing Partner, Global Focus Capital LLC (2013-present); Chief Investment Officer, Insight Financial Strategist LLC (2017-2018). |
17 |
None |
Etho Climate Leadership U.S. ETF
ETF MANAGERS TRUST
ETF Managers Trust, (the “Trust”) has adopted the following privacy policies in order to safeguard the personal information of the Trust’s customers and consumers in accordance with Regulation S-P as promulgated by the U.S. Securities and Exchange Commission.
Trust officers are responsible for ensuring that the following policies and procedures are implemented:
1) The Trust is committed to protecting the confidentiality and security of the information they collect and will handle personal customer and consumer information only in accordance with Regulation S-P and any other applicable laws, rules and regulations. The Trust will ensure: (a) the security and confidentiality of customer records and information; (b) that customer records and information are protected from any anticipated threats and hazards; and (c) that customer records and information are protected from unauthorized access or use.
2) The Trust conducts its business affairs through its trustees, officers and third parties that provide services pursuant to agreements with the Trust. The Trust has no employees. It is anticipated that the trustees and officers of the Trust who are not employees of service providers of the Trust will not have access to customer records and information in the performance of their normal responsibilities for the Trust.
3) The Trust may share customer information with its affiliates, subject to the customers’ right to prohibit such sharing.
4) The Trust may share customer information with unaffiliated third parties only in accordance with the requirements of Regulation S -P. Pursuant to this policy, the Trust will not share customer information with unaffiliated third parties other than as permitted by law, unless authorized to do so by the customer.
Consistent with these policies, the Trust has adopted the following procedures:
1) The Trust will determine that the policies and procedures of its affiliates and Service Providers are reasonably designed to safeguard customer information and only permit appropriate and authorized access to and use of customer information through the application of appropriate administrative, technical and physical protections.
2) The Trust will direct each of its Service Providers to adhere to the privacy policy of the Trust and to its privacy policies with respect to all customer information of the Trust and to take all actions reasonably necessary so that the Trust is in compliance with the provisions of Regulation S-P, including, as applicable, the development and delivery of privacy notices and the maintenance of appropriate and adequate records.
3) The Trust requires its Service Providers to provide periodic reports to the Trust’s Board of Trustees outlining their privacy policies and the implementation of such policies. Each Service Provider is required to promptly report to the Trust’s Board any material changes to its privacy policy before, or promptly after, the adoption of such changes.
(1) Generally, the Funds have institutional clients which are not considered “customers” for purposes of regulation S-P.
Advisor
ETF Managers Group, LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Distributor
ETFMG Financial LLC
30 Maple Street, Suite 2, Summit, NJ 07901
Custodian
U.S. Bank National Association
Custody Operations
1555 North River Center Drive, Suite 302, Milwaukee, Wisconsin 53212
Transfer Agent
U.S.
Bancorp Fund Services, LLC doing business as U.S. Bank Global Fund
Services
615 East Michigan Street, Milwaukee, Wisconsin 53202
Securities Lending Agent
U.S. Bank, National Association
Securities Lending
800 Nicolet Mall
Minneapolis, MN 55402-7020
Independent Registered Public Accounting Firm
WithumSmith + Brown, PC
1411 Broadway, 9th Floor, New York, NY 10018
Legal Counsel
Sullivan & Worcester LLP
1666 K Street NW, Washington, DC 20006