EXCHANGE TRADED CONCEPTS TRUST
ETC 6 Meridian Hedged Equity-Index Option Strategy ETF
ETC 6 Meridian Low Beta Equity Strategy ETF
ETC 6 Meridian Mega Cap Equity ETF
ETC 6 Meridian Small Cap Equity ETF
ETC 6 Meridian Quality Growth ETF
Annual Report
November 30, 2021
6 Meridian
Table of Contents
1 | ||
11 | ||
23 | ||
25 | ||
27 | ||
32 | ||
33 | ||
46 | ||
47 | ||
49 | ||
50 | ||
51 |
The Funds file their complete schedule of Fund holdings with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year as an exhibit to each Fund’s report on Form N-PORT within sixty days after the period end. Each Fund’s Form N-PORT reports are available on the Commission’s website at https://www.sec.gov.
Exchange Traded Concepts, LLC’s proxy voting policies and procedures are attached to the Funds’ Statement of Additional Information (the “SAI”). The SAI, as well as information relating to how each Fund voted proxies relating to its securities during the most recent 12-month period ended June 30, is available without charge, upon request, by calling 866-SIXM-ETF (749-6383) and on the Commission’s website at https://www.sec.gov.
6 Meridian
ETC 6 Meridian Hedged Equity-Index Option Strategy ETF
Management Discussion of Fund Performance
(Unaudited)
Dear Shareholders,
Thank you for your investment in the ETC 6 Meridian Hedged Equity-Index Option Strategy ETF (“SIXH” or the “Fund”). The following information pertains to the fiscal year December 1, 2020 through November 30, 2021.
The Fund is an actively managed exchange-traded fund that seeks capital appreciation by investing in a portfolio of equity securities, mainly common stocks, while selling call options against market indices or funds. The Fund may invest in securities of companies of any capitalization. The Fund’s sub-adviser, 6 Meridian LLC (the “Sub-Adviser”), employs a strategy pairing a portfolio of equity securities with an index call option writing overlay designed to reduce the exposure of the Fund to broad equity market risk with the goal of providing risk-adjusted returns. Pursuant to this investment strategy, the Sub-Adviser will sell (or write) call options on broad equity market indices or funds. In constructing the equity portfolio, the Sub-Adviser uses quantitatively-driven methods emphasizing high quality large-capitalization stocks.
The Fund saw positive performance derived from its holdings from its tilt towards higher momentum, higher value, and higher quality stocks; however, the Fund was negatively impacted relative to the S&P 500 Index by very strong performance in the lowest quality quintile that is pre-screened out of the investment universe for the Fund. For purposes of this model, quality is measured as gross profitability. Other factors that contributed to the lagging performance were the Fund’s tilt towards lower beta (high beta outperformed) and higher yielding securities (lower yielding outperformed). Beta is intended to measure the exposure of a security to broad market risk, and is defined here as the co-movement of the return of a security with the return of the securities included in the investable universe scaled by the volatility of the investable universe’s returns.
SIXH’s performance was further negatively impacted relative to the S&P 500® Index by its usage of writing covered calls in an upward market environment.
For the fiscal year ended November 30, 2021, the Fund’s net asset value increased 12.76%, and the market price increased 13.22%, while the Cboe S&P 500® BuyWrite Index, a broad equity market index that also writes options against its portfolio, increased 18.16% over the same period.
The Fund began trading on May 8, 2020, and had 8,350,000 shares outstanding as of November 30, 2021. We appreciate your investment in the ETC 6 Meridian Hedged Equity-Index Option Strategy ETF.
Sincerely,
J.
Garrett Stevens,
Chief Executive Officer
Exchange Traded Concepts, Adviser
to the Fund
The Cboe S&P 500® BuyWrite Index is a benchmark index designed to show the hypothetical performance of a portfolio that engages in a buy-write strategy using S&P 500® index call options.
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice.
1
6 Meridian
ETC 6 Meridian Hedged Equity-Index Option Strategy ETF
Management Discussion of Fund Performance
(Unaudited) (Concluded)
Growth of a $10,000 Investment‡
(at Net Asset Value)‡
AVERAGE ANNUAL
TOTAL RETURN | |||||
One
Year |
Annualized
| ||||
Net Asset Value |
Market Price |
Net Asset Value |
Market Price | ||
ETC 6 Meridian Hedged Equity-Index Option Strategy ETF |
12.76% |
13.22% |
12.19% |
12.24% | |
Cboe S&P 500® BuyWrite Index |
18.16% |
18.16% |
22.33% |
22.33% |
* Fund commenced operations on May 8, 2020.
‡ Unaudited
The performance data quoted herein represents past performance and the return and value of an investment in the Fund will fluctuate so that shares, when redeemed or sold in the market, may be worth more or less than their original cost. Past performance is no guarantee of future performance and should not be considered as a representation of the future results of the Fund. The Fund’s performance assumes the reinvestment of all dividends and all capital gains. Index returns assume reinvestment of dividends and, unlike the Fund’s returns, do not reflect any fees or expenses. If such fees and expenses were included in the Index returns, the performance would have been lower. Please note that one cannot invest directly in an unmanaged index.
Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. A prospectus, containing this and other information, is available at www.6meridianfunds.com. Investors should read the prospectus carefully before investing. There are risks associated with investing, including possible loss of principal.
Current performance may be lower or higher than the performance data shown above.
Performance data current to the most recent month-end is available at www.6meridianfunds.com.
There are no assurances that the Fund will meet its stated objective.
The Fund’s holdings and allocations are subject to change and should not be considered recommendations to buy individual securities.
Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
2
6 Meridian
ETC 6 Meridian Low Beta Equity Strategy ETF
Management Discussion of Fund Performance
(Unaudited)
Dear Shareholders,
Thank you for your investment in the ETC 6 Meridian Low Beta Equity Strategy ETF (“SIXL” or the “Fund”). The following information pertains to the fiscal year December 1, 2020, through November 30, 2021.
The Fund is an actively managed exchange-traded fund that seeks capital appreciation by investing in equity securities, mainly common stocks. The Fund may invest in equity securities of companies of any capitalization. The Fund may also invest in real estate investment trusts. The Fund’s sub-adviser, 6 Meridian LLC (the “Sub-Adviser”), uses a quantitatively driven strategy designed to emphasize high quality securities with a relatively low exposure to broad equity market risk. The Sub-Adviser believes that, when held over a full market cycle, high quality securities with lower relative exposure to broad market risk may produce higher risk-adjusted returns than securities of lower quality with higher relative exposure to broad market risk.
Beta is intended to measure the exposure of a security to broad market risk, and is defined here as the co-movement of the return of a security with the return of the securities included in the investable universe scaled by the volatility of the investable universe’s returns. Low beta stocks were largely out of favor during the fiscal year as investors were positioned to take advantage of the post-Covid recovery in higher growth and more cyclical equities. The Fund has a tilt towards more defensive stocks and industries while underweighting the higher growth technology space.
For the fiscal year ended November 30, 2021, the Fund’s market price increased 17.96%, and the net asset value increased 18.07% while the S&P 500® Index, a broad equity market index, increased 27.92% over the same period.
The Fund began trading on May 8, 2020, and had 4,075,000 shares outstanding as of November 30, 2021. We appreciate your investment in the ETC 6 Meridian Low Beta Equity Strategy ETF.
Sincerely,
J.
Garrett Stevens,
Chief Executive Officer
Exchange Traded Concepts, Adviser
to the Fund
3
6 Meridian
ETC 6 Meridian Low Beta Equity Strategy ETF
Management Discussion of Fund Performance
(Unaudited) (Concluded)
Growth of a $10,000 Investment‡
(at Net Asset Value)‡
AVERAGE
ANNUAL TOTAL RETURN | |||||
One
Year |
Annualized
| ||||
Net Asset Value |
Market Price |
Net Asset Value |
Market Price | ||
ETC 6 Meridian Low Beta Equity Strategy ETF |
17.96% |
18.07% |
20.02% |
20.08% | |
Equal Blend of the following 3 Indices: |
28.77% |
28.77% |
39.19% |
39.19% | |
S&P 500® Index |
27.92% |
27.92% |
34.89% |
34.89% | |
S&P SmallCap 600® Index |
31.42% |
31.42% |
44.48% |
44.48% | |
S&P MidCap 400® Index |
26.47% |
26.47% |
37.76% |
37.76% |
* Fund commenced operations on May 8, 2020.
‡ Unaudited
The performance data quoted herein represents past performance and the return and value of an investment in the Fund will fluctuate so that shares, when redeemed or sold in the market, may be worth more or less than their original cost. Past performance is no guarantee of future performance and should not be considered as a representation of the future results of the Fund. The Fund’s performance assumes the reinvestment of all dividends and all capital gains. Index returns assume reinvestment of dividends and, unlike the Fund’s returns, do not reflect any fees or expenses. If such fees and expenses were included in the Index returns, the performance would have been lower. Please note that one cannot invest directly in an unmanaged index.
Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. A prospectus, containing this and other information, is available at www.6meridianfunds.com. Investors should read the prospectus carefully before investing. There are risks associated with investing, including possible loss of principal.
Current performance may be lower or higher than the performance data shown above.
Performance data current to the most recent month-end is available at www.6meridianfunds.com.
There are no assurances that the Fund will meet its stated objective.
The Fund’s holdings and allocations are subject to change and should not be considered recommendations to buy individual securities.
Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
4
6 Meridian
ETC 6 Meridian Mega Cap Equity ETF
Management Discussion of Fund Performance
(Unaudited)
Dear Shareholders,
Thank you for your investment in the ETC 6 Meridian Mega Cap Equity ETF (“SIXA” or the “Fund”). The following information pertains to the fiscal year December 1, 2020 through November 30, 2021.
The Fund is an actively managed ETF that seeks capital appreciation by investing in mega capitalization equity securities, mainly common stocks. The Fund’s sub-adviser, 6 Meridian LLC (the “Sub-Adviser”), considers mega capitalization companies to be the largest 10% of stocks included in the Russell 3000 Index by market capitalization. In selecting investments for the Fund, the Sub-Adviser uses a quantitatively-driven strategy designed to emphasize high quality large-capitalization stocks.
The Fund saw positive performance from its tilt towards higher momentum, higher value, and higher quality stocks; however, the Fund was negatively impacted relative to the S&P 500® Index by very strong performance in the lowest quality quintile that is pre-screened out of the investment universe for the Fund. For purposes of this model, quality is measured as gross profitability. Other factors that contributed to the lagging performance were the Fund’s tilt towards lower beta (high beta outperformed) and higher yielding securities (lower yielding outperformed). Beta is intended to measure the exposure of a security to broad market risk, and is defined here as the co-movement of the return of a security with the return of the securities included in the investable universe scaled by the volatility of the investable universe’s returns.
For the fiscal year ended November 30, 2021, the Fund’s net asset value increased 20.59%, and the market price increased 20.60%, while the S&P 500® Index, a broad equity market index, increased 27.92%, over the same period.
The Fund began trading on May 8, 2020, and had 4,600,000 shares outstanding as of November 30, 2021. We appreciate your investment in the ETC 6 Meridian Mega Cap Equity ETF.
Sincerely,
J.
Garrett Stevens,
Chief Executive Officer
Exchange Traded Concepts, Adviser
to the Fund
The S&P 500® Index is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the S&P 500® Index proportionate to its market value.
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice.
5
6 Meridian
ETC 6 Meridian Mega Cap Equity ETF
Management Discussion of Fund Performance
(Unaudited) (Concluded)
Growth of a $10,000 Investment‡
(at Net Asset Value)‡
AVERAGE
ANNUAL TOTAL RETURN | |||||
One
Year |
Annualized Inception To Date* | ||||
Net
Asset |
Market
|
Net
Asset |
Market
| ||
ETC 6 Meridian Mega Cap Equity ETF |
20.59% |
20.60% |
23.89% |
23.84% | |
S&P 500® Index |
27.92% |
27.92% |
34.89% |
34.89% |
* Fund commenced operations on May 8, 2020.
‡ Unaudited
The performance data quoted herein represents past performance and the return and value of an investment in the Fund will fluctuate so that shares, when redeemed or sold in the market, may be worth more or less than their original cost. Past performance is no guarantee of future performance and should not be considered as a representation of the future results of the Fund. The Fund’s performance assumes the reinvestment of all dividends and all capital gains. Index returns assume reinvestment of dividends and, unlike the Fund’s returns, do not reflect any fees or expenses. If such fees and expenses were included in the Index returns, the performance would have been lower. Please note that one cannot invest directly in an unmanaged index.
Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. A prospectus, containing this and other information, is available at www.6meridianfunds.com. Investors should read the prospectus carefully before investing. There are risks associated with investing, including possible loss of principal.
Current performance may be lower or higher than the performance data shown above.
Performance data current to the most recent month-end is available at www.6meridianfunds.com.
There are no assurances that the Fund will meet its stated objective.
The Fund’s holdings and allocations are subject to change and should not be considered recommendations to buy individual securities.
Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
6
6 Meridian
ETC 6 Meridian Small Cap Equity ETF
Management Discussion of Fund Performance
(Unaudited)
Dear Shareholders,
Thank you for your investment in the ETC 6 Meridian Small Cap Equity ETF (“SIXS” or the “Fund”). The following information pertains to the fiscal year December 1, 2020, through November 30, 2021.
The Fund is an actively managed exchange-traded fund that seeks capital appreciation by investing in small-capitalization equity securities, mainly common stocks. The Fund’s sub-adviser, 6 Meridian LLC (the “Sub-Adviser”), considers small-capitalization securities to be those with market capitalizations within the range of the market capitalization of companies included in the S&P SmallCap 600® Index. The Fund may also invest in equity securities of companies of any capitalization and may also invest in real estate investment trusts. In selecting investments for the Fund, the Sub-Adviser uses a quantitatively-driven strategy designed to emphasize high quality small-capitalization securities.
Small-capitalization companies had a strong year on the expectations for strong economic growth on the heels of the fiscal stimulus measures taken by the U.S. Government. SIXS’s performance benefitted from its tilt towards high quality and value while being slowed by its lower beta exposure, a theme consistent with the beta factor during the fiscal year. Low beta stocks were largely out of favor during the fiscal year as investors were positioned to take advantage of the post-Covid recovery in higher growth and more cyclical equities. Beta is intended to measure the exposure of a security to broad market risk, and is defined here as the co-movement of the return of a security with the return of the securities included in the investable universe scaled by the volatility of the investable universe’s returns.
For the fiscal year ended November 30, 2021, the Fund’s net asset value increased 41.20%, and the market price increased 41.76%, while the S&P SmallCap 600® Index, a broad equity market index, increased 31.42% over the same period.
The Fund began trading on May 8, 2020, and had 1,275,000 shares outstanding as of November 30, 2021. We appreciate your investment in the ETC 6 Meridian Small Cap Equity ETF.
Sincerely,
J.
Garrett Stevens,
Chief Executive Officer
Exchange Traded Concepts, Adviser
to the Fund
The S&P SmallCap 600® Index seeks to measure the small-cap segment of the U.S. equity market. The index is designed to track companies that meet specific inclusion criteria to ensure that they are liquid and financially viable.
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice.
7
6 Meridian
ETC 6 Meridian Small Cap Equity ETF
Management Discussion of Fund Performance
(Unaudited) (Concluded)
Growth of a $10,000 Investment‡
(at Net Asset Value)‡
AVERAGE
ANNUAL TOTAL RETURN | |||||
One
Year |
Annualized
Inception | ||||
Net Asset Value |
Market Price |
Net Asset Value |
Market Price | ||
ETC 6 Meridian Small Cap Equity ETF |
41.20% |
41.76% |
49.78% |
50.05% | |
S&P SmallCap 600® Index |
31.42% |
31.42% |
44.48% |
44.48% |
* Fund commenced operations on May 8, 2020.
‡ Unaudited
The performance data quoted herein represents past performance and the return and value of an investment in the Fund will fluctuate so that shares, when redeemed or sold in the market, may be worth more or less than their original cost. Past performance is no guarantee of future performance and should not be considered as a representation of the future results of the Fund. The Fund’s performance assumes the reinvestment of all dividends and all capital gains. Index returns assume reinvestment of dividends and, unlike the Fund’s returns, do not reflect any fees or expenses. If such fees and expenses were included in the Index returns, the performance would have been lower. Please note that one cannot invest directly in an unmanaged index.
Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. A prospectus, containing this and other information, is available at www.6meridianfunds.com. Investors should read the prospectus carefully before investing. There are risks associated with investing, including possible loss of principal.
Current performance may be lower or higher than the performance data shown above.
Performance data current to the most recent month-end is available at www.6meridianfunds.com.
There are no assurances that the Fund will meet its stated objective.
The Fund’s holdings and allocations are subject to change and should not be considered recommendations to buy individual securities.
Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
8
6 Meridian
ETC 6 Meridian Quality Growth ETF
Management Discussion of Fund Performance
(Unaudited)
Dear Shareholders,
Thank you for your investment in the ETC 6 Meridian Quality Growth ETF (“SXQG” or the “Fund”). The information presented in this report relates to the operations of SXQG for the fiscal period May 11, 2021 (Commencement of Operations) through November 30, 2021.
The Fund is an actively managed exchange-traded fund that seeks capital appreciation by investing in equity securities. The Fund invests mainly in common stocks and may invest in the securities of companies of any capitalization. In selecting investments for the Fund, the Fund’s sub-adviser, 6 Meridian LLC (the “Sub-Adviser”), uses a quantitatively-driven strategy designed to emphasize securities of companies that exhibit high quality and growth characteristics relative to their peers. Quality is defined as high and improving profitability, low leverage and low default probability, and low net equity and debt issuance relative to dividends and net buybacks. From an initial universe consisting of companies in the broad U.S. equity market, the Sub-Adviser excludes micro-cap companies (i.e., companies with a market capitalization of less than $500 million) and securities of companies that exhibit poor liquidity and momentum characteristics.
With an inception date of May 11, 2021, this fund does not yet have a full year of performance under its belt. With that said, it has benefitted from its exposure to growth factors while simultaneously seeing some drag from its exclusion of the lowest quality that outperformed over the past year.
The Fund had positive performance during the fiscal year ended November 30, 2021. The net asset value for SXQG increased 10.30% and the market price increased 10.55%, while the S&P 500® Index, a broad equity market index, gained 11.27%, over the same period.
The Fund began trading on May 10, 2021, and had 950,000 shares outstanding as of November 30, 2021. We appreciate your investment in the ETC 6 Meridian Quality Growth ETF.
Sincerely,
J.
Garrett Stevens,
Chief Executive Officer
Exchange Traded Concepts, Adviser
to the Fund
The S&P 500® Index is a market-value weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation, with each stock’s weight in the S&P 500® Index proportionate to its market value.
This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice.
9
6 Meridian
ETC 6 Meridian Quality Growth ETF
Management Discussion of Fund Performance
(Unaudited)(Concluded)
Growth of a $10,000 Investment‡
(at Net Asset Value)‡
AVERAGE ANNUAL
TOTAL RETURN | |||
Cumulative Inception to Date* | |||
Net Asset
|
Market
| ||
ETC 6 Meridian Quality Growth ETF |
10.30% |
10.55% | |
S&P 500® Index |
11.27% |
11.27% |
* Fund commenced operations on May 10, 2021.
‡ Unaudited
The performance data quoted herein represents past performance and the return and value of an investment in the Fund will fluctuate so that shares, when redeemed or sold in the market, may be worth more or less than their original cost. Past performance is no guarantee of future performance and should not be considered as a representation of the future results of the Fund. The Fund’s performance assumes the reinvestment of all dividends and all capital gains. Index returns assume reinvestment of dividends and, unlike the Fund’s returns, do not reflect any fees or expenses. If such fees and expenses were included in the Index returns, the performance would have been lower. Please note that one cannot invest directly in an unmanaged index.
Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. A prospectus, containing this and other information, is available at www.6meridianfunds.com. Investors should read the prospectus carefully before investing. There are risks associated with investing, including possible loss of principal.
Current performance may be lower or higher than the performance data shown above.
Performance data current to the most recent month-end is available at www.6meridianfunds.com.
There are no assurances that the Fund will meet its stated objective.
The Fund’s holdings and allocations are subject to change and should not be considered recommendations to buy individual securities.
Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
10
Description |
Shares |
Fair Value | |||
COMMON STOCK — 96.8% |
|
||||
Communication Services — 6.3% |
|
||||
Alphabet, Cl C* |
2,258 |
$ |
6,433,132 | ||
AT&T |
255,972 |
|
5,843,841 | ||
Meta Platforms, Cl A*(A) |
9,840 |
|
3,192,686 | ||
|
15,469,659 | ||||
Consumer Discretionary — 7.9% |
|
||||
Home Depot(A) |
8,860 |
|
3,549,405 | ||
Lowe’s(A) |
14,010 |
|
3,426,706 | ||
McDonald’s |
12,957 |
|
3,169,282 | ||
NIKE, Cl B |
19,521 |
|
3,303,734 | ||
Target(A) |
12,589 |
|
3,069,702 | ||
Tesla* |
2,687 |
|
3,075,970 | ||
|
19,594,799 | ||||
Consumer Staples — 15.1% |
|
||||
Altria Group |
147,424 |
|
6,286,159 | ||
Coca-Cola |
57,805 |
|
3,031,872 | ||
Costco Wholesale(A) |
6,601 |
|
3,560,447 | ||
Kraft Heinz(A) |
176,804 |
|
5,942,382 | ||
Mondelez International, Cl A |
53,306 |
|
3,141,856 | ||
PepsiCo |
40,270 |
|
6,434,341 | ||
Philip Morris International(A) |
104,273 |
|
8,961,222 | ||
|
37,358,279 | ||||
Energy — 2.6% |
|
||||
Chevron |
56,701 |
|
6,399,842 | ||
Financials — 18.2% |
|
||||
American Express |
37,277 |
|
5,677,287 | ||
Bank of America |
67,855 |
|
3,017,512 |
Description |
Shares |
Fair Value | |||
Financials (continued) |
|
||||
Berkshire Hathaway, Cl B* |
11,343 |
$ |
3,138,495 | ||
Capital One Financial |
42,442 |
|
5,964,374 | ||
Goldman Sachs Group |
15,584 |
|
5,937,348 | ||
JPMorgan Chase |
19,122 |
|
3,037,147 | ||
MetLife |
151,850 |
|
8,907,521 | ||
US Bancorp |
106,845 |
|
5,912,803 | ||
Wells Fargo |
62,790 |
|
3,000,106 | ||
|
44,592,593 | ||||
Health Care — 23.0% |
|
||||
Abbott Laboratories |
25,181 |
|
3,167,014 | ||
AbbVie(A) |
28,280 |
|
3,260,118 | ||
CVS Health |
107,459 |
|
9,570,299 | ||
Eli Lilly(A) |
39,072 |
|
9,691,419 | ||
Gilead Sciences |
148,403 |
|
10,229,419 | ||
Johnson & Johnson(A) |
19,917 |
|
3,105,658 | ||
Merck |
73,930 |
|
5,538,096 | ||
Pfizer |
223,216 |
|
11,993,396 | ||
|
56,555,419 | ||||
Industrials — 2.5% |
|
||||
3M |
36,162 |
|
6,148,986 | ||
Information Technology — 14.8% |
|
||||
Accenture PLC, Cl A |
9,138 |
|
3,265,921 | ||
Adobe*(A) |
5,072 |
|
3,397,479 | ||
Apple |
21,797 |
|
3,603,044 | ||
Cisco Systems |
57,877 |
|
3,173,975 | ||
Intel |
65,527 |
|
3,223,928 | ||
International Business Machines(A) |
51,426 |
|
6,021,985 | ||
Kyndryl Holdings*(A) |
10,284 |
|
162,487 | ||
NVIDIA(A) |
12,572 |
|
4,108,027 | ||
Oracle |
68,807 |
|
6,243,547 | ||
Texas Instruments(A) |
17,319 |
|
3,331,656 | ||
|
36,532,049 | ||||
Materials — 3.9% |
|
||||
Dow |
113,057 |
|
6,210,221 | ||
DuPont de Nemours |
45,583 |
|
3,371,319 | ||
|
9,581,540 | ||||
Utilities — 2.5% |
|
||||
Duke Energy |
63,474 |
|
6,157,613 | ||
Total
Common Stock |
|
238,390,779 | |||
EXCHANGE TRADED FUND — 5.1% |
|
||||
SPDR S&P 500 ETF Trust(A) |
27,861 |
|
12,692,357 | ||
Total
Exchange Traded Fund |
|
12,692,357 |
The accompanying notes are an integral part of the financial statements.
11
ETC 6 Meridian
Hedged Equity-Index Option Strategy ETF
Schedule of Investments
November 30, 2021 (Concluded)
Description |
Shares |
Fair Value |
||||||
SHORT-TERM INVESTMENT — 0.1% |
|
|
||||||
Invesco
Government & Agency, |
363,835 |
$ |
363,835 |
|
||||
Total
Short-Term Investment |
|
363,835 |
|
|||||
Total
Investments — 102.0% |
$ |
251,446,971 |
|
|||||
WRITTEN OPTIONS(C)* — -1.2% |
|
|
||||||
Total
Written Options |
$ |
(2,912,335 |
) |
Percentages are based on Net Assets of $246,619,217.
Description |
Number
of |
Notional
|
Exercise
|
Expiration
|
Value | |||||||||||
WRITTEN OPTIONS — (1.2)% |
|
|
|
|
|
| ||||||||||
Call Options |
|
|
|
|
|
| ||||||||||
S&P 500 Index* |
(141 |
) |
$ |
(64,394,700 |
) |
$ |
4,730 |
01/22/22 |
$ |
(791,715 |
) | |||||
S&P 500 Index* |
(208 |
) |
|
(94,993,600 |
) |
|
4,700 |
01/22/22 |
|
(1,456,000 |
) | |||||
S&P 500 Index* |
(209 |
) |
|
(95,450,300 |
) |
|
4,675 |
12/18/21 |
|
(664,620 |
) | |||||
|
|
|
|
|
(2,912,335 |
) | ||||||||||
Total
Written Options |
|
|
|
|
$ |
(2,912,335 |
) |
* Non-income producing security.
(A) All or a portion of these securities has been pledged as collateral on written options with a fair value of $28,213,012.
(B) The rate reported is the 7-day effective yield as of November 30, 2021.
(C) Refer to table below for details on Options Contracts
Cl — Class
ETF — Exchange Traded Fund
PLC — Public Limited Company
SPDR — Standard & Poor’s Depository Receipt
S&P — Standard & Poor’s
As of November 30, 2021, all of the Fund’s investments were considered Level 1, in accordance with the authoritative guidance under U.S. GAAP.
For the year ended November 30, 2021, there have been no transfers in or out of Level 3.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
The accompanying notes are an integral part of the financial statements.
12
ETC 6 Meridian
Low Beta Equity Strategy ETF
Schedule of Investments
November 30, 2021
Description |
Shares |
Fair Value | |||
COMMON STOCK — 99.7% | |||||
Communication Services — 3.8% | |||||
AT&T |
20,713 |
$ |
472,878 | ||
Cable One |
293 |
|
519,214 | ||
Discovery, Cl A* |
20,353 |
|
473,614 | ||
Fox |
16,523 |
|
590,037 | ||
New York Times, Cl A |
12,400 |
|
589,000 | ||
QuinStreet* |
32,628 |
|
499,535 | ||
Shenandoah Telecommunications |
19,429 |
|
493,302 | ||
ViacomCBS, Cl B |
14,871 |
|
460,257 | ||
World Wrestling Entertainment, Cl A |
11,870 |
|
585,903 | ||
Ziff Davis* |
4,082 |
|
464,817 | ||
|
5,148,557 | ||||
Consumer Discretionary — 8.8% |
|
||||
AutoZone* |
350 |
|
635,975 | ||
Dollar General |
2,456 |
|
543,513 | ||
Domino’s Pizza |
1,073 |
|
562,402 | ||
Dorman Products* |
5,895 |
|
654,227 | ||
Grand Canyon Education* |
6,276 |
|
454,822 | ||
H&R Block |
23,213 |
|
549,684 | ||
Hasbro |
5,793 |
|
561,399 | ||
Helen of Troy* |
2,565 |
|
616,882 | ||
LGI Homes* |
3,627 |
|
521,055 | ||
McDonald’s |
2,456 |
|
600,738 | ||
Murphy USA |
3,834 |
|
664,547 | ||
Ollie’s Bargain Outlet Holdings* |
6,491 |
|
401,728 | ||
O’Reilly Automotive* |
950 |
|
606,252 | ||
Papa John’s International |
5,008 |
|
610,576 | ||
Service International |
9,092 |
|
601,526 |
Description |
Shares |
Fair Value | |||
Consumer Discretionary (continued) | |||||
Shutterstock |
5,501 |
$ |
627,169 | ||
Sturm Ruger |
7,536 |
|
540,256 | ||
Target |
2,212 |
|
539,374 | ||
Wendy’s |
25,810 |
|
531,170 | ||
Williams-Sonoma |
3,684 |
|
717,790 | ||
Yum! Brands |
4,319 |
|
530,546 | ||
|
12,071,631 | ||||
Consumer Staples — 16.4% |
|
||||
Altria Group |
12,265 |
|
522,980 | ||
BJ’s Wholesale Club Holdings* |
11,150 |
|
737,572 | ||
Boston Beer, Cl A* |
873 |
|
393,871 | ||
Casey’s General Stores |
2,989 |
|
580,733 | ||
Central Garden & Pet, Cl A* |
12,527 |
|
603,551 | ||
Coca-Cola |
10,283 |
|
539,343 | ||
Coca-Cola Consolidated |
1,494 |
|
852,432 | ||
Colgate-Palmolive |
7,371 |
|
552,972 | ||
Costco Wholesale |
1,326 |
|
715,218 | ||
Edgewell Personal Care |
14,032 |
|
595,799 | ||
elf Beauty* |
20,565 |
|
619,418 | ||
Flowers Foods |
25,435 |
|
656,732 | ||
Grocery Outlet Holding* |
17,538 |
|
507,900 | ||
Hain Celestial Group* |
14,559 |
|
574,061 | ||
Hershey |
3,235 |
|
574,180 | ||
J & J Snack Foods |
3,588 |
|
490,049 | ||
J M Smucker |
4,476 |
|
566,080 | ||
Kraft Heinz |
15,614 |
|
524,787 | ||
Kroger |
13,760 |
|
571,453 | ||
Lancaster Colony |
3,054 |
|
446,495 | ||
Molson Coors Beverage, Cl B |
12,011 |
|
533,769 | ||
Mondelez International, Cl A |
9,346 |
|
550,853 | ||
National Beverage* |
13,266 |
|
689,036 | ||
Nu Skin Enterprises, Cl A |
11,014 |
|
483,294 | ||
PepsiCo |
3,742 |
|
597,897 | ||
Philip Morris International |
5,797 |
|
498,194 | ||
Post Holdings* |
5,820 |
|
562,212 | ||
Procter & Gamble |
4,048 |
|
585,260 | ||
Sanderson Farms |
3,169 |
|
595,075 | ||
Simply Good Foods* |
16,054 |
|
593,516 | ||
Sprouts Farmers Market* |
24,380 |
|
645,095 | ||
Tootsie Roll Industries |
17,133 |
|
538,833 | ||
TreeHouse Foods* |
13,674 |
|
501,836 | ||
Tyson Foods, Cl A |
8,198 |
|
647,314 | ||
Universal |
11,280 |
|
525,309 | ||
USANA Health Sciences* |
6,075 |
|
605,799 | ||
Walgreens Boots Alliance |
12,395 |
|
555,296 | ||
Walmart |
4,036 |
|
567,583 | ||
WD-40 |
2,400 |
|
538,440 | ||
|
22,440,237 |
The accompanying notes are an integral part of the financial statements.
13
ETC 6 Meridian
Low Beta Equity Strategy ETF
Schedule of Investments
November 30, 2021 (Continued)
Description |
Shares |
Fair Value | |||
Energy — 0.4% |
|
||||
DT Midstream |
13,121 |
$ |
601,860 | ||
Financials — 7.9% |
|
||||
Allstate |
4,473 |
|
486,305 | ||
Aon PLC, Cl A |
2,222 |
|
657,201 | ||
Assurant |
3,705 |
|
563,531 | ||
B Riley Financial |
8,765 |
|
678,674 | ||
Brown & Brown |
10,740 |
|
691,763 | ||
Cboe Global Markets |
4,672 |
|
602,408 | ||
CME Group, Cl A |
2,764 |
|
609,517 | ||
Employers Holdings |
14,188 |
|
547,799 | ||
FactSet Research Systems |
1,605 |
|
752,055 | ||
HCI Group |
5,716 |
|
631,046 | ||
Horace Mann Educators |
14,801 |
|
548,673 | ||
KKR Real Estate Finance Trust‡ |
27,653 |
|
570,481 | ||
Mercury General |
9,812 |
|
500,608 | ||
Mr Cooper Group* |
15,169 |
|
595,687 | ||
Progressive |
6,050 |
|
562,287 | ||
RenaissanceRe Holdings |
3,782 |
|
582,844 | ||
Safety Insurance Group |
7,501 |
|
579,602 | ||
Stewart Information Services |
10,077 |
|
717,684 | ||
|
10,878,165 | ||||
Health Care — 19.3% |
|
||||
Abbott Laboratories |
4,745 |
|
596,779 | ||
AbbVie |
5,011 |
|
577,667 | ||
Amedisys* |
2,249 |
|
314,073 | ||
AmerisourceBergen, Cl A |
4,594 |
|
531,756 | ||
Bristol-Myers Squibb |
8,421 |
|
451,618 | ||
Cardiovascular Systems* |
15,204 |
|
304,080 | ||
Centene* |
8,349 |
|
596,202 | ||
Cerner |
7,202 |
|
507,381 | ||
Chemed |
1,216 |
|
566,036 | ||
Collegium Pharmaceutical* |
23,128 |
|
406,590 | ||
Computer Programs and Systems* |
17,128 |
|
504,762 | ||
Corcept Therapeutics* |
26,744 |
|
561,624 | ||
CorVel* |
3,744 |
|
703,871 | ||
CVS Health |
7,073 |
|
629,921 | ||
Danaher |
1,886 |
|
606,613 | ||
DaVita* |
4,311 |
|
407,390 | ||
Eli Lilly |
2,196 |
|
544,696 | ||
Encompass Health |
6,921 |
|
398,788 | ||
Glaukos* |
11,732 |
|
504,828 | ||
HealthStream* |
19,449 |
|
451,606 | ||
Hill-Rom Holdings |
4,195 |
|
652,323 | ||
Humana |
1,353 |
|
567,868 | ||
ICU Medical* |
3,023 |
|
683,833 |
Description |
Shares |
Fair Value | |||
Health Care (continued) |
|
||||
Innoviva* |
37,445 |
$ |
626,080 | ||
Invacare* |
82,763 |
|
226,771 | ||
Jazz Pharmaceuticals* |
3,757 |
|
450,352 | ||
Johnson & Johnson |
3,326 |
|
518,623 | ||
Laboratory Corp of America Holdings* |
1,920 |
|
547,834 | ||
LeMaitre Vascular |
10,434 |
|
488,207 | ||
LHC Group* |
2,678 |
|
307,220 | ||
Magellan Health* |
6,099 |
|
578,124 | ||
Masimo* |
2,062 |
|
573,483 | ||
Merit Medical Systems* |
8,739 |
|
549,334 | ||
Mesa Laboratories |
2,023 |
|
624,682 | ||
ModivCare* |
3,229 |
|
442,470 | ||
NeoGenomics* |
12,146 |
|
416,122 | ||
Neurocrine Biosciences* |
6,187 |
|
515,068 | ||
Omnicell* |
3,865 |
|
684,105 | ||
Pacira BioSciences* |
9,568 |
|
503,468 | ||
Penumbra* |
2,193 |
|
538,710 | ||
Pfizer |
12,765 |
|
685,864 | ||
Prestige Consumer Healthcare* |
10,846 |
|
606,834 | ||
Quidel* |
3,954 |
|
583,452 | ||
Repligen* |
2,284 |
|
654,366 | ||
STAAR Surgical* |
4,479 |
|
426,356 | ||
STERIS PLC |
2,664 |
|
582,164 | ||
Supernus Pharmaceuticals* |
21,224 |
|
636,083 | ||
Surmodics* |
10,538 |
|
462,934 | ||
United Therapeutics* |
2,799 |
|
530,411 | ||
Waters* |
1,460 |
|
478,982 | ||
|
26,308,404 | ||||
Industrials — 10.1% |
|
||||
3M |
2,918 |
|
496,177 | ||
AAON |
9,292 |
|
724,776 | ||
Aerojet Rocketdyne Holdings* |
12,398 |
|
521,212 | ||
Atlas Air Worldwide Holdings* |
8,566 |
|
750,468 | ||
CACI International, Cl A* |
2,282 |
|
592,019 | ||
Exponent |
5,192 |
|
604,868 | ||
Forrester Research* |
12,756 |
|
719,948 | ||
FTI Consulting* |
3,992 |
|
583,191 | ||
Hub Group, Cl A* |
9,108 |
|
707,418 | ||
Huntington Ingalls Industries |
2,876 |
|
510,519 | ||
JB Hunt Transport Services |
3,441 |
|
657,782 | ||
Knight-Swift Transportation Holdings, Cl A |
11,669 |
|
668,050 | ||
L3Harris Technologies |
2,513 |
|
525,418 | ||
Lockheed Martin |
1,593 |
|
530,979 | ||
ManTech International, Cl A |
6,953 |
|
472,456 | ||
Northrop Grumman |
1,612 |
|
562,265 |
The accompanying notes are an integral part of the financial statements.
14
ETC 6 Meridian
Low Beta Equity Strategy ETF
Schedule of Investments
November 30, 2021 (Continued)
Description |
Shares |
Fair Value | |||
Industrials (continued) |
|
||||
Republic Services, Cl A |
4,839 |
$ |
640,006 | ||
Science Applications International |
7,001 |
|
587,314 | ||
Toro |
5,070 |
|
509,839 | ||
Waste Management |
3,873 |
|
622,275 | ||
Watsco |
2,060 |
|
602,983 | ||
Watts Water Technologies, Cl A |
3,695 |
|
697,284 | ||
Werner Enterprises |
12,773 |
|
576,190 | ||
|
13,863,437 | ||||
Information Technology — 7.1% |
|
||||
Alarm.com Holdings* |
6,865 |
|
547,758 | ||
Aspen Technology* |
3,961 |
|
574,464 | ||
Consensus Cloud Solutions* |
1,360 |
|
85,190 | ||
CSG Systems International |
12,970 |
|
683,649 | ||
EVERTEC |
12,812 |
|
537,976 | ||
ExlService Holdings* |
5,020 |
|
651,947 | ||
International Business Machines |
4,038 |
|
472,850 | ||
Kyndryl Holdings* |
806 |
|
12,735 | ||
NETGEAR* |
16,881 |
|
451,398 | ||
NortonLifeLock |
23,818 |
|
591,877 | ||
Oracle |
6,405 |
|
581,190 | ||
OSI Systems* |
5,991 |
|
544,762 | ||
Qualys* |
5,548 |
|
722,849 | ||
Sailpoint Technologies Holdings* |
11,434 |
|
601,314 | ||
SPS Commerce* |
5,136 |
|
724,125 | ||
TTM Technologies* |
41,145 |
|
566,978 | ||
Vonage Holdings* |
40,312 |
|
831,233 | ||
Vontier |
17,924 |
|
564,785 | ||
|
9,747,080 | ||||
Materials — 3.9% |
|
||||
AptarGroup |
4,548 |
|
543,895 | ||
Balchem |
4,406 |
|
696,147 | ||
NewMarket |
1,826 |
|
604,954 | ||
Royal Gold |
4,863 |
|
486,446 | ||
RPM International |
6,803 |
|
619,345 | ||
Sealed Air |
9,949 |
|
618,033 | ||
Sherwin-Williams |
1,945 |
|
644,262 | ||
Silgan Holdings |
14,603 |
|
605,586 | ||
Stepan |
5,027 |
|
566,593 | ||
|
5,385,261 | ||||
Real Estate — 10.9% |
|
||||
Apartment Income‡ |
11,136 |
|
565,263 | ||
Camden Property Trust‡ |
3,895 |
|
643,493 | ||
CareTrust‡ |
25,333 |
|
511,980 | ||
Centerspace‡ |
6,286 |
|
642,366 |
Description |
Shares |
Fair Value | |||
Real Estate (continued) |
|
||||
Community Healthcare Trust‡ |
11,894 |
$ |
511,799 | ||
CoreSite Realty‡ |
4,140 |
|
708,147 | ||
Crown Castle International‡ |
2,956 |
|
536,957 | ||
Duke Realty‡ |
11,378 |
|
663,679 | ||
EastGroup Properties‡ |
3,321 |
|
676,488 | ||
Extra Space Storage‡ |
3,282 |
|
656,400 | ||
First Industrial Realty Trust‡ |
10,569 |
|
638,473 | ||
Four Corners Property Trust‡ |
20,434 |
|
552,127 | ||
Getty Realty‡ |
18,626 |
|
568,652 | ||
Healthcare Realty Trust‡ |
18,760 |
|
587,563 | ||
Independence Realty Trust‡ |
29,118 |
|
713,391 | ||
Industrial Logistics Properties Trust‡ |
21,727 |
|
481,470 | ||
Lexington Realty Trust‡ |
44,204 |
|
665,270 | ||
Life Storage‡ |
4,861 |
|
642,333 | ||
LTC Properties‡ |
16,221 |
|
515,179 | ||
Mid-America Apartment Communities‡ |
3,030 |
|
624,938 | ||
National Storage Affiliates Trust‡ |
10,553 |
|
647,743 | ||
Physicians Realty Trust‡ |
31,148 |
|
555,369 | ||
Public Storage‡ |
1,880 |
|
615,474 | ||
Safehold‡ |
6,276 |
|
448,985 | ||
SBA Communications, Cl A‡ |
1,652 |
|
567,958 | ||
|
14,941,497 | ||||
Utilities — 11.1% |
|
||||
Alliant Energy |
9,626 |
|
527,409 | ||
American States Water |
6,391 |
|
601,905 | ||
American Water Works |
3,269 |
|
551,055 | ||
Avista |
13,486 |
|
519,346 | ||
California Water Service Group |
8,925 |
|
562,364 | ||
Chesapeake Utilities |
4,528 |
|
576,686 | ||
DTE Energy |
4,897 |
|
530,541 | ||
Duke Energy |
5,404 |
|
524,242 | ||
Essential Utilities |
11,579 |
|
547,339 | ||
FirstEnergy |
15,165 |
|
571,114 | ||
Hawaiian Electric Industries |
13,257 |
|
503,633 | ||
IDACORP |
5,434 |
|
568,505 | ||
Middlesex Water |
5,393 |
|
555,695 | ||
National Fuel Gas |
11,127 |
|
643,252 | ||
NiSource |
22,846 |
|
559,955 | ||
NorthWestern |
9,313 |
|
515,009 | ||
OGE Energy |
16,915 |
|
580,523 | ||
ONE Gas |
7,812 |
|
506,530 | ||
Pinnacle West Capital |
7,377 |
|
479,874 | ||
PNM Resources |
11,994 |
|
590,584 | ||
PPL |
20,290 |
|
564,671 | ||
Public Service Enterprise Group |
9,115 |
|
569,596 |
The accompanying notes are an integral part of the financial statements.
15
ETC 6 Meridian
Low Beta Equity Strategy ETF
Schedule of Investments
November 30, 2021 (Concluded)
Description |
Shares |
Fair Value | |||
Utilities (continued) |
|
||||
Sempra Energy |
4,408 |
$ |
528,387 | ||
South Jersey Industries |
22,816 |
|
536,176 | ||
Southern |
9,009 |
|
550,450 | ||
Southwest Gas Holdings |
8,014 |
|
527,401 | ||
Spire |
7,909 |
|
473,354 | ||
Unitil |
11,488 |
|
476,063 | ||
|
15,241,659 | ||||
Total
Common Stock |
|
136,627,788 | |||
SHORT-TERM INVESTMENT — 0.4% |
|
||||
Invesco Government & Agency, CI Institutional, 0.03%(A) |
508,082 |
|
508,082 | ||
Total
Short-Term Investment |
|
508,082 | |||
Total
Investments — 100.1% |
$ |
137,135,870 |
Percentages are based on Net Assets of $137,049,051.
‡ Real Estate Investment Trust
* Non-income producing security.
(A) The rate reported is the 7-day effective yield as of November 30, 2021.
Cl — Class
PLC — Public Limited Company
As of November 30, 2021, all of the Fund’s investments were considered Level 1, in accordance with the authoritative guidance under U.S. GAAP.
For the year ended November 30, 2021, there have been no transfers in or out of Level 3.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
The accompanying notes are an integral part of the financial statements.
16
ETC 6 Meridian
Mega Cap Equity ETF
Schedule of Investments
November 30, 2021
Description |
Shares |
Fair Value | |||
COMMON STOCK — 99.7% |
|
||||
Communication Services — 6.5% |
|
||||
Alphabet, Cl C* |
1,500 |
$ |
4,273,560 | ||
AT&T |
169,989 |
|
3,880,849 | ||
Meta Platforms, Cl A* |
6,534 |
|
2,120,022 | ||
|
10,274,431 | ||||
Consumer Discretionary — 8.2% |
|
||||
Home Depot |
5,883 |
|
2,356,790 | ||
Lowe’s |
9,304 |
|
2,275,665 | ||
McDonald’s |
8,604 |
|
2,104,538 | ||
NIKE, Cl B |
12,963 |
|
2,193,858 | ||
Target |
8,360 |
|
2,038,502 | ||
Tesla* |
1,783 |
|
2,041,107 | ||
|
13,010,460 | ||||
Consumer Staples — 15.6% |
|
||||
Altria Group |
97,903 |
|
4,174,584 | ||
Coca-Cola |
38,387 |
|
2,013,398 | ||
Costco Wholesale |
4,383 |
|
2,364,103 | ||
Kraft Heinz |
117,415 |
|
3,946,318 | ||
Mondelez International, Cl A |
35,400 |
|
2,086,476 | ||
PepsiCo |
26,743 |
|
4,272,997 | ||
Philip Morris International |
69,245 |
|
5,950,915 | ||
|
24,808,791 | ||||
Energy — 2.7% |
|
||||
Chevron |
37,654 |
|
4,250,007 |
Description |
Shares |
Fair Value | |||
Financials — 18.6% |
|
||||
American Express |
24,755 |
$ |
3,770,187 | ||
Bank of America |
45,062 |
|
2,003,907 | ||
Berkshire Hathaway, Cl B* |
7,532 |
|
2,084,029 | ||
Capital One Financial |
28,185 |
|
3,960,838 | ||
Goldman Sachs Group |
10,349 |
|
3,942,866 | ||
JPMorgan Chase |
12,699 |
|
2,016,982 | ||
MetLife |
100,840 |
|
5,915,274 | ||
US Bancorp |
70,954 |
|
3,926,594 | ||
Wells Fargo |
41,698 |
|
1,992,330 | ||
|
29,613,007 | ||||
Health Care — 23.6% |
|
||||
Abbott Laboratories |
16,722 |
|
2,103,126 | ||
AbbVie |
18,781 |
|
2,165,074 | ||
CVS Health |
71,360 |
|
6,355,322 | ||
Eli Lilly |
25,947 |
|
6,435,894 | ||
Gilead Sciences |
98,550 |
|
6,793,051 | ||
Johnson & Johnson |
13,226 |
|
2,062,330 | ||
Merck |
49,096 |
|
3,677,781 | ||
Pfizer |
148,232 |
|
7,964,505 | ||
|
37,557,083 | ||||
Industrials — 2.6% |
|
||||
3M |
24,015 |
|
4,083,511 | ||
Information Technology — 15.3% |
|
||||
Accenture PLC, Cl A |
6,067 |
|
2,168,346 | ||
Adobe* |
3,368 |
|
2,256,055 | ||
Apple |
14,475 |
|
2,392,718 | ||
Cisco Systems |
38,435 |
|
2,107,775 | ||
Intel |
43,516 |
|
2,140,987 | ||
International Business Machines |
34,151 |
|
3,999,082 | ||
Kyndryl Holdings* |
6,830 |
|
107,914 | ||
NVIDIA |
8,348 |
|
2,727,793 | ||
Oracle |
45,694 |
|
4,146,273 | ||
Texas Instruments |
11,501 |
|
2,212,447 | ||
|
24,259,390 | ||||
Materials — 4.0% |
|
||||
Dow |
75,081 |
|
4,124,199 | ||
DuPont de Nemours |
30,271 |
|
2,238,843 | ||
|
6,363,042 | ||||
Utilities — 2.6% |
|
||||
Duke Energy |
42,153 |
|
4,089,263 | ||
Total
Common Stock |
|
158,308,985 |
The accompanying notes are an integral part of the financial statements.
17
ETC 6 Meridian
Mega Cap Equity ETF
Schedule of Investments
November 30, 2021 (Concluded)
Description |
Shares |
Fair Value | |||
SHORT-TERM INVESTMENT — 0.3% |
|
||||
Invesco Government & Agency, CI Institutional, 0.03%(A) |
432,923 |
$ |
432,923 | ||
Total
Short-Term Investment |
|
432,923 | |||
Total
Investments — 100.0% |
$ |
158,741,908 |
Percentages are based on Net Assets of $158,680,253.
* Non-income producing security.
(A) The rate reported is the 7-day effective yield as of November 30, 2021.
Cl — Class
PLC — Public Limited Company
As of November 30, 2021, all of the Fund’s investments were considered Level 1, in accordance with the authoritative guidance under U.S. GAAP.
For the year ended November 30, 2021, there have been no transfers in or out of Level 3.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
The accompanying notes are an integral part of the financial statements.
18
ETC 6 Meridian
Small Cap Equity ETF
Schedule of Investments
November 30, 2021
Description |
Shares |
Fair Value | |||
COMMON STOCK — 99.8% |
|
||||
Communication Services — 1.1% |
|
||||
EW Scripps, Cl A |
35,798 |
$ |
663,337 | ||
Consumer Discretionary — 18.6% |
|
||||
Asbury Automotive Group* |
3,481 |
|
569,631 | ||
Buckle |
16,567 |
|
779,312 | ||
Century Communities |
9,684 |
|
688,242 | ||
Conn’s* |
30,368 |
|
664,452 | ||
Dorman Products* |
6,873 |
|
762,766 | ||
Genesco* |
12,745 |
|
805,484 | ||
Group 1 Automotive |
4,128 |
|
803,928 | ||
Haverty Furniture |
18,732 |
|
560,274 | ||
La-Z-Boy, Cl Z |
20,008 |
|
668,067 | ||
M* |
10,796 |
|
603,388 | ||
Sally Beauty Holdings* |
36,637 |
|
717,719 | ||
Shoe Carnival |
21,360 |
|
835,176 | ||
Shutterstock |
6,416 |
|
731,488 | ||
Signet Jewelers |
10,896 |
|
1,058,437 | ||
Sturm Ruger |
8,788 |
|
630,012 | ||
Zumiez* |
16,846 |
|
770,873 | ||
|
11,649,249 | ||||
Consumer Staples — 5.9% |
|
||||
Coca-Cola Consolidated |
1,743 |
|
994,503 | ||
J & J Snack Foods |
4,184 |
|
571,451 | ||
National Beverage* |
15,459 |
|
802,940 | ||
USANA Health Sciences* |
7,083 |
|
706,317 | ||
WD-40 |
2,799 |
|
627,956 | ||
|
3,703,167 |
Description |
Shares |
Fair Value | |||
Energy — 1.8% |
|
||||
Dorian LPG* |
51,310 |
$ |
631,626 | ||
Helix Energy Solutions Group* |
167,621 |
|
509,568 | ||
|
1,141,194 | ||||
Financials — 23.3% |
|
||||
American Equity Investment Life Holding |
21,325 |
|
717,160 | ||
Axos Financial* |
14,363 |
|
813,089 | ||
BankUnited |
16,850 |
|
667,934 | ||
Banner |
12,810 |
|
733,757 | ||
Cadence Bank |
25,152 |
|
734,941 | ||
Customers Bancorp* |
17,841 |
|
1,028,355 | ||
Encore Capital Group* |
14,366 |
|
838,113 | ||
Enova International* |
21,252 |
|
810,126 | ||
First Financial Bancorp |
30,151 |
|
693,473 | ||
Flagstar Bancorp |
14,438 |
|
671,945 | ||
Great Western Bancorp |
21,903 |
|
734,846 | ||
Hilltop Holdings |
21,133 |
|
719,156 | ||
Meta Financial Group |
13,990 |
|
836,182 | ||
Piper Sandler |
5,151 |
|
853,778 | ||
S&T Bancorp |
23,396 |
|
699,774 | ||
Safety Insurance Group |
8,739 |
|
675,263 | ||
Stewart Information Services |
23,615 |
|
1,681,859 | ||
Virtus Investment Partners |
2,360 |
|
701,817 | ||
|
14,611,568 | ||||
Health Care — 11.1% |
|
||||
Cardiovascular Systems* |
17,716 |
|
354,320 | ||
CorVel* |
4,368 |
|
821,183 | ||
HealthStream* |
22,678 |
|
526,583 | ||
LeMaitre Vascular |
12,156 |
|
568,779 | ||
Magellan Health* |
7,107 |
|
673,673 | ||
Mesa Laboratories |
2,360 |
|
728,745 | ||
ModivCare* |
3,766 |
|
516,055 | ||
NeoGenomics* |
14,152 |
|
484,848 | ||
Omnicell* |
4,508 |
|
797,916 | ||
Prestige Consumer Healthcare* |
12,649 |
|
707,712 | ||
Supernus Pharmaceuticals* |
24,728 |
|
741,098 | ||
|
6,920,912 | ||||
Industrials — 10.7% |
|
||||
ABM Industries |
14,399 |
|
647,955 | ||
Aerojet Rocketdyne Holdings* |
14,445 |
|
607,268 | ||
ArcBest |
10,306 |
|
1,062,342 | ||
Atlas Air Worldwide Holdings* |
9,989 |
|
875,137 | ||
Boise Cascade |
12,801 |
|
829,889 | ||
Hub Group, Cl A* |
10,623 |
|
825,088 | ||
Kelly Services, Cl A |
31,228 |
|
526,504 |
The accompanying notes are an integral part of the financial statements.
19
ETC 6 Meridian
Small Cap Equity ETF
Schedule of Investments
November 30, 2021 (Concluded)
Description |
Shares |
Fair Value | |||
Industrials (continued) |
|
||||
ManTech International, Cl A |
8,102 |
$ |
550,531 | ||
Matson |
9,598 |
|
782,525 | ||
|
6,707,239 | ||||
Information Technology — 9.8% |
|
||||
Alarm.com Holdings* |
8,003 |
|
638,559 | ||
Bel Fuse, Cl B |
49,828 |
|
599,929 | ||
CSG Systems International |
15,125 |
|
797,239 | ||
EVERTEC |
14,940 |
|
627,331 | ||
ExlService Holdings* |
5,855 |
|
760,389 | ||
NETGEAR* |
19,686 |
|
526,404 | ||
Sanmina* |
17,720 |
|
647,489 | ||
SPS Commerce* |
5,990 |
|
844,530 | ||
TTM Technologies* |
47,943 |
|
660,654 | ||
|
6,102,524 | ||||
Materials — 3.8% |
|
||||
AdvanSix |
19,212 |
|
870,111 | ||
Balchem |
5,137 |
|
811,646 | ||
Koppers Holdings* |
22,695 |
|
685,389 | ||
|
2,367,146 | ||||
Real Estate — 7.6% |
|
||||
CareTrust‡ |
29,518 |
|
596,559 | ||
Centerspace‡ |
7,330 |
|
749,053 | ||
Community Healthcare Trust‡ |
13,860 |
|
596,396 | ||
Getty Realty‡ |
21,718 |
|
663,051 | ||
Independence Realty Trust‡ |
33,930 |
|
831,284 | ||
Lexington Realty Trust‡ |
51,545 |
|
775,752 | ||
Safehold‡ |
7,319 |
|
523,601 | ||
|
4,735,696 | ||||
Utilities — 6.1% |
|
||||
American States Water |
7,448 |
|
701,452 | ||
Avista |
15,727 |
|
605,647 | ||
California Water Service Group |
10,409 |
|
655,871 | ||
Chesapeake Utilities |
5,282 |
|
672,716 | ||
Middlesex Water |
6,284 |
|
647,503 | ||
Unitil |
13,386 |
|
554,716 | ||
|
3,837,905 | ||||
Total Common Stock (Cost $55,791,670) |
|
62,439,937 |
Description |
Shares |
Fair Value | |||
SHORT-TERM INVESTMENT — 0.2% |
|
||||
Invesco Government & Agency, CI Institutional, 0.03%(A) |
138,111 |
$ |
138,111 | ||
Total
Short-Term Investment |
|
138,111 | |||
Total
Investments — 100.0% |
$ |
62,578,048 |
Percentages are based on Net Assets of $62,572,123.
‡ Real Estate Investment Trust
* Non-income producing security.
(A) The rate reported is the 7-day effective yield as of November 30, 2021.
Cl — Class
As of November 30, 2021, all of the Fund’s investments were considered Level 1, in accordance with the authoritative guidance under U.S. GAAP.
For the year ended November 30, 2021, there have been no transfers in or out of Level 3.
For more information on valuation inputs, see Note 2 — Significant Accounting Policies in the Notes to Financial Statements.
The accompanying notes are an integral part of the financial statements.
20
ETC 6 Meridian
Quality Growth ETF
Schedule of Investments
November 30, 2021
Description |
Shares |
Fair Value | |||
COMMON STOCK — 98.8% |
|
||||
Communication Services — 9.1% |
|
||||
Alphabet, Cl A* |
437 |
$ |
1,240,184 | ||
Meta Platforms, Cl A* |
3,309 |
|
1,073,638 | ||
|
2,313,822 | ||||
Consumer Discretionary — 24.7% |
|
||||
Acushnet Holdings |
357 |
|
19,414 | ||
Best Buy |
2,398 |
|
256,250 | ||
Crocs* |
649 |
|
106,449 | ||
Deckers Outdoor* |
290 |
|
117,566 | ||
iRobot* |
286 |
|
21,710 | ||
Lowe’s |
5,686 |
|
1,390,738 | ||
Lululemon Athletica* |
1,353 |
|
614,817 | ||
NIKE, Cl B |
6,901 |
|
1,167,924 | ||
NVR* |
27 |
|
141,085 | ||
O’Reilly Automotive* |
737 |
|
470,324 | ||
Pool |
423 |
|
234,393 | ||
Revolve Group, Cl A* |
845 |
|
64,364 | ||
Shutterstock |
248 |
|
28,274 | ||
Skyline Champion* |
573 |
|
44,837 | ||
Sleep Number* |
235 |
|
18,748 | ||
Sturm Ruger |
168 |
|
12,044 | ||
Target |
4,158 |
|
1,013,887 | ||
Tempur Sealy International |
2,091 |
|
89,578 | ||
Wayfair, Cl A* |
1,033 |
|
256,019 | ||
Williams-Sonoma |
808 |
|
157,431 | ||
XPEL* |
174 |
|
12,509 | ||
YETI Holdings* |
852 |
|
78,520 | ||
|
6,316,881 |
Description |
Shares |
Fair Value | |||
Consumer Staples — 8.6% |
|
||||
Costco Wholesale |
2,455 |
$ |
1,324,178 | ||
Hershey |
2,218 |
|
393,673 | ||
Lancaster Colony |
205 |
|
29,971 | ||
Medifast |
130 |
|
26,746 | ||
Monster Beverage* |
3,844 |
|
322,050 | ||
Nu Skin Enterprises, Cl A |
498 |
|
21,852 | ||
Sprouts Farmers Market* |
1,261 |
|
33,366 | ||
WD-40 |
136 |
|
30,512 | ||
|
2,182,348 | ||||
Energy — 0.3% |
|
||||
Texas Pacific Land |
57 |
|
68,900 | ||
Financials — 8.1% |
|
||||
Blackstone, Cl A |
8,683 |
|
1,228,210 | ||
Cohen & Steers |
244 |
|
21,904 | ||
FactSet Research Systems |
396 |
|
185,554 | ||
Houlihan Lokey, Cl A |
726 |
|
78,800 | ||
Moelis, Cl A |
771 |
|
47,270 | ||
PJT Partners |
385 |
|
29,291 | ||
T Rowe Price Group |
2,371 |
|
474,081 | ||
|
2,065,110 | ||||
Health Care — 15.1% |
|
||||
ABIOMED* |
458 |
|
144,169 | ||
Amedisys* |
461 |
|
64,379 | ||
Blueprint Medicines* |
571 |
|
54,930 | ||
Chemed |
165 |
|
76,806 | ||
Corcept Therapeutics* |
1,119 |
|
23,499 | ||
CorVel* |
90 |
|
16,920 | ||
Edwards Lifesciences* |
6,663 |
|
715,007 | ||
Globus Medical, Cl A* |
1,069 |
|
66,941 | ||
HealthEquity* |
858 |
|
46,915 | ||
Inari Medical* |
317 |
|
26,165 | ||
Intuitive Surgical* |
2,859 |
|
927,288 | ||
Karuna Therapeutics* |
211 |
|
26,987 | ||
Masimo* |
550 |
|
152,966 | ||
Mettler-Toledo International* |
242 |
|
366,419 | ||
ModivCare* |
126 |
|
17,266 | ||
NuVasive* |
552 |
|
26,529 | ||
Seagen* |
1,454 |
|
232,640 | ||
STAAR Surgical* |
432 |
|
41,122 | ||
Veeva Systems, Cl A* |
1,652 |
|
466,822 | ||
West Pharmaceutical Services |
798 |
|
353,243 | ||
|
3,847,013 |
The accompanying notes are an integral part of the financial statements.
21
ETC 6 Meridian
Quality Growth ETF
Schedule of Investments
November 30, 2021 (Concluded)
Description |
Shares |
Fair Value | |||
Industrials — 9.1% |
|
||||
AAON |
402 |
$ |
31,356 | ||
Copart* |
2,321 |
|
336,916 | ||
Expeditors International of Washington |
1,837 |
|
223,416 | ||
Exponent |
536 |
|
62,444 | ||
Fastenal |
6,208 |
|
367,327 | ||
Graco |
1,840 |
|
134,117 | ||
Healthcare Services Group |
773 |
|
13,528 | ||
Landstar System |
400 |
|
67,420 | ||
Old Dominion Freight Line |
1,113 |
|
395,304 | ||
Robert Half International |
1,148 |
|
127,623 | ||
Rollins |
2,632 |
|
87,593 | ||
Simpson Manufacturing |
460 |
|
53,066 | ||
Toro |
1,142 |
|
114,840 | ||
Watts Water Technologies, Cl A |
343 |
|
64,728 | ||
WW Grainger |
468 |
|
225,300 | ||
|
2,304,978 | ||||
Information Technology — 23.2% |
|
||||
Accenture PLC, Cl A |
3,359 |
|
1,200,508 | ||
Adobe* |
1,904 |
|
1,275,394 | ||
Arista Networks* |
2,464 |
|
305,684 | ||
Aspen Technology* |
722 |
|
104,712 | ||
Badger Meter |
306 |
|
31,322 | ||
Cadence Design Systems* |
2,953 |
|
524,039 | ||
EPAM Systems* |
555 |
|
337,745 | ||
Extreme Networks* |
1,273 |
|
17,186 | ||
Manhattan Associates* |
653 |
|
101,972 | ||
Maximus |
663 |
|
50,023 | ||
Nuance Communications* |
3,053 |
|
169,411 | ||
SPS Commerce* |
380 |
|
53,576 | ||
Texas Instruments |
5,605 |
|
1,078,234 | ||
Ubiquiti |
63 |
|
18,855 | ||
Wix.com* |
633 |
|
96,722 | ||
Zoom Video Communications, Cl A* |
2,533 |
|
535,502 | ||
|
5,900,885 |
Description |
Shares |
Fair Value | |||
Materials — 0.5% |
|
||||
Balchem |
327 |
$ |
51,666 | ||
Louisiana-Pacific |
991 |
|
64,762 | ||
|
116,428 | ||||
Real Estate — 0.1% |
|
||||
eXp World Holdings |
691 |
|
25,367 | ||
Total
Common Stock |
|
25,141,732 | |||
SHORT-TERM INVESTMENT — 1.3% |
|
||||
Invesco Government & Agency, CI Institutional, 0.03%(A) |
330,368 |
|
330,368 | ||
Total
Short-Term Investment |
|
330,368 | |||
Total
Investments — 100.1% |
$ |
25,472,100 |
Percentages are based on Net Assets of $25,442,509.
* Non-income producing security.
(A) The rate reported is the 7-day effective yield as of November 30, 2021.
Cl — Class
PLC — Public Limited Company
As of November 30, 2021, all of the Fund’s investments were considered Level 1, in accordance with the authoritative guidance under U.S. GAAP.
For the year ended November 30, 2021, there have been no transfers in or out of Level 3.
For more information on valuation inputs, see Note 2 – Significant Accounting Policies in the Notes to Financial Statements.
The accompanying notes are an integral part of the financial statements.
22
ETC |
ETC |
ETC | |||||||||
Assets: |
|
|
|
|
| ||||||
Investments, at Cost |
$ |
241,398,352 |
|
$ |
129,074,264 |
$ |
152,737,724 |
| |||
Investments at Fair Value |
$ |
251,446,971 |
|
$ |
137,135,870 |
$ |
158,741,908 |
| |||
Receivable for Investment Securities Sold |
|
1,748,195 |
|
|
— |
|
— |
| |||
Dividends Receivable |
|
742,986 |
|
|
168,173 |
|
492,401 |
| |||
Reclaims Receivable |
|
— |
|
|
229 |
|
— |
| |||
Total Assets |
|
253,938,152 |
|
|
137,304,272 |
|
159,234,309 |
| |||
|
|
|
|
| |||||||
Liabilities: |
|
|
|
|
| ||||||
Options Written, at Value(Premium Received $4,488,799, $— and $—, respectively) |
|
2,912,335 |
|
|
— |
|
— |
| |||
Deposits from Broker |
|
2,661,928 |
|
|
— |
|
— |
| |||
Payable for Investment Securities Purchased |
|
943,168 |
|
|
— |
|
— |
| |||
Income Distributions Payable |
|
569,136 |
|
|
121,199 |
|
399,381 |
| |||
Advisory Fees Payable |
|
126,918 |
|
|
71,153 |
|
82,511 |
| |||
Payable Due to Administrator |
|
14,564 |
|
|
8,165 |
|
9,469 |
| |||
Payable for Trustees’ Fee |
|
8,530 |
|
|
4,198 |
|
5,504 |
| |||
Chief Compliance Officer Fees Payable |
|
2,559 |
|
|
1,259 |
|
1,651 |
| |||
Due to Custodian |
|
2,481 |
|
|
26 |
|
— |
| |||
Audit Expenses |
|
17,000 |
|
|
17,000 |
|
17,000 |
| |||
Other Accrued Expenses |
|
60,316 |
|
|
32,221 |
|
38,540 |
| |||
|
|
|
|
| |||||||
Total Liabilities |
|
7,318,935 |
|
|
255,221 |
|
554,056 |
| |||
|
|
|
|
| |||||||
Net Assets |
$ |
246,619,217 |
|
$ |
137,049,051 |
$ |
158,680,253 |
| |||
|
|
|
|
| |||||||
Net Assets Consist of: |
|
|
|
|
| ||||||
Paid-in Capital |
$ |
278,655,324 |
|
$ |
132,045,819 |
$ |
158,909,789 |
| |||
Total Distributable Earnings/(Accumulated Loss) |
|
(32,036,107 |
) |
|
5,003,232 |
|
(229,536 |
) | |||
|
|
|
|
| |||||||
Net Assets |
$ |
246,619,217 |
|
$ |
137,049,051 |
$ |
158,680,253 |
| |||
|
|
|
|
| |||||||
Outstanding
Shares of Beneficial Interest |
|
8,350,000 |
|
|
4,075,000 |
|
4,600,000 |
| |||
Net Asset Value, Offering and Redemption Price Per Share |
$ |
29.54 |
|
$ |
33.63 |
$ |
34.50 |
|
Amounts designated as “—” are $0.
The accompanying notes are an integral part of the financial statements.
23
6 Meridian
Statements of Assets and Liabilities
November 30, 2021 (Concluded)
ETC |
ETC | |||||
Assets: |
|
|
||||
Investments, at Cost |
$ |
55,929,781 |
$ |
24,555,092 | ||
Investments at Fair Value |
$ |
62,578,048 |
$ |
25,472,100 | ||
Cash and Cash Equivalents |
|
— |
|
275 | ||
Dividends Receivable |
|
143,336 |
|
9,472 | ||
Deferred Offering Costs |
|
— |
|
21,061 | ||
Total Assets |
|
62,721,384 |
|
25,502,908 | ||
|
|
|||||
Liabilities: |
|
|
||||
Income Distributions Payable |
|
73,165 |
|
— | ||
Advisory Fees Payable |
|
33,045 |
|
29,002 | ||
Audit Expenses |
|
17,000 |
|
17,000 | ||
Transfer Agent Fees Payable |
|
8,025 |
|
— | ||
Payable Due to Administrator |
|
3,792 |
|
1,404 | ||
Payable for Trustees’ Fee |
|
1,924 |
|
677 | ||
Chief Compliance Officer Fees Payable |
|
577 |
|
203 | ||
Other Accrued Expenses |
|
11,733 |
|
12,113 | ||
|
|
|||||
Total Liabilities |
|
149,261 |
|
60,399 | ||
|
|
|||||
Net Assets |
$ |
62,572,123 |
$ |
25,442,509 | ||
|
|
|||||
Net Assets Consist of: |
|
|
||||
Paid-in Capital |
$ |
57,368,669 |
$ |
24,706,225 | ||
Total Distributable Earnings |
|
5,203,454 |
|
736,284 | ||
|
|
|||||
Net Assets |
$ |
62,572,123 |
$ |
25,442,509 | ||
|
|
|||||
Outstanding
Shares of Beneficial Interest |
|
1,275,000 |
|
950,000 | ||
Net Asset Value, Offering and Redemption Price Per Share |
$ |
49.08 |
$ |
26.78 |
Amounts designated as “—” are $0.
The accompanying notes are an integral part of the financial statements.
24
ETC |
ETC |
ETC | ||||||||||
Investment Income: |
|
|
|
|
|
| ||||||
Dividend Income |
$ |
5,927,892 |
|
$ |
1,793,012 |
|
$ |
3,751,160 |
| |||
Less: Foreign Taxes Withheld |
|
— |
|
|
(64 |
) |
|
— |
| |||
|
|
|
|
|
| |||||||
Total Investment Income |
|
5,927,892 |
|
|
1,792,948 |
|
|
3,751,160 |
| |||
|
|
|
|
|
| |||||||
Expenses: |
|
|
|
|
|
| ||||||
Advisory Fees |
|
1,415,111 |
|
|
749,300 |
|
|
887,118 |
| |||
Interest Expense on Broker Account |
|
89,761 |
|
|
— |
|
|
— |
| |||
Chief Compliance Officer Fees |
|
14,270 |
|
|
7,436 |
|
|
8,985 |
| |||
Administration Fees |
|
162,390 |
|
|
85,985 |
|
|
101,800 |
| |||
Trustees’ Fees |
|
47,565 |
|
|
24,786 |
|
|
29,950 |
| |||
Transfer Agent Fees |
|
37,157 |
|
|
34,107 |
|
|
41,587 |
| |||
Printing Fees |
|
13,940 |
|
|
8,260 |
|
|
8,825 |
| |||
Custodian Fees |
|
29,851 |
|
|
15,556 |
|
|
18,033 |
| |||
Pricing Fees |
|
2,040 |
|
|
3,066 |
|
|
1,439 |
| |||
Offering Costs |
|
51,559 |
|
|
27,766 |
|
|
32,668 |
| |||
Legal Fees |
|
14,316 |
|
|
7,573 |
|
|
9,174 |
| |||
Audit Fees |
|
17,500 |
|
|
17,500 |
|
|
17,500 |
| |||
Registration Fees |
|
23,122 |
|
|
12,392 |
|
|
13,898 |
| |||
Other Fees |
|
21,311 |
|
|
12,192 |
|
|
15,101 |
| |||
Total Expenses |
|
1,939,893 |
|
|
1,005,919 |
|
|
1,186,078 |
| |||
|
|
|
|
|
| |||||||
Net Investment Income |
|
3,987,999 |
|
|
787,029 |
|
|
2,565,082 |
| |||
|
|
|
|
|
| |||||||
Net Realized Gain (Loss) on: |
|
|
|
|
|
| ||||||
Investments(1) |
|
52,448,917 |
|
|
18,088,315 |
|
|
30,886,423 |
| |||
Purchased Options |
|
170,649 |
|
|
— |
|
|
— |
| |||
Written Options |
|
(26,075,133 |
) |
|
— |
|
|
— |
| |||
|
|
|
|
|
| |||||||
Net Unrealized Appreciation (Depreciation) on: |
|
|
|
|
|
| ||||||
Investments |
|
(12,657,666 |
) |
|
(1,643,112 |
) |
|
(7,036,859 |
) | |||
Written Options |
|
9,017,522 |
|
|
— |
|
|
— |
| |||
Net Realized and Unrealized Gain on Investments |
|
22,904,289 |
|
|
16,445,203 |
|
|
23,849,564 |
| |||
|
|
|
|
|
| |||||||
Net Increase in Net Assets Resulting from Operations |
$ |
26,892,288 |
|
$ |
17,232,232 |
|
$ |
26,414,646 |
|
(1) Includes realized gains as a result of in-kind transactions (see Note 4 in Notes to Financial Statements).
Amounts designated as “—” are $0.
The accompanying notes are an integral part of the financial statements.
25
6 Meridian
Statements of Operations
For the year ended November 30, 2021 (Concluded)
ETC |
ETC | |||||||
Investment Income: |
|
|
|
| ||||
Dividend Income |
$ |
918,225 |
|
$ |
67,212 |
| ||
Less: Foreign Taxes Withheld |
|
(75 |
) |
|
— |
| ||
|
|
|
| |||||
Total Investment Income |
|
918,150 |
|
|
67,212 |
| ||
|
|
|
| |||||
Expenses: |
|
|
|
| ||||
Advisory Fees |
|
319,308 |
|
|
50,305 |
| ||
Chief Compliance Officer Fees |
|
3,209 |
|
|
475 |
| ||
Administration Fees |
|
36,643 |
|
|
5,773 |
| ||
Trustees’ Fees |
|
10,697 |
|
|
1,585 |
| ||
Transfer Agent Fees |
|
33,516 |
|
|
15,057 |
| ||
Printing Fees |
|
3,400 |
|
|
632 |
| ||
Custodian Fees |
|
8,727 |
|
|
2,365 |
| ||
Pricing Fees |
|
1,182 |
|
|
502 |
| ||
Offering Costs |
|
12,060 |
|
|
26,986 |
| ||
Legal Fees |
|
3,384 |
|
|
553 |
| ||
Audit Fees |
|
17,500 |
|
|
17,000 |
| ||
Registration Fees |
|
4,552 |
|
|
1,853 |
| ||
Other Fees |
|
6,708 |
|
|
1,930 |
| ||
Total Expenses |
|
460,886 |
|
|
125,016 |
| ||
Less: Reimbursement From Advisor |
|
— |
|
|
(42,622 |
) | ||
|
|
|
| |||||
Net Investment Income (Loss) |
|
457,264 |
|
|
(15,182 |
) | ||
|
|
|
| |||||
Net Realized Gain on: |
|
|
|
| ||||
Investments(1) |
|
14,570,660 |
|
|
333,599 |
| ||
|
|
|
| |||||
Net Unrealized Appreciation on: |
|
|
|
| ||||
Investments |
|
248,109 |
|
|
917,008 |
| ||
Net Realized and Unrealized Gain on Investments |
|
14,818,769 |
|
|
1,250,607 |
| ||
|
|
|
| |||||
Net Increase in Net Assets Resulting from Operations |
$ |
15,276,033 |
|
$ |
1,235,425 |
|
(*) Commenced operations on May 10, 2021.
(1) Includes realized gains as a result of in-kind transactions (see Note 4 in Notes to Financial Statements).
Amounts designated as “—” are $0.
The accompanying notes are an integral part of the financial statements.
26
ETC 6
Meridian Hedged | ||||||||
Year
ended |
Period
Ended | |||||||
Operations: |
|
|
|
| ||||
Net Investment Income |
$ |
3,987,999 |
|
$ |
1,739,740 |
| ||
Net Realized Gain on Investments(2) |
|
52,448,917 |
|
|
4,649,180 |
| ||
Net Realized Loss on Purchased and Written Options |
|
(25,904,484 |
) |
|
(8,891,980 |
) | ||
Net Change in Unrealized Appreciation (Depreciation) on Investments |
|
(12,657,666 |
) |
|
22,706,285 |
| ||
Net Change in Unrealized Gain/(Loss) on Purchased and Written Options |
|
9,017,522 |
|
|
(7,441,058 |
) | ||
|
|
|
| |||||
Net Increase in Net Assets Resulting from Operations |
|
26,892,288 |
|
|
12,762,167 |
| ||
|
|
|
| |||||
Distributions: |
|
(3,938,003 |
) |
|
(1,754,443 |
) | ||
|
|
|
| |||||
Capital Share Transactions: |
|
|
|
| ||||
Issued |
|
368,553,550 |
|
|
252,773,238 |
| ||
Redeemed |
|
(347,412,571 |
) |
|
(61,257,009 |
) | ||
Increase in Net Assets from Capital Share Transactions |
|
21,140,979 |
|
|
191,516,229 |
| ||
|
|
|
| |||||
Total Increase in Net Assets |
|
44,095,264 |
|
|
202,523,953 |
| ||
|
|
|
| |||||
Net Assets: |
|
|
|
| ||||
Beginning Year/Period |
|
202,523,953 |
|
|
— |
| ||
End of Year/Period |
$ |
246,619,217 |
|
$ |
202,523,953 |
| ||
|
|
|
| |||||
Share Transactions: |
|
|
|
| ||||
Issued |
|
12,725,000 |
|
|
9,975,000 |
| ||
Redeemed |
|
(11,975,000 |
) |
|
(2,375,000 |
) | ||
|
|
|
| |||||
Net Increase in Shares Outstanding from Share Transactions |
|
750,000 |
|
|
7,600,000 |
|
(1) Commenced operations on May 8, 2020
(2) Includes realized gains as a result of in-kind transactions (see Note 4 in Notes to Financial Statements).
Amounts designated as “—” are $0.
The accompanying notes are an integral part of the financial statements.
27
6 Meridian
Statements of Changes in Net Assets (Continued)
ETC 6 Meridian
Low Beta | ||||||||
Year
ended |
Period
Ended | |||||||
Operations: |
|
|
|
| ||||
Net Investment Income |
$ |
787,029 |
|
$ |
292,343 |
| ||
Net Realized Gain on Investments(2) |
|
18,088,315 |
|
|
737,982 |
| ||
Net Change in Unrealized Appreciation (Depreciation) on Investments |
|
(1,643,112 |
) |
|
9,704,718 |
| ||
|
|
|
| |||||
Net Increase in Net Assets Resulting from Operations |
|
17,232,232 |
|
|
10,735,043 |
| ||
|
|
|
| |||||
Distributions: |
|
(812,365 |
) |
|
(263,570 |
) | ||
|
|
|
| |||||
Capital Share Transactions: |
|
|
|
| ||||
Issued |
|
93,154,294 |
|
|
91,283,818 |
| ||
Redeemed |
|
(65,807,713 |
) |
|
(8,472,688 |
) | ||
Increase in Net Assets from Capital Share Transactions |
|
27,346,581 |
|
|
82,811,130 |
| ||
|
|
|
| |||||
Total Increase in Net Assets |
|
43,766,448 |
|
|
93,282,603 |
| ||
Net Assets: |
|
|
|
| ||||
Beginning of Year/Period |
|
93,282,603 |
|
|
— |
| ||
End of Year/Period |
$ |
137,049,051 |
|
$ |
93,282,603 |
| ||
|
|
|
| |||||
Share Transactions: |
|
|
|
| ||||
Issued |
|
2,775,000 |
|
|
3,575,000 |
| ||
Redeemed |
|
(1,950,000 |
) |
|
(325,000 |
) | ||
|
|
|
| |||||
Net Increase in Shares Outstanding from Share Transactions |
|
825,000 |
|
|
3,250,000 |
|
(1) Commenced operations on May 8, 2020
(2) Includes realized gains as a result of in-kind transactions (see Note 4 in Notes to Financial Statements).
Amounts designated as “—” are $0.
The accompanying notes are an integral part of the financial statements.
28
6 Meridian
Statements of Changes in Net Assets (Continued)
ETC 6 Meridian
Mega Cap | ||||||||
Year
ended |
Period
Ended | |||||||
Operations: |
|
|
|
| ||||
Net Investment Income |
$ |
2,565,082 |
|
$ |
960,570 |
| ||
Net Realized Gain on Investments(2) |
|
30,886,423 |
|
|
2,395,786 |
| ||
Net Change in Unrealized Appreciation (Depreciation) on Investments |
|
(7,036,859 |
) |
|
13,041,043 |
| ||
Net Increase in Net Assets Resulting from Operations |
|
26,414,646 |
|
|
16,397,399 |
| ||
|
|
|
| |||||
Distributions: |
|
(2,635,002 |
) |
|
(969,400 |
) | ||
|
|
|
| |||||
Capital Share Transactions: |
|
|
|
| ||||
Issued |
|
225,065,126 |
|
|
135,504,988 |
| ||
Redeemed |
|
(205,991,448 |
) |
|
(35,106,056 |
) | ||
Increase in Net Assets from Capital Share Transactions |
|
19,073,678 |
|
|
100,398,932 |
| ||
|
|
|
| |||||
Total Increase in Net Assets |
|
42,853,322 |
|
|
115,826,931 |
| ||
Net Assets: |
|
|
|
| ||||
Beginning of Year/Period |
|
115,826,931 |
|
|
— |
| ||
End of Year/Period |
$ |
158,680,253 |
|
$ |
115,826,931 |
| ||
|
|
|
| |||||
Share Transactions: |
|
|
|
| ||||
Issued |
|
6,850,000 |
|
|
5,275,000 |
| ||
Redeemed |
|
(6,225,000 |
) |
|
(1,300,000 |
) | ||
|
|
|
| |||||
Net Increase in Shares Outstanding from Share Transactions |
|
625,000 |
|
|
3,975,000 |
|
(1) Commenced operations on May 8, 2020
(2) Includes realized gains as a result of in-kind transactions (see Note 4 in Notes to Financial Statements).
Amounts designated as “—” are $0.
The accompanying notes are an integral part of the financial statements.
29
6 Meridian
Statements of Changes in Net Assets (Continued)
ETC 6
Meridian Small Cap | ||||||||
Year
ended |
Period
Ended | |||||||
Operations: |
|
|
|
| ||||
Net Investment Income |
$ |
457,264 |
|
$ |
96,520 |
| ||
Net Realized Gain on Investments(2) |
|
14,570,660 |
|
|
499,974 |
| ||
Net Change in Unrealized Appreciation on Investments |
|
248,109 |
|
|
6,400,158 |
| ||
|
|
|
| |||||
Net Increase in Net Assets Resulting from Operations |
|
15,276,033 |
|
|
6,996,652 |
| ||
|
|
|
| |||||
Distributions: |
|
(415,999 |
) |
|
(87,651 |
) | ||
|
|
|
| |||||
Capital Share Transactions: |
|
|
|
| ||||
Issued |
|
58,895,529 |
|
|
31,826,851 |
| ||
Redeemed |
|
(43,606,590 |
) |
|
(6,312,702 |
) | ||
Increase in Net Assets from Capital Share Transactions |
|
15,288,939 |
|
|
25,514,149 |
| ||
|
|
|
| |||||
Total Increase in Net Assets |
|
30,148,973 |
|
|
32,423,150 |
| ||
Net Assets: |
|
|
|
| ||||
Beginning of Year/Period |
|
32,423,150 |
|
|
— |
| ||
End of Year/Period |
$ |
62,572,123 |
|
$ |
32,423,150 |
| ||
|
|
|
| |||||
Share Transactions: |
|
|
|
| ||||
Issued |
|
1,325,000 |
|
|
1,150,000 |
| ||
Redeemed |
|
(975,000 |
) |
|
(225,000 |
) | ||
|
|
|
| |||||
Net Increase in Shares Outstanding from Share Transactions |
|
350,000 |
|
|
925,000 |
|
(1) Commenced operations on May 8, 2020
(2) Includes realized gains as a result of in-kind transactions (see Note 4 in Notes to Financial Statements).
Amounts designated as “—” are $0.
The accompanying notes are an integral part of the financial statements.
30
6 Meridian
Statements of Changes in Net Assets (Concluded)
ETC
6 | ||||
Period
Ended | ||||
Operations: |
|
| ||
Net Investment Loss |
$ |
(15,182 |
) | |
Net Realized Gain on Investments(2) |
|
333,599 |
| |
Net Change in Unrealized Appreciation on Investments |
|
917,008 |
| |
Net Increase in Net Assets Resulting from Operations |
|
1,235,425 |
| |
|
| |||
Return of Capital: |
|
(222 |
) | |
|
| |||
Capital Share Transactions: |
|
| ||
Issued |
|
28,170,071 |
| |
Redeemed |
|
(3,962,765 |
) | |
Increase in Net Assets from Capital Share Transactions |
|
24,207,306 |
| |
|
| |||
Total Increase in Net Assets |
|
25,442,509 |
| |
|
| |||
Net Assets: |
|
| ||
Beginning of Period |
|
— |
| |
End of Period |
$ |
25,442,509 |
| |
|
| |||
Share Transactions: |
|
| ||
Issued |
|
1,100,000 |
| |
Redeemed |
|
(150,000 |
) | |
|
| |||
Net Increase in Shares Outstanding from Share Transactions |
|
950,000 |
| |
|
|
(1) Commenced operations on May 10, 2021
(2) Includes realized gains as a result of in-kind transactions (see Note 4 in Notes to Financial Statements).
Amounts designated as “—” are $0.
The accompanying notes are an integral part of the financial statements.
31
Selected Per Share Data & Ratios
Year or Period Ended November 30.
For a Share Outstanding Throughout the Year or Period
Net Asset |
Net |
Net Realized |
Total |
Distributions |
Distributions |
Return |
Total |
Net Asset |
Market |
Total |
Net |
Ratio of |
Ratio of |
Ratio |
Portfolio | |||||||||||||||||||||||||||||||||
ETC 6 Meridian Hedged Equity-Index Option Strategy ETF |
| |||||||||||||||||||||||||||||||||||||||||||||||
2021 |
$ |
26.65 |
0.50 |
$ |
2.88 |
$ |
3.38 |
$ |
(0.49) |
$ |
— |
$ |
— |
|
$ |
(0.49) |
$ |
29.54 |
$ |
29.56 |
12.76 |
% |
$ |
246,619 |
0.84 |
%(7) |
0.84 |
%(7) |
1.72 |
%(7) |
171 |
% | ||||||||||||||||
2020(3) |
|
25.34 |
0.25 |
|
1.30 |
|
1.55 |
|
(0.24) |
|
— |
|
— |
|
|
(0.24) |
|
26.65 |
|
26.56 |
6.14 |
|
|
202,524 |
0.87 |
(4)(5) |
0.87 |
(4)(5) |
1.71 |
(4)(5) |
49 |
| ||||||||||||||||
ETC 6 Meridian Low Beta Equity Strategy ETF |
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||
2021 |
$ |
28.70 |
0.21 |
$ |
4.94 |
$ |
5.15 |
$ |
(0.22) |
$ |
— |
$ |
— |
|
$ |
(0.22) |
$ |
33.63 |
$ |
33.66 |
17.96 |
% |
$ |
137,049 |
0.82 |
% |
0.82 |
% |
0.64 |
% |
70 |
% | ||||||||||||||||
2020(3) |
|
25.54 |
0.10 |
|
3.15 |
|
3.25 |
|
(0.09) |
|
— |
|
— |
|
|
(0.09) |
|
28.70 |
|
28.70 |
12.72 |
|
|
93,283 |
0.88 |
(4) |
0.88 |
(4) |
0.65 |
(4) |
13 |
| ||||||||||||||||
ETC 6 Meridian Mega Cap Equity ETF |
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||
2021 |
$ |
29.14 |
0.58 |
$ |
5.39 |
$ |
5.97 |
$ |
(0.58) |
$ |
($0.03) |
$ |
— |
|
$ |
(0.61) |
$ |
34.50 |
$ |
34.48 |
20.59 |
% |
$ |
158,680 |
0.82 |
% |
0.82 |
% |
1.76 |
% |
166 |
% | ||||||||||||||||
2020(3) |
|
25.38 |
0.27 |
|
3.74 |
|
4.01 |
|
(0.25) |
|
— |
|
— |
|
|
(0.25) |
|
29.14 |
|
29.12 |
15.88 |
|
|
115,827 |
0.86 |
(4) |
0.86 |
(4) |
1.72 |
(4) |
38 |
| ||||||||||||||||
ETC 6 Meridian Small Cap Equity ETF |
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||
2021 |
$ |
35.05 |
0.40 |
$ |
14.00 |
$ |
14.40 |
$ |
(0.37) |
$ |
— |
$ |
— |
|
$ |
(0.37) |
$ |
49.08 |
$ |
49.22 |
41.20 |
% |
$ |
62,572 |
0.88 |
% |
0.88 |
% |
0.87 |
% |
104 |
% | ||||||||||||||||
2020(3) |
|
26.43 |
0.13 |
|
8.60 |
|
8.73 |
|
(0.11) |
|
— |
|
— |
|
|
(0.11) |
|
35.05 |
|
35.01 |
33.11 |
|
|
32,423 |
1.00 |
(4) |
1.10 |
(4) |
0.76 |
(4) |
29 |
| ||||||||||||||||
ETC 6 Meridian Quality Growth ETF |
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||
2021(6) |
$ |
24.28 |
(0.03) |
$ |
2.53 |
$ |
2.50 |
$ |
— |
$ |
— |
$ |
— |
** |
$ |
— |
$ |
26.78 |
$ |
26.84 |
10.30 |
% |
$ |
25,443 |
1.00 |
% |
1.52 |
% |
(0.18 |
)% |
40 |
% |
* Per share data calculated using average shares method.
** Amount represents less than $0.01.
(1) Total return is for the period indicated and has not been annualized for periods less than one year. Returns do not reflect the deduction of taxes the shareholder would pay on fund distributions or redemption of Fund shares.
(2) Portfolio turnover rate is for the period indicated and periods of less than one year have not been annualized. Excludes effect of securities received or delivered from processing in-kind creations or redemptions.
(3) Commenced operations on May 8, 2020.
(4) Annualized.
(5) The expense ratio includes interest expense. Had this expense been excluded the ratio’s would have been 0.83%, 0.83% and 1.75%.
(6) Commenced operations on May 10, 2021.
(7) The expense and investment income ratio includes interest expense. Had this expense been excluded the ratio’s would have been 0.80%, 0.80% and 1.76%.
Amounts designated as “—” are $0.
The accompanying notes are an integral part of the financial statements.
32
1. ORGANIZATION
Exchange Traded Concepts Trust (the “Trust”) is a Delaware statutory trust formed on July 17, 2009. The Trust is registered with the Commission under the Investment Company Act of 1940 (the “1940 Act”) as an open-end management investment company with multiple investment portfolios. The financial statements herein are those of the ETC 6 Meridian Hedged Equity-Index Option Strategy ETF, ETC 6 Meridian Low Beta Equity Strategy ETF, ETC 6 Meridian Mega Cap Equity ETF, ETC 6 Meridian Small Cap Equity ETF and ETC 6 Meridian Quality Growth ETF (each, a “Fund” and collectively, the “Funds”).
Each Fund seeks to provide capital appreciation. The ETC 6 Meridian Low Beta Equity Strategy ETF and ETC 6 Meridian Small Equity ETF are classified as “diversified” under the 1940 Act. The ETC 6 Meridian Hedged Equity-Index Option Strategy ETF, ETC 6 Meridian Mega Cap Equity ETF and ETC 6 Meridian Quality Growth ETF are classified as “non-diversified” under the 1940 Act (see “Non-Diversification Risk” under Note 6). Exchange Traded Concepts, LLC (the “Adviser”), an Oklahoma limited liability Company, serves as the investment adviser for the Funds and is subject to the supervision of the Board of Trustees (the “Board”). The Funds, other than the ETC 6 Meridian Quality Growth ETF, commenced operations on May 8, 2020. The ETC 6 Meridian Quality Growth ETF commenced operations on May 10, 2021.
Shares of each Fund are listed and traded on the NYSE Arca, Inc. (the “Exchange”). Market prices for the shares may be different from their net asset value (“NAV”). The Funds issue and redeem shares on a continuous basis to certain institutional investors (typically market makers or other broker-dealers) at NAV only in large blocks of shares, typically 25,000 shares, called “Creation Units”. Creation Unit transactions for a Fund are typically conducted in exchange for the deposit or delivery of a portfolio of securities closely approximating the holdings of that Fund and a specified amount of cash. Once created, shares trade in a secondary market at market prices that change throughout the day in share amounts less than a Creation Unit.
Effective November 12, 2021, the name of each Fund changed as set forth in the table below. The change had no effect on a Fund’s investment objective or principal investment strategies.
Current Name |
New Name | |
6 Meridian Hedged Equity-Index Option Strategy ETF |
ETC 6 Meridian Hedged Equity-Index Option Strategy ETF | |
6 Meridian Low Beta Equity Strategy ETF |
ETC 6 Meridian Low Beta Equity Strategy ETF | |
6 Meridian Mega Cap Equity ETF |
ETC 6 Meridian Mega Cap Equity ETF | |
6 Meridian Small Cap Equity ETF |
ETC 6 Meridian Small Cap Equity ETF | |
6 Meridian Quality Growth ETF |
ETC 6 Meridian Quality Growth ETF |
2. SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are consistently followed in the preparation of the financial statements of the Trust, are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for investment companies. The accompanying financial statements have been prepared in accordance with U.S. GAAP on the accrual basis of accounting. Management has reviewed Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services — Investment Companies ASC (“ASC 946”), and concluded that the Funds meet criteria of an “investment company,” and therefore, the Funds prepare its financial statements in accordance with investment company accounting as outlined in ASC 946.
Use of Estimates and Indemnifications — 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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
33
6 Meridian
Notes to Financial Statements
November 30, 2021 (Continued)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
In the normal course of business, the Trust, on behalf of the Funds, enters into contracts that contain a variety of representations which provide general indemnifications. Each Fund’s maximum exposure under these arrangements cannot be known; however, the Funds expect any risk of loss to be remote.
Security Valuation — The Funds investments are recorded at fair value. 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 (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, at the most recent quoted bid for long positions and the most recent ask price for short positions. For securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. If available, debt securities are priced based upon valuations provided by independent, third-party pricing agents. Such values generally reflect the last reported sales price if the security is actively traded. The third-party pricing agents may also value debt securities at an evaluated bid price by employing methodologies that utilize actual market transactions, broker-supplied valuations, or other methodologies designed to identify the fair value for such securities. Debt obligations with remaining maturities of sixty days or less when acquired will be valued at their market value. If a market value is not available from a pricing vendor or from an independent broker, the security shall be fair valued according to the Trust’s Fair Value Procedures.
Options are valued at the last quoted sales price. If there is no such reported sale on the valuation date, long positions are valued at the most recent bid price, and short positions are valued at the most recent ask price.
Prices for most securities held by the Funds are provided daily by recognized independent pricing agents. If a security price cannot be obtained from an independent, third-party pricing agent, the Funds seek to obtain a bid price from at least one independent broker.
Securities for which market prices are not “readily available” are valued in accordance with fair value procedures established by the Board. The Funds’ fair value procedures are implemented through a fair value committee (the “Committee”) designated by the Board. Some of the more common reasons that may necessitate that a security be valued using fair value procedures include: the security’s trading has been halted or suspended; the security has been de-listed from a national exchange; the security’s primary trading market is temporarily closed at a time when, under normal conditions, it would be open; the security has not been traded for an extended period of time; the security’s primary pricing source is not able or willing to provide a price; or trading of the security is subject to local government-imposed restrictions. In addition, the Funds may fair value their securities if an event that may materially affect the value of the Funds’ securities that traded outside of the United States (a ‘‘Significant Event’’) has occurred between the time of the security’s last close and the time that the Funds calculates their net asset value. A Significant Event may relate to a single issuer or to an entire market sector. Events that may be Significant Events include, but are not limited to: government actions, natural disasters, armed conflict, acts of terrorism and significant market fluctuations. If the Adviser becomes aware of a Significant Event that has occurred with respect to a security or group of securities after the closing of the exchange or market on which the security or securities principally trade, but before the time at which the Funds calculate their net asset value, it may request that a Committee meeting be called. When a security is valued in accordance with the fair value procedures, the Committee will determine the value after taking into consideration relevant information reasonably available to the Committee.
In accordance with the authoritative guidance on fair value measurements and disclosure under GAAP, the Funds disclose fair value of their investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The objective of a fair value measurement is to determine the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement
34
6 Meridian
Notes to Financial Statements
November 30, 2021 (Continued)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
date (an exit price). Accordingly, the fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
• Level 1 – Unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities that the Funds has the ability to access at the measurement date;
• Level 2 – Quoted prices which are not active, or inputs that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and
• Level 3 – Prices, inputs or exotic modeling techniques which are both significant to the fair value measurement and unobservable (supported by little or no market activity).
The valuation techniques used by the Funds to measure fair value during the year/period ended November 30, 2021 maximized the use of observable inputs and minimized the use of unobservable inputs.
For the year/period ended November 30, 2021, there have been no significant changes to the Funds’ fair valuation methodologies.
Federal Income Taxes — It is the Funds’ intention to qualify as a regulated investment company for Federal income tax purposes by complying with the appropriate provisions of Subchapter M of the Internal Revenue Code of 1986, as amended. Accordingly, no provisions for federal income taxes have been made in the financial statements.
The Funds’ policy is to classify interest and penalties associated with underpayment of federal and state income taxes, if any, as income tax expense on their Statements of Operations. As of November 30, 2021, the Funds did not have any interest or penalties associated with the underpayment of any income taxes. Tax years that are open, remain subject to examination by tax jurisdictions. The Funds have reviewed all major jurisdictions and concluded that there is no impact on the Funds’ net assets and no tax liability resulting from unrecognized tax benefits relating to uncertain income tax positions taken or expected to be taken on its tax returns.
Security Transactions and Investment Income — Security transactions are accounted for on trade date. Costs used in determining realized gains and losses on the sale of investment securities are based on specific identification. Dividend income is recorded on the ex-dividend date. Interest income is recognized on the accrual basis. Withholding taxes and reclaims on foreign dividends have been provided for in accordance with the Funds’ understanding of the applicable country’s tax rules and rates.
Options — The Funds may purchase and sell put and call options. A call option gives a holder the right to purchase a specific security or an index at a specified price (“exercise price”) within a specified period of time. A put option gives a holder the right to sell a specific security or an index at a specified price within a specified period of time. The initial purchaser of a call option pays the “writer,” i.e., the party selling the option, a premium which is paid at the time of purchase and is retained by the writer whether or not such option is exercised. The Fund may purchase put options to hedge its portfolio against the risk of a decline in the market value of securities held and may purchase call options to hedge against an increase in the price of securities it is committed to purchase. The Fund may write put and call options along with a long position in options to increase its ability tochedge against a change in the market value of the securities it holds or is committed to purchase. The ETC 6 Meridian Hedge Equity-Index Option Strategy ETF entered into written and purchased options during the year ended November 30, 2021. These options were index options composed entirely of equity risk. The realized and unrealized gain (loss) on these options can be found on the Statements of Operations.
Options may relate to particular securities and may or may not be listed on a national securities exchange and issued by the Options Clearing Corporation. Options trading is a highly specialized activity that entails greater than ordinary investment risk. Options on particular securities may be more volatile than the underlying securities, and
35
6 Meridian
Notes to Financial Statements
November 30, 2021 (Continued)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
therefore, on a percentage basis, an investment in options may be subject to greater fluctuation than an investment in the underlying securities themselves. Refer to the Fund’s Schedule of Investments for details regarding open option contracts as of November 30, 2021, if applicable. The amount of realized gain (loss) on Purchased and Written Option is presented on the Statement of Operations as “Net Realized Gain on Purchased and Written Option” The change in the net fair value of the futures contracts is included in the Statement of Operations as “Net Change in Unrealized Appreciation (Depreciation) on Purchased and Written Option”.
For the year ended November 30, 2021, the average monthly notional amount of options held were as follows:
ETC 6 Meridian Hedged Equity-Index Option Strategy ETF |
|
| ||
Average Monthly Notional Balance Long |
$ |
— |
| |
Average Monthly Notional Balance Short |
|
(218,723,194 |
) |
Cash and Cash Equivalents — Idle cash may be swept into various overnight demand deposits and is classified as Cash and Cash equivalents on the Statements of Assets and Liabilities. The Fund maintains cash in bank deposit accounts which, at times, may exceed United States federally insured limits. Amounts swept overnight are available on the next business day.
Dividends and Distributions to Shareholders — Each Fund pays out dividends from its net investment income monthly and distributes its net capital gains, if any, to investors at least annually. All distributions are recorded on ex-dividend date.
Offering costs — Offering costs, including costs of printing initial prospectus, legal and registration fees, are expensed monthly from inception for each Fund. During the year ended November 30, 2021, the Funds have expensed $151,039 of offering costs, with $21,061 remaining related to ETC 6 Meridian Quality Growth ETF. Reimbursements for offering costs of $21,061 are included in advisory fees payable on the Statements of Assets and Liabilities for ETC 6 Meridian Quality Growth ETF.
Creation Units — The Funds issue and redeem shares at NAV and only in large blocks of shares (each block of shares for the Funds is called a “Creation Unit” or multiples thereof). Purchasers of Creation Units at NAV must pay a standard creation transaction fee of $1,000 for the ETC 6 Meridian Low Beta Equity Strategy ETF and $500 for the ETC 6 Meridian Hedged Equity-Index Option Strategy ETF, ETC 6 Meridian Mega Cap Equity ETF, ETC 6 Meridian Small Cap Equity ETF and ETC 6 Meridian Quality Growth ETF. An authorized participant who holds Creation Units (“Authorized Participants”) and wishes to redeem at NAV would also pay a standard redemption transaction fee of $1,000 for the ETC 6 Meridian Low Beta Equity Strategy ETF and $500 for the ETC 6 Meridian Hedged Equity-Index Option Strategy ETF, ETC 6 Meridian Mega Cap Equity ETF, ETC 6 Meridian Small Cap Equity ETF and ETC 6 Meridian Quality Growth ETF. The Adviser may retain all or a portion of the transaction fee to the extent the Adviser bears the expenses that otherwise would be borne by a Fund in connection with the purchase or redemption of a Creation Unit, which the transaction fee is designed to cover.
Except when aggregated in Creation Units, shares are not redeemable securities of the Funds. Shares of the Funds may only be purchased or redeemed by certain 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 (“DTC”) participant and, in each case, must have executed an Authorized Participant Agreement with the Funds’ distributor. Most retail investors will not qualify as Authorized Participants or have the resources to buy and sell whole Creation Units. Therefore, they will be unable to purchase or redeem the shares directly from the Funds. Rather, most retail investors will purchase shares in the secondary market with the assistance of a broker and will be subject to customary brokerage commissions or fees.
36
6 Meridian
Notes to Financial Statements
November 30, 2021 (Continued)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
The following table discloses the Creation Unit breakdown based on the NAV as of November 30, 2021:
Creation |
Creation
|
Value |
Redemption
| ||||||||
ETC 6 Meridian Hedged Equity-Index Option Strategy ETF |
25,000 |
$ |
500 |
$ |
738,500 |
$ |
500 | ||||
ETC 6 Meridian Low Beta Equity Strategy ETF |
25,000 |
|
1,000 |
|
840,750 |
|
1,000 | ||||
ETC 6 Meridian Mega Cap Equity ETF |
25,000 |
|
500 |
|
862,500 |
|
500 | ||||
ETC 6 Meridian Small Cap Equity ETF |
25,000 |
|
500 |
|
1,227,000 |
|
500 | ||||
ETC 6 Meridian Quality Growth ETF |
25,000 |
|
500 |
|
669,500 |
|
500 |
To the extent contemplated by a participant agreement, in the event an Authorized Participant has submitted a redemption request in proper form but is unable to transfer all or part of the shares comprising a Creation Unit to be redeemed to the Distributor, on behalf of a Fund, by the time as set forth in a participant agreement, the Distributor may nonetheless accept the redemption request in reliance on the undertaking by the Authorized Participant to deliver the missing shares as soon as possible, which undertaking shall be secured by the Authorized Participant’s delivery and maintenance of collateral equal to a percentage of the value of the missing shares as specified in the participant agreement. A participant agreement may permit a Fund to use such collateral to purchase the missing shares, and could subject an Authorized Participant to liability for any shortfall between the cost of a Fund acquiring such shares and the value of the collateral.
3. SERVICE PROVIDERS
Investment Adviser
The Adviser is located at 10900 Hefner Pointe Drive, Suite 400, Oklahoma City, Oklahoma 73120, its principal place of business, and 295 Madison Avenue, New York, New York 10017. The Adviser serves as investment adviser to the Trust, including the Funds, pursuant to an investment advisory agreement (“Advisory Agreement”). Under the Advisory Agreement, the Adviser provides investment advisory services to each Fund. The Adviser is responsible for, among other things, overseeing the Sub-Adviser (as defined below), including regular review of the Sub-Adviser’s performance, and trading portfolio securities on behalf of each Fund and selecting broker-dealers to execute purchase and sale transactions, subject to the supervision of the Board. The Adviser also arranges for transfer agency, custody, fund administration and accounting, and other non-distribution related services necessary for the Funds to operate. The Adviser administers each Fund’s business affairs, provides office facilities and equipment and certain clerical, bookkeeping and administrative services, and provides its officers and employees to serve as officers or Trustees of the Trust.
For the services it provides to each Fund, the Adviser receives a fee, which is calculated daily and paid monthly, at an annual rate of 0.61% of average daily net assets of each Fund.
The Adviser has contractually agreed to waive its fees and reimburse expenses to the extent necessary to keep total annual operating expenses of each Fund (excluding amounts payable pursuant to any plan adopted in accordance with Rule 12b-1, interest expense, taxes, brokerage commissions, acquired fund fees and expenses, other expenditures which are capitalized in accordance with generally accepted accounting principles, and extraordinary expenses) from exceeding 1.00% of each Fund’s average daily net assets until at least May 7, 2022. The expense limitation agreement may be terminated, without payment of any penalty: (i) by the Trust for any reason and at any time and (ii) by the Adviser, for any reason, upon ninety (90) days’ prior written notice to the Trust, such termination to be effective as of the close of business on the last day of the then-current one-year period. If it becomes unnecessary for the Adviser to waive fees or reimburse expenses, the Board may permit the Adviser to retain the difference between the Funds’ total annual operating expenses and the expense limitation currently in effect, or, if lower, the expense limitation that was in effect at the time of the waiver and/or reimbursement, to recapture all or a portion of its
37
6 Meridian
Notes to Financial Statements
November 30, 2021 (Continued)
3. SERVICE PROVIDERS (continued)
prior fee waivers or expense reimbursements within three years of the date they were waived or reimbursed. The fees which were waived and/or reimbursed to the Fund by the Adviser, which may be subject to possible future recoupment, up to the expense cap in place at the time the expenses were waived and reimbursed by the Adviser were $13,217 expiring in 2023 for the 6 Meridian Small Cap Equity ETF and $42,622 expiring in 2024 for 6 Meridian Quality Growth ETF.
A Trustee and certain officers of the Trust are affiliated with the Adviser and receive no compensation from the Trust for serving as officers and/or Trustee.
Sub-Adviser
6 Meridian LLC (the “Sub-Adviser”), a Delaware limited liability company, serves as the Funds’ sub-adviser pursuant to a sub-advisory agreement “(“Sub-Advisory Agreement”) (see Note 9 for subsequent event detailing the change in control at sub-adviser after year-end).” Under the Sub-Advisory Agreement, the Sub-Adviser makes investment decisions for the Funds and continuously reviews, supervises, and administers the investment program of the Funds, subject to the supervision of the Adviser and the Board.
Under the Sub-Advisory Agreement, with respect to each Fund, the Adviser pays the Sub-Adviser a fee out of the fee the Adviser receives from the Funds, calculated daily and paid monthly at an annual rate of 0.49% of the Funds’ average daily net assets.
Distribution Arrangement
SEI Investments Distribution Co. (the “Distributor”) serves as the Funds’ underwriter and distributor of each Fund’s shares pursuant to an amended and restated Distribution Agreement (the “Distribution Agreement”). Under the Distribution Agreement, the Distributor, as agent, receives orders to purchase shares in Creation Units and transmits such orders to the Funds’ custodian and transfer agent. The Distributor has no obligation to sell any specific quantity of a Fund’s shares. The Distributor bears the following costs and expenses relating to the distribution of shares: (i) the expenses of maintaining its registration or qualification as a dealer or broker under federal or state laws; (ii) filing fees; and (iii) all other expenses incurred in connection with the distribution services, that are not reimbursed by the Adviser, as contemplated in the Distribution Agreement. The Distributor does not maintain any secondary market in any Fund’s shares.
The Funds have adopted a Distribution and Service Plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. In accordance with the Plan, the Funds are authorized to pay an amount up to 0.25% of their average daily assets each year for certain distribution-related activities. For the year ended November 30, 2021, no fees were paid by the Funds under the Plan and the Plan will only be implemented with approval of the Board.
Administrator, Custodian and Transfer Agent
SEI Investments Global Funds Services (the “Administrator”) serves as the Funds’ Administrator pursuant to an Administration Agreement. Bank of New York Mellon (the “Custodian” and “Transfer Agent”) serves as the Funds’ Custodian and Transfer agent pursuant to a Custodian Agreement and Transfer Agency Services Agreement.
An officer of the Trust is affiliated with the Administrator and receives no compensation from the Trust for serving as an officer.
4. INVESTMENT TRANSACTIONS
For the year/period ended November 30, 2021, the purchases and sales of investments in securities, excluding in-kind transactions, long-term U.S. Government and short-term securities were:
38
6 Meridian
Notes to Financial Statements
November 30, 2021 (Continued)
Purchases |
Sales and
| |||||
ETC 6 Meridian Hedged Equity-Index Option Strategy ETF |
$ |
395,490,441 |
$ |
413,671,125 | ||
ETC 6 Meridian Low Beta Equity Strategy ETF |
|
86,275,860 |
|
84,887,931 | ||
ETC 6 Meridian Mega Cap Equity ETF |
|
237,633,620 |
|
240,985,706 | ||
ETC 6 Meridian Small Cap Equity ETF |
|
53,173,258 |
|
53,666,667 | ||
ETC 6 Meridian Quality Growth ETF* |
|
6,384,343 |
|
6,206,472 |
There were no purchases or sales of long-term U.S. Government securities by any of the Funds.
* Commenced operations on May 10, 2021.
For the year ended November 30, 2021, in-kind transactions associated with creations and redemptions were:
Purchases |
Sales |
Net Realized
| |||||||
ETC 6 Meridian Hedged Equity-Index Option Strategy ETF |
$ |
364,680,374 |
$ |
341,029,923 |
$ |
58,191,573 | |||
ETC 6 Meridian Low Beta Equity Strategy ETF |
|
90,871,751 |
|
64,916,799 |
|
20,707,273 | |||
ETC 6 Meridian Mega Cap Equity ETF |
|
222,020,845 |
|
199,761,755 |
|
35,223,600 | |||
ETC 6 Meridian Small Cap Equity ETF |
|
58,754,375 |
|
42,999,531 |
|
15,635,777 | |||
ETC 6 Meridian Quality Growth ETF* |
|
27,652,799 |
|
3,939,544 |
|
514,325 |
* Commenced operations on May 10, 2021.
For the period ended November 30, 2020, the ETC 6 Meridian Hedged Equity-Index Option Strategy ETF, ETC 6 Meridian Low Beta Equity Strategy ETF, ETC 6 Meridian Mega Cap Equity ETF and ETC 6 Meridian Small Cap Equity ETF had $7,806,542, $1,180,835, $4,213,529 and $929,804 of realized gains as a result of in-kind transactions, respectively.
5. TAX INFORMATION
The amount and character of income and capital gain distributions to be paid, if any, are determined in accordance with Federal income tax regulations, which may differ from U.S. GAAP. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. These book/tax differences may be temporary or permanent. To the extent these differences are permanent in nature, they are charged or credited to paid-in capital or total distributable earnings as appropriate, in the period that the differences arise.
Accordingly, the following permanent differences primarily attributable to redemptions in-kind and net operating losses have been reclassified within the components of net assets for the period ended November 30, 2021:
Total
|
Paid-in
| ||||||
ETC 6 Meridian Hedged Equity-Index Option Strategy ETF |
$ |
(58,191,573 |
) |
$ |
58,191,573 | ||
ETC 6 Meridian Low Beta Equity Strategy ETF |
|
(20,707,273 |
) |
|
20,707,273 | ||
ETC 6 Meridian Mega Cap Equity ETF |
|
(35,223,600 |
) |
|
35,223,600 | ||
ETC 6 Meridian Small Cap Equity ETF |
|
(15,635,777 |
) |
|
15,635,777 | ||
ETC 6 Meridian Quality Growth ETF |
|
(499,141 |
) |
|
499,141 |
During the year/period ended November 30, 2021, the ETC 6 Meridian Hedged Equity-Index Option Strategy ETF, ETC 6 Meridian Low Beta Equity Strategy ETF, ETC 6 Meridian Mega Cap Equity ETF, ETC 6 Meridian Small Cap Equity ETF and ETC 6 Meridian Quality Growth ETF realized $58,191,573, $20,707,273, $35,223,600, $15,635,777 and $514,325, respectively, of net capital gains resulting from in-kind redemptions in which shareholders
39
6 Meridian
Notes to Financial Statements
November 30, 2021 (Continued)
5. TAX INFORMATION (continued)
exchanged Fund shares for securities held by the Funds rather than cash. Because such gains are not taxable to the Funds, and are not distributed to shareholders, they have been reclassified from accumulated net realized losses to paid-in-capital.
These reclassifications have no impact on net assets or net asset value per share.
The tax character of dividends and distributions paid during the year/period ended November 30, 2021 were as follows:
Ordinary
|
Return of
|
Totals | |||||||
ETC 6 Meridian Hedged Equity-Index Option Strategy ETF |
|
|
|
||||||
2021 |
$ |
3,938,003 |
$ |
— |
$ |
3,938,003 | |||
2020 |
|
1,754,443 |
|
— |
|
1,754,443 | |||
ETC 6 Meridian Low Beta Equity Strategy ETF |
|
|
|
||||||
2021 |
$ |
812,365 |
$ |
— |
$ |
812,365 | |||
2020 |
|
263,570 |
|
— |
|
263,570 | |||
ETC 6 Meridian Mega Cap Equity ETF |
|
|
|
||||||
2021 |
$ |
2,635,002 |
$ |
— |
$ |
2,635,002 | |||
2020 |
|
969,400 |
|
— |
|
969,400 | |||
ETC 6 Meridian Small Cap Equity ETF |
|
|
|
||||||
2021 |
$ |
415,999 |
$ |
— |
$ |
415,999 | |||
2020 |
|
87,651 |
|
— |
|
87,651 | |||
ETC 6 Meridian Quality Growth ETF |
|
|
|
||||||
2021 |
$ |
— |
$ |
222 |
$ |
222 |
As of November 30, 2021, the components of Distributable Earnings (Accumulated Losses) on a tax basis were as follows:
ETC
|
ETC
|
ETC
|
ETC
|
ETC
| ||||||||||||||||
Undistributed Ordinary Income |
$ |
605,234 |
|
$ |
146,852 |
|
$ |
321,104 |
|
$ |
129,233 |
|
$ |
— |
| |||||
Post-October Losses |
|
(2,170,924 |
) |
|
— |
|
|
(835,606 |
) |
|
— |
|
|
— |
| |||||
Capital Loss Carryforwards |
|
(37,517,031 |
) |
|
(2,645,149 |
) |
|
(3,931,212 |
) |
|
(1,286,833 |
) |
|
(121,045 |
) | |||||
Unrealized Appreciation |
|
8,039,493 |
|
|
7,622,728 |
|
|
4,615,562 |
|
|
6,434,219 |
|
|
857,328 |
| |||||
Other Temporary Differences |
|
(992,879 |
) |
|
(121,199 |
) |
|
(399,384 |
) |
|
(73,165 |
) |
|
1 |
| |||||
Total Distributable Earnings (Accumulated Losses) |
$ |
(32,036,107 |
) |
$ |
5,003,232 |
|
$ |
(229,536 |
) |
$ |
5,203,454 |
|
$ |
736,284 |
|
The Funds are permitted to utilize capital losses that are carried forward and will retain their character as either short-term or long-term capital losses. As of November 30, 2021, the following Funds have capital loss carryforwards to offset capital gains for an unlimited period:
40
6 Meridian
Notes to Financial Statements
November 30, 2021 (Continued)
5. TAX INFORMATION (continued)
Non
Expiring |
Non
Expiring |
Total
| ||||||||||
ETC 6 Meridian Hedged Equity-Index Option Strategy ETF |
$ |
(18,712,137 |
) |
$ |
(18,804,894 |
) |
$ |
(37,517,031 |
) | |||
ETC 6 Meridian Low Beta Equity Strategy ETF |
|
(1,478,272 |
) |
|
(1,166,877 |
) |
|
(2,645,149 |
) | |||
ETC 6 Meridian Mega Cap Equity ETF |
|
(3,931,212 |
) |
|
— |
|
|
(3,931,212 |
) | |||
ETC 6 Meridian Small Cap Equity ETF |
|
(1,070,735 |
) |
|
(216,098 |
) |
|
(1,286,833 |
) | |||
ETC 6 Meridian Quality Growth ETF |
|
(121,405 |
) |
|
— |
|
|
(121,405 |
) |
For Federal income tax purposes, the cost of securities owned at November 30, 2021, and the net realized gains or losses on securities sold for the period, were different from amounts reported for financial reporting purposes primarily due to wash sales which cannot be used for Federal income tax purposes in the current period and have been deferred for use in future years. The Federal tax cost and aggregate gross unrealized appreciation and depreciation on investments and foreign currency transactions held by the Funds at November 30, 2021, were as follows:
Federal Tax
|
Aggregated
|
Aggregated
|
Net
| ||||||||||
ETC 6 Meridian Hedged Equity-Index Option Strategy ETF |
$ |
243,407,478 |
$ |
16,265,419 |
$ |
(8,225,925 |
) |
$ |
8,039,493 | ||||
ETC 6 Meridian Low Beta Equity Strategy ETF |
|
129,513,142 |
|
15,311,491 |
|
(7,688,763 |
) |
|
7,622,728 | ||||
ETC 6 Meridian Mega Cap Equity ETF |
|
154,126,346 |
|
10,201,776 |
|
(5,586,214 |
) |
|
4,615,562 | ||||
ETC 6 Meridian Small Cap Equity ETF |
|
56,143,829 |
|
9,554,525 |
|
(3,120,306 |
) |
|
6,434,219 | ||||
ETC 6 Meridian Quality Growth ETF |
|
24,614,773 |
|
1,780,913 |
|
(923,585 |
) |
|
857,328 |
6. RISKS OF INVESTING IN THE FUNDS
As with all exchange traded funds (“ETFs”), a shareholder of any of the Funds is subject to the risk that his or her investment could lose money. Unless otherwise noted, each Fund is subject to the risks noted below. Any of these risks may adversely affect a Fund’s NAV, trading price, yield, total return and ability to meet its investment objective. Additional principal risks are disclosed in each Fund’s prospectus. Please refer to a Fund’s prospectus for a complete description of the principal risks of investing in a Fund.
Asset Class Risk (ETC 6 Meridian Low Beta Equity Strategy ETF, ETC 6 Meridian Mega Cap Equity ETF, ETC 6 Meridian Small Cap Equity ETF, and ETC 6 Meridian Hedged Equity-Index Option Strategy ETF). Securities and other assets in the Fund’s portfolio may underperform in comparison to the general financial markets, a particular financial market or other asset classes.
Common Stock Risk. Common stock holds the lowest priority in the capital structure of a company, and, therefore, takes the largest share of the company’s risk and its accompanying volatility. The value of the common stock held by the Funds may fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities held by the Funds participate, or facts relating to specific companies in which the Funds invests.
Dividends Risk. (ETC 6 Meridian Mega Cap Equity ETF and ETC 6 Meridian Hedged Equity-Index Option Strategy ETF). The Funds’ investment in dividend-paying securities could cause the Funds to underperform similar funds that invest without consideration of an issuer’s track record of paying dividends. Companies that issue
41
6 Meridian
Notes to Financial Statements
November 30, 2021 (Continued)
6. RISKS OF INVESTING IN THE FUNDS (continued)
dividend-paying securities are not required to continue to pay dividends on such securities. Therefore, there is the possibility that such companies could reduce or eliminate the payment of dividends in the future.
Early Close/Trading Halt Risk. An exchange or market may close or issue trading halts on specific securities, or the ability to buy or sell certain securities or financial instruments may be restricted, which may result in the Funds being unable to buy or sell certain securities or financial instruments. In such circumstances, the Funds may be unable to rebalance its portfolio, may be unable to accurately price its investments and/or may incur substantial trading losses.
Equity Securities Risk. The prices of equity securities in which the Funds invests may rise and fall daily. These price movements may result from factors affecting individual issuers, industries or the stock market as a whole. Individual companies may report better than expected results or be positively affected by industry and/or economic trends and developments. The prices of securities issued by such companies may increase in response. In addition, the equity market tends to move in cycles, which may cause stock prices to rise over short or extended periods of time.
Issuer-Specific Risk. Fund performance depends on the performance of the issuers to which the Fund has exposure. Issuer-specific events, including changes in the financial condition of an issuer, can have a negative impact on the value of the Fund.
Large-Capitalization Risk. The Funds’ performance may be adversely affected if securities of large-capitalization companies underperform securities of smaller-capitalization companies or the market as a whole. The securities of large-capitalization companies may be relatively mature compared to smaller companies and therefore subject to slower growth during times of economic expansion.
Limited Authorized Participants, Market Makers and Liquidity Providers Risk. Because the Funds is an ETF, only a limited number of institutional investors (known as “Authorized Participants”) are authorized to purchase and redeem shares directly from the Funds. In addition, there may be a limited number of market makers and/or liquidity providers in the marketplace. To the extent either of the following events occurs, the risk of which is higher during periods of market stress, shares of the Funds may trade at a material discount to their NAV per share and possibly face delisting: (i) Authorized Participants exit the business or otherwise become unable to process creation and/or redemption orders and no other Authorized Participants step forward to perform these services, or (ii) market makers and/or liquidity providers exit the business or significantly reduce their business activities and no other entities step forward to perform their functions.
Low Beta Style Risk (ETC 6 Meridian Low Beta Equity Strategy ETF, ETC 6 Meridian Mega Cap Equity ETF, ETC 6 Meridian Small Cap Equity ETF, and ETC 6 Meridian Hedged Equity-Index Option Strategy ETF). Although subject to the risks of common stocks, low beta stocks are seen as having a lower risk profile than the overall markets. However, a portfolio comprised of low beta stocks may not produce investment exposure that has lower variability to changes in such stock price levels. Low beta stocks are likely to underperform the broader market during periods of rapidly rising stock prices.
Management Risk. The Sub-Adviser continuously evaluates the Funds’ holdings, purchases and sales with a view to achieving the Funds’ investment objective. However, the achievement of the stated investment objective cannot be guaranteed over short- or long-term market cycles. The Sub-Adviser’s judgments about the markets, the economy, or companies may not anticipate actual market movements, economic conditions, or company performance, and these judgments may affect the return on your investment. The quantitative strategy used by the Sub-Adviser may not perform as expected, particularly in volatile markets.
Market Risk. The market price of a security or instrument could decline, sometimes rapidly or unpredictably, due to general market conditions that are not specifically related to a particular company, such as real or perceived adverse economic or political conditions throughout the world, changes in the general outlook for corporate
42
6 Meridian
Notes to Financial Statements
November 30, 2021 (Continued)
6. RISKS OF INVESTING IN THE FUNDS (continued)
earnings, changes in interest or currency rates or adverse investor sentiment generally. Local, regional, or global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the market generally and on specific securities. The market value of a security may also decline because of factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry.
Models and Data Risk. The Sub-Adviser relies heavily on quantitative models as well as data and information supplied by third parties that are utilized by the models. To the extent the models do not perform as designed or as intended, the Funds’ strategy may not be successfully implemented and the Funds may lose value. If the models or data are incorrect or incomplete, any decisions made in reliance thereon may lead to the inclusion or exclusion of securities that would have been excluded or included had the models or data been correct and complete.
New/Smaller Fund Risk. A new or smaller fund is subject to the risk that its performance may not represent how the Funds are expected to or may perform in the long term. In addition, new funds have limited operating histories for investors to evaluate and new and smaller funds may not attract sufficient assets to achieve investment and trading efficiencies. There can be no assurance that the Funds will achieve an economically viable size, in which case it could ultimately liquidate. The Funds may be liquidated by the Board without a shareholder vote. In a liquidation, shareholders of the Funds will receive an amount equal to the Fund’s NAV, after deducting the costs of liquidation, including the transaction costs of disposing of the Fund’s portfolio investments. Receipt of a liquidation distribution may have negative tax consequences for shareholders. Additionally, during the Funds’ liquidation all or a portion of the Funds’ portfolio may be invested in a manner not consistent with its investment objective and investment policies.
Non-Diversification Risk (ETC 6 Meridian Mega Cap Equity ETF, ETC 6 Meridian Hedged Equity-Index Option Strategy ETF and ETC 6 Meridian Quality Growth ETF). The Funds are a non-diversified investment company under the 1940 Act, meaning that, as compared to a diversified fund, it can invest a greater percentage of its assets in securities issued by or representing a small number of issuers. As a result, the performance of these issuers can have a substantial impact on the Funds’ performance.
Operational Risk. The Funds and its service providers may experience disruptions that arise from human error, processing and communications errors, counterparty or third-party errors, technology or systems failures, any of which may have an adverse impact on the Funds.
Options Risk (ETC 6 Meridian Hedged Equity-Index Strategy ETF). Options give the holder of the option the right to buy (or to sell) a position in a security or in a contract to the writer of the option, at a certain price. They are subject to correlation risk because there may be an imperfect correlation between the options and the securities markets that cause a given transaction to fail to achieve its objectives. The successful use of options depends on the Sub-Adviser’s ability to correctly predict future price fluctuations and the degree of correlation between the options and securities markets. Exchanges can limit the number of positions that can be held or controlled by the Fund or the Sub-Adviser, thus limiting the ability to implement the Fund’s strategies. Options are also particularly subject to leverage risk and can be subject to liquidity risk.
Quality Stocks Risk. Stocks that demonstrate attributes of quality as determined by the Sub-Adviser’s quantitative models may experience lower than expected returns or negative returns. Many factors can affect a stock’s quality and performance and the impact of these factors on a stock is impossible to predict.
Small and Mid-Capitalization Risk. (ETC 6 Meridian Low Beat Equity Strategy ETF, ETC 6 Meridian Small Cap Equity ETF, ETC 6 Meridian Hedged Equity-Index Option Strategy ETF) The small- and mid-capitalization companies in which the Funds invests may be more vulnerable to adverse business or economic events than larger, more established companies, and may underperform other segments of the market or the equity market as a whole.
43
6 Meridian
Notes to Financial Statements
November 30, 2021 (Continued)
6. RISKS OF INVESTING IN THE FUNDS (continued)
Securities of small and mid-capitalization companies generally trade in lower volumes, are often more vulnerable to market volatility, and are subject to greater and more unpredictable price changes than larger capitalization stocks or the stock market as a whole.
Trading Risk. Shares of each Fund may trade on the Exchange above (premium) or below (discount) their NAV. The NAV of shares of the Funds will fluctuate with changes in the market value of a Fund’s holdings. The market prices of each Fund’s shares will fluctuate continuously throughout trading hours based on market supply and demand and may deviate significantly from the value of a Fund’s holdings, particularly in times of market stress, with the result that investors may pay more or receive less than the underlying value of the Fund shares bought or sold. When buying or selling shares in the secondary market, you may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase shares of a Fund (bid) and the lowest price a seller is willing to accept for shares of a Fund (ask), which is known as the bid-ask spread. In addition, although each Fund’s shares are currently listed on the Exchange, there can be no assurance that an active trading market for shares will develop or be maintained. Trading in Fund shares may be halted due to market conditions or for reasons that, in the view of the Exchange, make trading in shares of that Fund inadvisable. In stressed market conditions, the market for a Fund’s shares may become less liquid in response to deteriorating liquidity in the markets for that Fund’s underlying portfolio holdings.
Value Style Risk. (ETC 6 Meridian Mega Cap Equity ETF, ETC 6 Meridian Small Cap Equity ETF and ETC 6 Meridian Hedged Equity-Index Option Strategy ETF) Investing in or having exposure to “value” securities presents the risk that the securities may never reach what the Sub-Adviser believes are their full market values, either because the market fails to recognize what the Sub-Adviser considers to be the security’s true value or the Sub-Adviser misjudged that value. In addition, there may be periods during which the investment performance of the Funds while using a value strategy may suffer.
7. OTHER
At November 30, 2021, the records of the Trust, reflected in the table below, shows the total shares outstanding held by Authorized Participants, in the form of Creation Units. However, the individual shares comprising such Creation Units are listed and traded on the Exchange and have been purchased and sold by persons other than Authorized Participants.
Fund Name |
Total Shares
|
Number of
| ||
ETC 6 Meridian Hedged Equity-Index Option Strategy ETF |
8,350,000 |
3 | ||
ETC 6 Meridian Low Beta Equity Strategy ETF |
4,075,000 |
2 | ||
ETC 6 Meridian Mega Cap Equity ETF |
4,600,000 |
4 | ||
ETC 6 Meridian Small Cap Equity ETF |
1,275,000 |
3 | ||
ETC 6 Meridian Quality Growth ETF |
950,00 |
3 |
8. RECENT MARKET EVENTS
The spread of COVID-19 around the world has caused significant volatility in U.S. and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to the COVID-19
44
6 Meridian
Notes to Financial Statements
November 30, 2021 (Concluded)
pandemic, as well as its impact on the U.S. and international economies. The operational and financial performance of the issuers of securities in which the Funds invest depends on future developments, including the duration and spread of the outbreak, and such developments may in turn impact the value of the Funds’ investments. The ultimate impact of the pandemic on the financial performance of the Funds’ investments is not reasonably estimable at this time.
9. SUBSEQUENT EVENTS
The Funds have evaluated the need for additional disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. Based on this evaluation, no disclosure and/or adjustments were required to the financial statements.
On December 29, 2021, the Funds’ sub-adviser, 6 Meridian LLC, was acquired by Hightower 6M Holding, LLC, a newly formed wholly owned subsidiary of Hightower Holdings, LLC. As of that date, the Adviser entered into a new sub-advisory agreement with Hightower 6M Holding, LLC pursuant to which the same investment sub-advisory services continue to be provided to the Funds.
45
To the Shareholders of ETC 6 Meridian Hedged Equity-Index Option Strategy ETF, ETC 6 Meridian Low Beta Equity Strategy ETF, ETC 6 Meridian Mega Cap Equity ETF, ETC 6 Meridian Small Cap Equity ETF, and ETC 6 Meridian Quality Growth ETF and
Board of Trustees of Exchange Traded Concepts Trust
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of ETC 6 Meridian Hedged Equity-Index Option Strategy ETF (formerly 6 Meridian Hedged Equity-Index Option Strategy ETF), ETC 6 Meridian Low Beta Equity Strategy ETF (formerly 6 Meridian Low Beta Equity Strategy ETF), ETC 6 Meridian Mega Cap Equity ETF (formerly 6 Meridian Mega Cap Equity ETF), ETC 6 Meridian Small Cap Equity ETF (formerly 6 Meridian Small Cap Equity ETF), and ETC 6 Meridian Quality Growth ETF (formerly 6 Meridian Quality Growth ETF) (the “Funds”), each a series of Exchange Traded Concepts Trust, as of November 30, 2021, the related statements of operations, the statements of changes in net assets, the related notes, and the financial highlights for each of the periods indicated below (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of November 30, 2021, the results of their operations, the changes in net assets, and the financial highlights for each of the periods indicated below in conformity with accounting principles generally accepted in the United States of America.
Fund Name |
Statements of Operations |
Statements of Changes in Net Assets |
Financial
|
ETC 6 Meridian Hedged Equity-Index Option Strategy ETF ETC 6 Meridian Low Beta Equity Strategy ETF ETC 6 Meridian Mega Cap Equity ETF ETC 6 Meridian Small Cap Equity ETF |
For the year ended November 30, 2021 |
For the year ended November 30, 2021 and for the period from May 8, 2020 (commencement of operations) through November 30, 2020 | |
ETC 6 Meridian Quality Growth ETF |
For the period from May 10, 2021 (commencement of operations) through November 30, 2021 |
Basis for Opinion
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements 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 Funds 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud.
Our audits 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 November 30, 2021, by correspondence with the custodian and brokers. 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. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more investment companies advised by Exchange Traded Concepts, LLC since 2012.
COHEN & COMPANY,
LTD.
Chicago, Illinois
January 28, 2022
46
Set forth below is information about the Trustees of the Trust. The address of each Trustee of the Trust is c/o Exchange Traded Concepts Trust, 10900 Hefner Pointe Drive, Suite 400, Oklahoma City, Oklahoma 73120. The Fund’s Statement of Additional Information (“SAI”) includes additional information about the Trustees. The SAI may be obtained without charge by calling 833-466-6383.
Name and |
Position(s)
|
Term of
|
Principal
|
Number of
|
Other
|
Interested Trustee |
|
|
|
| |
J. Garrett
Stevens |
Trustee and President |
Trustee (Since 2009); President (Since 2011) |
Investment Adviser/Vice President, T.S. Phillips Investments, Inc. (since 2000); Chief Executive Officer, Exchange Traded Concepts, LLC (since 2009); President, Exchange Traded Concepts Trust (since 2011); President, Exchange Listed Funds Trust (since 2012). |
19 |
None |
Independent Trustees |
|
|
|
| |
Timothy
Jacoby |
Trustee |
Since 2014 |
None. |
37 |
Independent
Trustee, Edward Jones Money Market Fund (since 2017); Audit Committee
Chair, Perth Mint Physical Gold ETF |
Linda
Petrone |
Trustee |
Since 2019 |
Founding
Partner, Sage Search Advisors |
37 |
None. |
Stuart
Strauss(3) |
Trustee |
Since 2021 |
Partner,
Dechert, LLP |
19 |
None. |
Mark
Zurack |
Trustee |
Since 2011 |
Professor,
Columbia Business School |
19 |
Independent Trustee, AQR Funds (35 portfolios) (since 2014); Independent Trustee, Exchange Listed Funds Trust (2019). |
(1) Each Trustee shall serve during the continued life of the Trust until he or she dies, resigns, is declared bankrupt or incompetent by a court of competent jurisdiction, or is removed.
(2) The Fund complex includes each series of the Trust and of Exchange Listed Funds Trust.
(3) Mr. Strauss was appointed as an Independent Trustee effective January 1, 2021.
47
6 Meridian
Trustees and Officers of the Trust
(Unaudited)
(Concluded)
Set forth below is information about each of the persons currently serving as officers of the Trust. The address of J. Garrett Stevens, Richard Hogan, James J. Baker, and Matthew Fleischer is c/o Exchange Traded Concepts Trust, 10900 Hefner Pointe Drive, Suite 400, Oklahoma City, Oklahoma 73120; and the address of Eric Olsen is SEI Investments Company, One Freedom Valley Drive, Oaks, Pennsylvania 19456.
Name and Year of Birth |
Position(s) Held
|
Term of Office
and Length |
Principal
Occupation(s) |
Officers | |||
J. Garrett
Stevens |
Trustee and President |
Trustee (Since 2009); President (Since 2011) |
Investment Adviser/Vice President, T.S. Phillips Investments, Inc. (since 2000); Chief Executive Officer, Exchange Traded Concepts, LLC (since 2009); President, Exchange Listed Funds Trust (since 2012). |
Richard
Hogan |
Secretary |
Since 2011 |
President, Exchange Traded Concepts, LLC (since 2011); Private Investor (since 2003); Trustee and Secretary, Exchange Listed Funds Trust (since 2012); Board Member, Peconic Land Trust (2012 to 2016); Managing Member, Yorkville ETF Advisors (2011 to 2016). |
James
J. Baker Jr. |
Treasurer |
Since 2015 |
Managing Partner, Exchange Traded Concepts, LLC (since 2011); Managing Partner, Yorkville ETF Advisors (2012 to 2016). |
Eric
Olsen |
Assistant Treasurer |
Since 2021 |
Director, Fund Accounting, SEI Investments Global Funds Services (since 2021); Deputy Head of Fund Operations, Traditional Assets, Aberdeen Standard Investments (2013 to 2021). |
Matthew
Fleischer |
Chief Compliance Officer |
Since 2021 |
Associate Counsel, Ameriprise Financial, Columbia Threadneedle Funds (2015 to 2017); Vice President, Compliance, Goldman Sachs Group, Inc., Goldman Sachs Asset Management Funds (2017 to 2021); Chief Compliance Officer, Exchange Listed Funds Trust (since 2021); Chief Compliance Officer, Exchange Traded Concepts Trust (since 2021). |
(1) Each officer serves at the pleasure of the Board.
48
All ETFs have operating expenses. As a shareholder of a Fund you incur an advisory fee. In addition to the advisory fee, a shareholder may pay brokerage expenses, taxes, interest, litigation expenses and other extraordinary expenses (including acquired fund fees and expenses), if any. It is important for you to understand the impact of these ongoing costs of your investment returns. Shareholders may incur brokerage commissions on their purchases and sales of a Fund’s shares, which are not reflected in the examples below.
The following examples use the annualized expense ratio and are intended to help you understand the ongoing costs (in dollars) of investing in a Fund and to compare these costs with those of other funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period (June 1, 2021 to November 30, 2021) (unless otherwise noted below). The table below illustrates a Fund’s cost in two ways:
Actual Fund Return. This section helps you to estimate the actual expenses after fee waivers that your Fund incurred over the period. The “Expenses Paid During Period” column shows the actual dollar expense cost incurred by a $1,000 investment in the Funds, and the “Ending Account Value” number is derived from deducting that expense cost from the Fund’s gross investment return.
You can use this information, together with the actual amount you invested in a Fund, to estimate the expenses you paid over that period. Simply divide your actual account value by $1,000 to arrive at a ratio (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply that ratio by the number shown for your Fund under “Expenses Paid During Period.”
Hypothetical 5% Return. This section helps you compare your Fund’s costs with those of other funds. It assumes that the Funds had an annual 5% return before expenses during the year, but that the expense ratio (Column 3) for the period is unchanged. This example is useful in making comparisons because the Commission requires all funds to make this 5% calculation. You can assess your Fund’s comparative cost by comparing the hypothetical result for your Fund in the “Expenses Paid During Period” column with those that appear in the same charts in the shareholder reports for other funds.
NOTE: Because the return is set at 5% for comparison purposes — NOT your Fund’s actual return — the account values shown may not apply to your specific investment.
|
Beginning
|
Ending
|
Annualized
|
Expenses |
ETC 6 Meridian Hedged Equity-Index Option Strategy ETF | ||||
Actual Fund Return |
$ 1,000.00 |
$ 1,000.20 |
0.85% |
$ 4.26 |
Hypothetical 5% Return |
$ 1,000.00 |
$ 1,020.81 |
0.85% |
$ 4.31 |
ETC 6 Meridian Low Beta Equity Strategy ETF |
||||
Actual Fund Return |
$ 1,000.00 |
$ 998.10 |
0.83% |
$ 4.66 |
Hypothetical 5% Return |
$ 1,000.00 |
$ 1,020.91 |
0.83% |
$ 4.20 |
ETC 6 Meridian Mega Cap Equity ETF |
||||
Actual Fund Return |
$ 1,000.00 |
$ 1,029.80 |
0.83% |
$ 4.22 |
Hypothetical 5% Return |
$ 1,000.00 |
$ 1,020.91 |
0.83% |
$ 4.20 |
ETC 6 Meridian Small Cap Equity ETF |
||||
Actual Fund Return |
$ 1,000.00 |
$ 1,019.40 |
0.89% |
$ 4.51 |
Hypothetical 5% Return |
$ 1,000.00 |
$ 1,020.61 |
0.89% |
$ 4.51 |
ETC 6 Meridian Quality Growth ETF |
||||
Actual Fund Return |
$ 1,000.00 |
$ 1,092.60 |
1.00% |
$ 5.25 |
Hypothetical 5% Return |
$ 1,000.00 |
$ 1,020.05 |
1.00% |
$ 5.06 |
(1) Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).
49
For shareholders that do not have a November 30, 2021 tax year end, this notice is for informational purposes only. For shareholders with a November 30, 2021 tax year end, please consult your tax advisor as to the pertinence of this notice.
For the fiscal year ended November 30, 2021, the Funds is designating the following items with regard to distributions paid during the year.
Return of
|
Ordinary
|
Total
|
Qualifying
|
Qualifying
|
U.S.
|
Interest
|
Qualified
|
Foreign
| ||||||||||
ETC 6 Meridian Hedged Equity-Index Option Strategy ETF |
0.00% |
100.00% |
100.00% |
100.00% |
100.00% |
0.00% |
0.00% |
0.00% |
0.00% | |||||||||
ETC 6 Meridian Low Beta Equity Strategy ETF |
0.00% |
100.00% |
100.00% |
100.00% |
100.00% |
0.00% |
0.01% |
0.00% |
0.00% | |||||||||
ETC 6 Meridian Mega Cap Equity ETF |
0.00% |
100.00% |
100.00% |
100.00% |
100.00% |
0.00% |
0.00% |
100.00% |
0.00% | |||||||||
ETC 6 Meridian Small Cap Equity ETF |
0.00% |
100.00% |
100.00% |
100.00% |
100.00% |
0.00% |
0.00% |
0.00% |
0.00% | |||||||||
ETC 6 Meridian Quality Growth ETF |
100.00% |
0.00% |
100.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
(1) Qualifying dividends represent dividends which qualify for the corporate dividends received deduction and are reflected as a percentage ordinary Income distributions (the total of short-term capital gain and net investment income distributions).
(2) The percentage in this column represents the amount of “Qualifying Dividend Income” as created by the Jobs and Growth Relief Reconciliation Act of 2003 and it’s reflected as a percentage of ordinary income distributions (the total of short-term capital gain and net investment income distributions). It is the intention of the Fund to designate the maximum amount permitted by law.
(3) U.S. Government Interest represents the amount of interest that was derived from U.S. Government obligations and distributed during the fiscal year. Generally, interest from direct U.S. Government obligations is exempt from state income tax.
(4) The percentage in this column represents the amount of “Interest Related Dividends” as created by the American Jobs Creation Act of 2004 and is a percentage of net investment income that is exempt from U.S. withholding tax when paid for foreign investors.
(5) The percentage in this column represents the amount of “Qualifying Short-Term Capital Gain” as created by the American Jobs Creation Act of 2004 and is reflected as a percentage of short-term capital gain distributions that is exempt from U.S. withholding tax when paid to foreign investors.
50
NAV is the price per share at which the Funds issue and redeem shares. It is calculated in accordance with the standard formula for valuing mutual fund shares. The “Market Price” of a Fund generally is determined using the midpoint between the highest bid and the lowest offer on the stock exchange on which the shares of the Fund are listed for trading, as of the time that the Funds’ NAV is calculated. The Fund’s Market Price may be at, above or below its NAV. The NAV of a Fund will fluctuate with changes in the market value of a Fund’s holdings. The Market Price of a Fund will fluctuate in accordance with changes in its NAV, as well as market supply and demand.
Premiums or discounts are the differences (expressed as a percentage) between the NAV and Market Price of the Fund on a given day, generally at the time NAV is calculated. A premium is the amount that a Fund is trading above the reported NAV, expressed as a percentage of the NAV. A discount is the amount that a Fund is trading below the reported NAV, expressed as a percentage of the NAV.
Further
information regarding premiums and discounts is available on the Funds’ website
at
www.6meridianfunds.com.
51
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10900
Hefner Pointe Drive, Suite 400
Oklahoma City, OK 73120
Investment Adviser:
Exchange Traded Concepts, LLC
10900 Hefner Pointe Drive, Suite 400
Oklahoma City, OK 73120
Sub-Adviser:
6 Meridian LLC
8301 E 21st St. North
Suite 150
Wicha, KS 67206
Distributor:
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456
Administrator:
SEI Investments Global Funds Services
One Freedom Valley Drive
Oaks, PA 19456
Legal Counsel:
Morgan, Lewis & Bockius LLP
1111 Pennsylvania Avenue NW
Washington, DC 20004
Independent Registered Public Accounting Firm:
Cohen & Company, Ltd.
151 North Franklin Street
Suite 575
Chicago, IL 60606
This information must be preceded or accompanied by a current prospectus for the Funds.
MER-AR-001-0100