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STRIVE
500 ETF |
Ticker
Symbol: STRV |
STRIVE
EMERGING MARKETS Ex-CHINA ETF |
Ticker
Symbol: STXE |
STRIVE
U.S. ENERGY ETF |
Ticker
Symbol: DRLL |
STRIVE
U.S. SEMICONDUCTOR ETF |
Ticker
Symbol: SHOC |
STRIVE
FAANG 2.0 ETF |
Ticker
Symbol: FTWO |
each
of the above is listed on NYSE Arca, Inc. |
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STRIVE
1000 GROWTH ETF |
Ticker
Symbol: STXG |
STRIVE
1000 VALUE ETF |
Ticker
Symbol: STXV |
STRIVE
SMALL-CAP ETF |
Ticker
Symbol: STXK |
STRIVE
1000 DIVIDEND GROWTH ETF |
Ticker
Symbol: STXD |
each
of the above is listed on The NASDAQ Stock Market,
LLC |
(each
a series of EA Series Trust)
Prospectus
November
30, 2023
(as
supplemented December 8, 2023)
These
securities have not been approved or disapproved by the Securities and Exchange
Commission nor has the Securities and Exchange Commission passed upon the
accuracy or adequacy of this Prospectus. Any representation to the contrary is a
criminal offense.
Strive
500 ETF
Fund
Summary
INVESTMENT
OBJECTIVE
Strive
500 ETF (the “Fund”) seeks to track the total return performance, before fees
and expenses, of an index composed of U.S.-listed large cap equity
securities.
FEES
AND
EXPENSES
This
table describes the fees and expenses that you may pay if you buy, hold, and
sell shares of the Fund (“Shares”). You may also pay brokerage commissions on
the purchase and sale of Shares, which are not reflected in the table or example
below.
ANNUAL
FUND
OPERATING
EXPENSES
(EXPENSES
THAT YOU PAY EACH YEAR AS A PERCENTAGE OF THE VALUE OF YOUR
INVESTMENT)1
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Management
Fee |
0.0545 |
% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00 |
% |
Total
Annual Fund Operating Expenses |
0.0545 |
% |
1The
Fund’s investment advisory agreement provides that the Fund’s investment adviser
will pay substantially all expenses of the Fund, except for the fee payment
under the Fund’s Investment Advisory Agreement, payments under the Fund’s Rule
12b-1 Distribution and Service Plan, brokerage expenses, acquired fund fees and
expenses, taxes, interest (including borrowing costs), litigation expense and
other non-routine or extraordinary expenses. Additionally, the Fund shall be
responsible for its non-operating expenses, and fees and expenses associated
with the Fund’s securities lending program, if applicable.
EXAMPLE
The
following example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other funds. The example assumes that you
invest $10,000 for the time periods indicated and then redeem all of your Shares
at the end of those periods. The example also assumes that the Fund provides a
return of 5% a year and that operating expenses remain the same. You may also
pay brokerage commissions on the purchase and sale of Shares, which are not
reflected in the example. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
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One
Year: |
Three
Years: |
Five
Years: |
Ten
Years: |
$6 |
$18 |
$31 |
$70 |
PORTFOLIO
TURNOVER
The
Fund may pay transaction costs, including commissions when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. For the
fiscal period ended July 31, 2023, the portfolio turnover rate for the Fund was
3% of the average value of its portfolio.
PRINCIPAL
INVESTMENT STRATEGIES
The
Fund’s Investment Strategy
The
Fund seeks to track the investment results of the Solactive GBS United States
500 Index (the “Index”), which is a float-adjusted, capitalization weighted
index consisting of equity securities of the 500 largest companies in the U.S.
stock market.
Securities
are first screened for inclusion in the “Index Universe.” The Index Universe is
exclusively comprised of U.S. equity securities, listed on a U.S. exchange, and
traded in U.S. Dollars.
To
determine the Index components (each an “Index Component” and collectively, the
“Index Components”) all equity securities in the Index Universe are sorted
according to total market capitalization in descending order and ranked. The
largest 500 securities are then selected as Index Components.
Each
Index Component is subsequently assigned a weight based on its free float market
capitalization. The weight represents the percentage amount of the Index
Component as a percentage of the total Index. The Index is calculated as a total
return index in U.S. dollars.
As
of September 30, 2023, approximately 10% of the Index was comprised of
technology companies. The Index Provider currently classifies securities within
the Index utilizing the industry classification analysis of the North America
Industry Classification System, which is a third party that is not affiliated
with the Fund, the Adviser, the Sub-Adviser (as defined below) or the Index
Provider. The components of the Index are likely to change over
time.
The
Index is normally rebalanced on a quarterly basis in February, May, August, and
November.
Strive
Asset Management, LLC (the “Sub-Adviser”) uses a “passive” or indexing approach
to try to achieve the Fund’s investment objective. Unlike many investment
companies, the Fund does not try to “beat” the index it tracks and does not seek
temporary defensive positions when markets decline or appear
overvalued.
Indexing
may eliminate the chance that the Fund will substantially outperform the Index
but also may reduce some of the risks of active management, such as poor
security selection. Indexing seeks to achieve lower costs and better after-tax
performance by aiming to keep portfolio turnover low in comparison to actively
managed investment companies.
Under
normal circumstances, substantially all of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in the component
securities of the Index. The Sub-Adviser expects that, over time, the
correlation between the Fund’s performance and that of the Index, before fees
and expenses, will be 95% or higher.
The
Fund will generally use a “replication” strategy to seek to achieve its
investment objective, meaning the Fund will invest in all of the component
securities of the Index in the same approximate proportions as in the Index, but
may, when the Sub-Adviser believes it is in the best interests of the Fund, use
a “representative sampling” strategy, meaning the Fund may invest in a sample of
the securities in the Index whose risk, return and other characteristics closely
resemble the risk, return and other characteristics of the Index as a
whole.
The
Fund will concentrate its investments (i.e., hold 25% or more of its total
assets) in a particular industry or group of industries to approximately the
same extent that the Index is concentrated.
PRINCIPAL
RISKS
An
investment in the Fund involves risk, including those described below.
There
is no assurance that the Fund will achieve its investment objective.
An investor may lose money by investing in the Fund. An investment in the Fund
is not a bank deposit and is not insured or guaranteed by the FDIC or any
government agency. More complete risk descriptions are set forth below under the
heading “Additional
Information About the Fund’s Principal Risks”.
Large
Capitalization Companies Risk. Large-capitalization
companies may trail the returns of the overall stock market.
Large-capitalization stocks tend to go through cycles of doing better – or worse
– than the stock market in general. These periods have, in the past, lasted for
as long as several years. When large capitalization companies are out of favor,
these securities may lose value or may not appreciate in line with the overall
market. In addition, large capitalization companies may be unable to respond
quickly to new competitive challenges, such as changes in technology or consumer
tastes, and also may not be able to attain the high growth rate of successful
small companies, especially during extended periods of economic
expansion.
Technology
Sector Risk. The
Fund will have exposure to companies operating in the technology sector.
Technology companies, including information technology companies, may have
limited product lines, financial resources and/or personnel. Technology
companies typically face intense competition and potentially rapid product
obsolescence. They are also heavily dependent on intellectual property rights
and may be adversely affected by the loss or impairment of those
rights.
Investment
Risk. When
you sell your Shares of the Fund, they could be worth less than what you paid
for them. The Fund could lose money due to short-term market movements and over
longer periods during market downturns. Securities may decline in value due to
factors affecting securities markets generally or particular asset classes or
industries
represented in the markets. The value of a security may decline due to general
market conditions, economic trends or events that are not specifically related
to the issuer of the security or to factors that affect a particular industry or
group of industries. During a general downturn in the securities markets,
multiple asset classes may be negatively affected. Therefore, you may lose money
by investing in the Fund.
Equity
Investing Risk. An
investment in the Fund involves risks similar to those of investing in any fund
holding equity securities, such as market fluctuations, changes in interest
rates and perceived trends in stock prices. The values of equity securities
could decline generally or could underperform other investments. In addition,
securities may decline in value due to factors affecting a specific issuer,
market or securities markets generally.
Concentration
Risk.
In following its methodology, the Index from time to time may be concentrated to
a significant degree in securities of issuers located in a single industry or
group of industries. To the extent that the Index concentrates in the securities
of issuers in a particular industry or group of industries, the Fund also may
concentrate its investments to approximately the same extent. By concentrating
its investments in an industry or group of industries, the Fund may face more
risks than if it were diversified broadly over numerous industries or groups of
industries. If the Index is not concentrated in a particular industry or group
of industries, the Fund will not concentrate in a particular industry or group
of industries.
Passive
Investment Risk. The
Fund is not actively managed and the Sub-Adviser will not sell any investments
due to current or projected underperformance of the securities, industries or
sector in which it invests, unless the investment is removed from the Index,
sold in connection with a rebalancing of the Index as addressed in the Index
methodology, or sold to comply with the Fund’s investment limitations (for
example, to maintain the Fund’s tax status). The Fund will maintain investments
until changes to its Index are triggered, which could cause the Fund’s return to
be lower than if the Fund employed an active strategy.
Index
Calculation Risk. The
Index relies on various sources of information to assess the criteria of issuers
included in the Index, including fundamental information that may be based on
assumptions and estimates. Neither the Fund, the Adviser, the Sub-Adviser nor
the Index Provider can offer assurances that the Index’s calculation methodology
or sources of information will provide a correct valuation of securities, nor
can they guarantee the availability or timeliness of the production of the
Index.
Tracking
Error Risk. As
with all index funds, the performance of the Fund and its respective Index may
differ from each other for a variety of reasons. For example, the Fund incurs
operating expenses and portfolio transaction costs not incurred by the Index. In
addition, the Fund may not be fully invested in the securities of the Index at
all times or may hold securities not included in the Index.
ETF
Risks.
•Authorized
Participants, Market Makers and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act as
Authorized Participants (“APs”). In addition, there may be a limited number of
market makers and/or liquidity providers in the marketplace. To the extent
either of the following events occur, Fund Shares may trade at a material
discount to NAV and possibly face delisting: (i) APs exit the business or
otherwise become unable to process creation and/or redemption orders and no
other APs step forward to perform these services, or (ii) market makers and/or
liquidity providers exit the business or significantly reduce their business
activities and no other entities step forward to perform their
functions.
•Premium-Discount
Risk. The
Shares may trade above or below their net asset value (“NAV”). The market prices
of Shares will generally fluctuate in accordance with changes in NAV as well as
the relative supply of, and demand for, Shares on NYSE Arca, Inc. (the
“Exchange”) or other securities exchanges. The trading price of Shares may
deviate significantly from NAV during periods of market volatility or limited
trading activity in Shares. In addition, you may incur the cost of the “spread,”
that is, any difference between the bid price and the ask price of the
Shares.
•Cost
of Trading Risk. Investors
buying or selling Shares in the secondary market will pay brokerage commissions
or other charges imposed by brokers as determined by that broker. Brokerage
commissions are often a fixed amount and may be a significant proportional cost
for investors seeking to buy or sell relatively small amounts of Shares. In
addition, secondary market investors will also incur the cost of the difference
between the price that an investor is willing to pay for Shares (the “bid”
price) and the price at which an
investor
is willing to sell Shares (the “ask” price). This difference in bid and ask
prices is often referred to as the “spread” or “bid/ask spread.” The bid/ask
spread varies over time for Shares based on trading volume and market liquidity,
and is generally lower if the Fund’s Shares have more trading volume and market
liquidity and higher if the Fund’s Shares have little trading volume and market
liquidity. Further, increased market volatility may cause increased bid/ask
spreads.
•Trading
Risk. Although
the Shares are listed on the Exchange, there can be no assurance that an active
or liquid trading market for them will develop or be maintained. In addition,
trading in Shares on the Exchange may be halted. In stressed market conditions,
the liquidity of the Fund’s Shares may begin to mirror the liquidity of its
underlying portfolio holdings, which can be less liquid than the Fund’s Shares,
potentially causing the market price of the Fund’s Shares to deviate from its
NAV. The spread varies over time for Shares of the Fund based on the Fund’s
trading volume and market liquidity, and is generally lower if the Fund has high
trading volume and market liquidity, and higher if the Fund has little trading
volume and market liquidity (which is often the case for funds that are newly
launched or small in size).
Index
Rebalance Risk. Because
the Index generally changes its exposure based on data that is analyzed in
connection with a quarterly rebalance (a “Rebalance”), (i) the Index’s exposure
may be affected by significant market movements at or around the time of a
Rebalance that are not predictive of the market’s performance for any subsequent
Rebalance and (ii) changes to the Index’s exposure may lag a significant change
in the market’s direction (up or down) by as long as a quarter if such changes
first take effect at or around the time of a Rebalance. Such lags between market
performance and changes to the Index’s exposure may result in significant
underperformance relative to the broader equity or fixed income
market.
Limited
Operating History Risk. The
Fund is a recently organized management investment company with a limited
operating history. As a result, prospective investors have a limited track
record or history on which to base their investment decision. There can be no
assurance that the Fund will grow to or maintain an economically viable
size.
Geopolitical/Natural
Disaster Risks. The
Fund’s investments are subject to geopolitical and natural disaster risks, such
as war, terrorism, trade disputes, political or economic dysfunction within some
nations, public health crises and related geopolitical events, as well as
environmental disasters, epidemics and/or pandemics, which may add to
instability in world economies and volatility in markets. The impact may be
short-term or may last for extended periods.
PERFORMANCE
Performance
information is not provided below because the Fund has not yet been in operation
for a full calendar year. When provided, the information will provide some
indication of the risks of investing in the Fund by showing how the Fund’s
average annual returns compare with a broad measure of market performance. Past
performance does not necessarily indicate how the Fund will perform in the
future. Performance information is available on the Fund’s website at
www.strivefunds.com or by calling the Fund at (215) 882-9983.
INVESTMENT
ADVISER
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Investment
Adviser: |
Empowered
Funds, LLC dba EA Advisers (“Adviser”) |
Investment
Sub-Adviser: |
Strive
Asset Management, LLC (“Sub-Adviser”) |
PORTFOLIO
MANAGERS
Matthew
Cole, Chief Executive Officer and Chief Investment Officer of Strive and Jeffrey
Sherman a Portfolio Manager of Strive, are each a co-Portfolio Manager of the
Fund and are primarily responsible for the day-to-day management of the Fund.
Mr. Cole has managed the Fund since its inception (September 2022) and Mr.
Sherman has managed the Fund since June 2023.
SUMMARY
INFORMATION
ABOUT
PURCHASES,
SALES,
TAXES,
AND
FINANCIAL
INTERMEDIARY
COMPENSATION
PURCHASE
AND
SALE
OF
FUND
SHARES
The
Fund issues and redeems Shares on a continuous basis only in large blocks of
Shares (e.g., 10,000 Shares) called “Creation Units,” and only APs (typically,
broker-dealers) may purchase or redeem Creation Units. Creation Units generally
are issued and redeemed ‘in-kind’ for securities and partially in cash.
Individual Shares may only be purchased and sold in secondary market
transactions through brokers. Once created, individual Shares generally trade in
the secondary market at market prices that change throughout the day. Market
prices of Shares may be greater or less than their NAV. In addition, if you
purchase Shares through an employee benefit plan, the Sub-Adviser may make
payments to the recordkeeper, broker/dealer, bank, or other financial
institution or organization (each a “Financial Intermediary”) that provides
shareholder recordkeeping or other administrative services to the plan as
compensation for those services. These payments may create a conflict of
interest by influencing your Financial Intermediary to make available the Fund
over other investments. Except
when aggregated in Creation Units, the Fund’s shares are not redeemable
securities.
TAX
INFORMATION
The
Fund’s distributions generally are taxable to you as ordinary income, capital
gain, or some combination of both, unless your investment is in an Individual
Retirement Account (“IRA”) or other tax-advantaged account. However, subsequent
withdrawals from such a tax-advantaged account may be subject to federal income
tax. You should consult your tax advisor about your specific tax
situation.
PURCHASES
THROUGH
BROKER-DEALERS
AND
OTHER
FINANCIAL
INTERMEDIARIES
If
you purchase Shares through a broker-dealer or other financial intermediary, the
Fund and its related companies may pay the intermediary for the sale of Shares
and related services. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your salesperson to
recommend Shares over another investment. Ask your salesperson or visit your
financial intermediary’s website for more information.
STRIVE
1000 GROWTH
ETF
Fund
Summary
INVESTMENT
OBJECTIVE
The
Strive 1000 Growth ETF (the “Fund”) seeks to track the total return performance,
before fees and expenses, of an index composed of large- and mid-capitalization
U.S. equity securities that exhibit growth characteristics.
FEES
AND
EXPENSES
This
table describes the fees and expenses that you may pay if you buy, hold, and
sell shares of the Fund (“Shares”). You may also pay brokerage commissions on
the purchase and sale of Shares, which are not reflected in the table and
example below.
ANNUAL
FUND
OPERATING
EXPENSES
(EXPENSES
THAT YOU PAY EACH YEAR AS A PERCENTAGE OF THE VALUE OF YOUR
INVESTMENT)1
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Management
Fee |
0.18 |
% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00 |
% |
Total
Annual Fund Operating Expenses |
0.18 |
% |
1The
Fund’s investment advisory agreement provides that the Fund’s investment adviser
will pay substantially all expenses of the Fund, except for the fee payment
under the Fund’s Investment Advisory Agreement, payments under the Fund’s Rule
12b-1 Distribution and Service Plan, brokerage expenses, acquired fund fees and
expenses, taxes, interest (including borrowing costs), litigation expense and
other non-routine or extraordinary expenses. Additionally, the Fund shall be
responsible for its non-operating expenses, and fees and expenses associated
with the Fund’s securities lending program, if applicable.
EXAMPLE
The
following example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other funds. The example assumes that you
invest $10,000 for the time periods indicated and then redeem all of your Shares
at the end of those periods. The example also assumes that the Fund provides a
return of 5% a year and that operating expenses remain the same. You may also
pay brokerage commissions on the purchase and sale of Shares, which are not
reflected in the example. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
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One
Year: |
Three
Years: |
Five
Years: |
Ten
Years: |
$18 |
$58 |
$101 |
$230 |
PORTFOLIO
TURNOVER
The
Fund may pay transaction costs, including commissions when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. For the
fiscal period ended July 31, 2023, the portfolio turnover rate for the Fund was
2% of the average value of its portfolio.
PRINCIPAL
INVESTMENT STRATEGIES
The
Fund’s Investment Strategy
The
Fund seeks to track the investment results of the Bloomberg US 1000 Growth Index
(the “Index”), which measures the performance of large- and mid-capitalization
growth companies in the U.S. equity market as determined by Bloomberg (the
“Index Provider” or “Bloomberg”). The Index includes large- and
mid-capitalization companies.
The
Index is a subset of the Bloomberg US 1000 Index (the “Growth Index Universe”),
which measures the performance of the large- and mid-capitalization sector of
the U.S. equity market. As of September 30, 2023, the Index had 700 constituents
and represented approximately 58% of the total market value of the Bloomberg US
1000 Index. As of
September
30, 2023, the range of market capitalizations of issuers included in the
Index was $1.58 billion to $2.68 trillion.
The
Index is a free float-adjusted capitalization-weighted index comprised primarily
of U.S. equity securities issued by the largest growth-oriented U.S. companies.
The Index measures the performance of U.S. equity securities of issuers with
higher forecasted growth, higher valuations, lower earnings yield and
lower dividend yield relative to all issuers included in the Growth Index
Universe. The Index Provider ranks the securities in the Growth Index Universe
according to a value formula that takes into consideration the following
criteria: earnings yield, valuation, dividend yield and growth, each of which
are equal weighted. Within each equal weighted criteria, underlying accounting
screens are assessed. Using current market prices, these accounting screens are
captured at the month end prior to Index rebalancing. Virtually all accounting
screens are based on trailing twelve month data, except for Earnings to Price
ratios, which use forward-looking twelve-month forecasts.
Using
the screens above, the Index selects the highest scoring growth stocks for
inclusion. Specifically, companies that rank highly in terms of growth metrics
(e.g., sales growth) and / or possess high market prices relative to peers
across valuation (e.g., Sales to Price), dividend yield (Dividend to Price), and
earnings metrics (e.g. Earnings to Price) are deemed to be growth
stocks.
Based
on this ranking, the securities that score within the highest 30% of the Growth
Index Universe are included in the Index and market cap weighted. The following
40% of securities are included at a decreasing linear scale with the full 100%
weight given at the 30th percentile and a 0% weight given at the 30th
percentile. The bottom scoring 30% of stocks are excluded from the
Index.
To
be eligible for inclusion in the Index, a security must first meet the following
criteria: (i) it is primarily listed in the United States, (ii) it is listed on
a U.S. exchange, and (iii) the security’s free float must be a minimum of 10% of
the security’s total shares outstanding. The Index includes common stock and
real estate investment trusts.
As
of September 30, 2023, a significant portion of the Index is represented by
securities of companies in the technology, healthcare, and consumer
discretionary sectors. The components of the Index will change over
time.
The
Index is calculated as a total return index in U.S. dollars. The Index is
normally rebalanced on a semi-annual basis in January and July and such changes
take effect in March and September.
Strive
Asset Management, LLC (the “Sub-Adviser”) uses a “passive” or indexing approach
to try to achieve the Fund’s investment objective. Unlike many investment
companies, the Fund does not try to “beat” the index it tracks and does not seek
temporary defensive positions when markets decline or appear
overvalued.
Indexing
may eliminate the chance that the Fund will substantially outperform the Index
but also may reduce some of the risks of active management, such as poor
security selection. Indexing seeks to achieve lower costs and better after-tax
performance by aiming to keep portfolio turnover low in comparison to actively
managed investment companies.
Under
normal circumstances, substantially all of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in component
securities of the Index.
The
Fund will generally use a “replication” strategy to seek to achieve its
investment objective, meaning the Fund will invest in all of the component
securities of the Index in the same approximate proportions as in the Index, but
may, when the Sub-Adviser believes it is in the best interests of the Fund, use
a “representative sampling” strategy, meaning the Fund may invest in a sample of
the securities in the Index whose risk, return and other characteristics closely
resemble the risk, return and other characteristics of the Index as a whole. The
Fund will be reconstituted and rebalanced on the same schedule as the
Index.
The
Fund will concentrate its investments (i.e., hold 25% or more of its total
assets) in a particular industry or group of industries to approximately the
same extent that the Index is concentrated.
PRINCIPAL
RISKS
An
investment in the Fund involves risk, including those described below.
There
is no assurance that the Fund will achieve its investment objective.
An investor may lose money by investing in the Fund. An investment in the Fund
is not a bank deposit and is not insured or guaranteed by the FDIC or any
government agency. More complete risk descriptions are set forth below under the
heading “Additional
Information About the Funds’ Risks”.
Equity
Investing Risk. An
investment in the Fund involves risks similar to those of investing in any fund
holding equity securities, such as market fluctuations, changes in interest
rates and perceived trends in stock prices. The values of equity securities
could decline generally or could underperform other investments. In addition,
securities may decline in value due to factors affecting a specific issuer,
market or securities markets generally.
Growth
Investing Risk. The
Fund invests in growth securities, which may be more volatile than other types
of investments, may perform differently than the market as a whole and may
underperform when compared to securities with different investment parameters.
Under certain market conditions, growth securities have performed better during
the later stages of economic recovery (although there is no guarantee that they
will continue to do so). Therefore, growth securities may go in and out of favor
over time.
Investment
Risk. When
you sell your Shares of the Fund, they could be worth less than what you paid
for them. The Fund could lose money due to short-term market movements and over
longer periods during market downturns. Securities may decline in value due to
factors affecting securities markets generally or particular asset classes or
industries represented in the markets. The value of a security may decline due
to general market conditions, economic trends or events that are not
specifically related to the issuer of the security or to factors that affect a
particular industry or group of industries. During a general downturn in the
securities markets, multiple asset classes may be negatively affected.
Therefore, you may lose money by investing in the Fund.
Large-Capitalization
Companies Risk.
Large-capitalization companies may trail the returns of the overall stock
market. Large-capitalization stocks tend to go through cycles of doing better –
or worse – than the stock market in general. These periods have, in the past,
lasted for as long as several years. When large capitalization companies are out
of favor, these securities may lose value or may not appreciate in line with the
overall market. In addition, large capitalization companies may be unable to
respond quickly to new competitive challenges, such as changes in technology or
consumer tastes, and also may not be able to attain the high growth rate of
successful small companies, especially during extended periods of economic
expansion.
Mid-Capitalization
Companies Risk.
The securities of mid-capitalization companies may be more vulnerable to adverse
issuer, market, political, or economic developments than securities of
larger-capitalization companies. The securities of mid-capitalization companies
generally trade in lower volumes and are subject to greater and more
unpredictable price changes than larger capitalization stocks or the stock
market as a whole. Some mid-capitalization companies have limited product lines,
markets, and financial and managerial resources and tend to concentrate on fewer
geographical markets relative to larger capitalization companies.
Technology
Sector Risk. The
Fund is expected to have exposure to companies operating in the technology
sector,
and therefore, the Fund’s performance could be negatively impacted by events
affecting this sector.
Technology companies, including information technology companies, may have
limited product lines, financial resources and/or personnel. Technology
companies typically face intense competition and potentially rapid product
obsolescence. They are also heavily dependent on intellectual property rights
and may be adversely affected by the loss or impairment of those rights.
Companies in the technology sector also face increased government regulation,
including new regulations and scrutiny related to data privacy, and may be
subject to adverse government or regulatory actions, which may be
costly.
Healthcare
Sector Risk.
The Fund is expected to have exposure to companies in the healthcare
sector,
and therefore, the Fund’s performance could be negatively impacted by events
affecting this sector.
The healthcare sector includes companies relating to medical and healthcare
goods and services, such as companies engaged in manufacturing medical
equipment, supplies and pharmaceuticals, as well as operating healthcare
facilities and the provision of managed healthcare. Companies in this sector may
be affected by government regulations including new regulations and scrutiny
related to data privacy, and government healthcare programs, increases or
decreases in the cost of medical products and services and product liability
claims, among other factors. Many healthcare companies are heavily dependent on
patent protection, and the expiration of a company’s patent may adversely affect
that company’s profitability. Healthcare companies are subject to competitive
forces that may result in price discounting, and may be thinly capitalized and
susceptible to product obsolescence. Companies in the healthcare sector may be
subject to adverse government or regulatory actions, which may be
costly.
Consumer
Discretionary Sector Risk.
The Fund is expected to have exposure to companies in the consumer discretionary
sector, and therefore, the Fund’s performance could be negatively impacted by
events affecting this sector. The consumer discretionary sector includes, for
example, automobile, textile and retail companies. This sector can be
significantly
affected by, among other things, changes in domestic and international
economies, exchange and interest rates, economic growth, worldwide demand,
supply chain constraints and social trends. Success of companies in the consumer
discretionary sector also depends heavily on disposable household income and
consumer spending, which can be negatively impacted by inflationary pressures on
consumers.
Real
Estate Investment Trusts (REITs) Risk.
A REIT is a company that owns or finances income-producing real estate. Through
its investments in REITs, the Fund is subject to the risks of investing in the
real estate market, including decreases in property revenues, increases in
interest rates, increases in property taxes and operating expenses, legal and
regulatory changes, a lack of credit or capital, defaults by borrowers or
tenants, environmental problems and natural disasters. Investments in REITs may
be volatile. REITs are pooled investment vehicles with their own fees and
expenses and the Fund will indirectly bear a proportionate share of those fees
and expenses.
Passive
Investment Risk. The
Fund is not actively managed, and the Sub-Adviser will not sell any investments
due to current or projected underperformance of the securities, industries or
sector in which it invests, unless the investment is removed from the Index,
sold in connection with a rebalancing of the Index as addressed in the Index
methodology, or sold to comply with the Fund’s investment limitations (for
example, to maintain the Fund’s tax status). The Fund will maintain investments
until changes to its Index are triggered, which could cause the Fund’s return to
be lower than if the Fund employed an active strategy.
Index
Calculation Risk. The
Index relies on various sources of information to assess the criteria of issuers
included in the Index, including fundamental information that may be based on
assumptions and estimates. Neither the Fund, the Adviser, the Sub-Adviser nor
the Index Provider can offer assurances that the Index’s calculation methodology
or sources of information will provide a correct valuation of securities, nor
can they guarantee the availability or timeliness of the production of the
Index.
Tracking
Error Risk.
As with all index funds, the performance of the Fund and its respective Index
may differ for a variety of reasons. For example, a Fund incurs operating
expenses and portfolio transaction costs not incurred by the Index. In addition,
the Fund may not be fully invested in the securities of the Index at all times
or may hold securities not included in the Index.
Concentration
Risk. In
following its methodology, the Index from time to time may be concentrated to a
significant degree in securities of issuers located in a single industry or
group of industries. To the extent that the Index concentrates in the securities
of issuers in a particular industry or group of industries, the Fund also may
concentrate its investments to approximately the same extent. By concentrating
its investments in an industry or group of industries, the Fund may face more
risks than if it were diversified broadly over numerous industries or groups of
industries. If the Index is not concentrated in a particular industry or group
of industries, the Fund will not concentrate in a particular industry or group
of industries.
ETF
Risks.
•Authorized
Participants, Market Makers and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act as
Authorized Participants (“APs”). In addition, there may be a limited number of
market makers and/or liquidity providers in the marketplace. To the extent
either of the following events occur, Fund Shares may trade at a material
discount to NAV and possibly face delisting: (i) APs exit the business or
otherwise become unable to process creation and/or redemption orders and no
other APs step forward to perform these services, or (ii) market makers and/or
liquidity providers exit the business or significantly reduce their business
activities and no other entities step forward to perform their
functions.
•Premium-Discount
Risk. The
Shares may trade above or below their net asset value (“NAV”). The market prices
of Shares will generally fluctuate in accordance with changes in NAV as well as
the relative supply of, and demand for, Shares on The NASDAQ Stock Market, LLC
(“Exchange”) or other securities exchanges. The trading price of Shares may
deviate significantly from NAV during periods of market volatility or limited
trading activity in Shares. In addition, you may incur the cost of the “spread,”
that is, any difference between the bid price and the ask price of the
Shares.
•Cost
of Trading Risk. Investors
buying or selling Shares in the secondary market will pay brokerage commissions
or other charges imposed by brokers as determined by that broker. Brokerage
commissions are often a fixed amount and may be a significant proportional cost
for investors seeking to buy or sell relatively
small
amounts of Shares. In addition, secondary market investors will also incur the
cost of the difference between the price that an investor is willing to pay for
Shares (the “bid” price) and the price at which an investor is willing to sell
Shares (the “ask” price). This difference in bid and ask prices is often
referred to as the “spread” or “bid/ask spread.” The bid/ask spread varies over
time for Shares based on trading volume and market liquidity, and is generally
lower if the Fund's Shares have more trading volume and market liquidity and
higher if the Fund's Shares have little trading volume and market liquidity.
Further, increased market volatility may cause increased bid/ask
spreads.
•Trading
Risk. Although
the Shares are listed on the Exchange, there can be no assurance that an active
or liquid trading market for them will be maintained. In addition, trading in
Shares on the Exchange may be halted. In stressed market conditions, the
liquidity of the Fund’s Shares may begin to mirror the liquidity of its
underlying portfolio holdings, which can be less liquid than the Fund’s Shares,
potentially causing the market price of the Fund’s Shares to deviate from its
NAV. The spread varies over time for Shares of the Fund based on the Fund’s
trading volume and market liquidity, and is generally lower if the Fund has high
trading volume and market liquidity, and higher if the Fund has little trading
volume and market liquidity (which is often the case for funds that are newly
launched or small in size).
Index
Rebalance Risk.
Because the Index generally changes its exposure based on data only as of the
last week of January and July, (i) the Index’s exposure may be affected by
significant market movements at or near the rebalance date that are not
predictive of the market’s performance for the subsequent six-month period and
(ii) changes to the Index’s exposure may lag a significant change in the
market’s direction (up or down) by as long as a six months if such changes first
take effect at or near the beginning of a rebalance date. Such lags between
market performance and changes to the Index’s exposure may result in significant
underperformance relative to the broader equity market.
Limited
Operating History Risk. The
Fund is a recently organized management investment company with a limited
operating history. As a result, prospective investors have a limited track
record or history on which to base their investment decision. There can be no
assurance that the Fund will grow to or maintain an economically viable
size.
Geopolitical/Natural
Disaster Risks. The
Fund’s investments are subject to geopolitical and natural disaster risks, such
as war, terrorism, trade disputes, political or economic dysfunction within some
nations, public health crises and related geopolitical events, as well as
environmental disasters, epidemics and/or pandemics, which may add to
instability in world economies and volatility in markets. The impact may be
short-term or may last for extended periods.
PERFORMANCE
Performance
information is not provided below because the Fund has not yet been in operation
for a full calendar year. When provided, the information will provide some
indication of the risks of investing in the Fund by showing how the Fund’s
average annual returns compare with a broad measure of market performance. Past
performance does not necessarily indicate how the Fund will perform in the
future. Performance information is available on the Fund’s website at
www.strivefunds.com or by calling the Fund at (215) 882-9983.
INVESTMENT
ADVISER
AND
INVESTMENT
SUB-ADVISER
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Investment
Adviser: |
Empowered
Funds, LLC dba EA Advisers (“Adviser”) |
Investment
Sub-Adviser: |
Strive
Asset Management, LLC (“Sub-Adviser”) |
PORTFOLIO
MANAGERS
Matthew
Cole, Chief Executive Officer and Chief Investment Officer of Strive and Jeffrey
Sherman a Portfolio Manager of Strive, are each a co-Portfolio Manager of the
Fund and are primarily responsible for the day-to-day management of the Fund.
Mr. Cole has managed the Fund since its inception (November 2022) and Mr.
Sherman has managed the Fund since June 2023.
SUMMARY
INFORMATION
ABOUT
PURCHASES,
SALES,
TAXES,
AND
FINANCIAL
INTERMEDIARY
COMPENSATION
PURCHASE
AND
SALE
OF
FUND
SHARES
The
Fund issues and redeems Shares on a continuous basis only in large blocks of
Shares (e.g., 10,000 Shares) called “Creation Units,” and only APs (typically,
broker-dealers) may purchase or redeem Creation Units. Creation Units generally
are issued and redeemed ‘in-kind’ for securities and partially in cash.
Individual Shares may only be purchased and sold in secondary market
transactions through brokers. Once created, individual Shares generally trade in
the secondary market at market prices that change throughout the day. Market
prices of Shares may be greater or less than their NAV. In addition, if you
purchase Shares through an employee benefit plan, the Sub-Adviser may make
payments to the recordkeeper, broker/dealer, bank, or other financial
institution or organization (each a “Financial Intermediary”) that provides
shareholder recordkeeping or other administrative services to the plan as
compensation for those services. These payments may create a conflict of
interest by influencing your Financial Intermediary to make available the Fund
over other investments. Except
when aggregated in Creation Units, the Fund’s shares are not redeemable
securities.
TAX
INFORMATION
The
Fund’s distributions generally are taxable to you as ordinary income, capital
gain, or some combination of both, unless your investment is in an Individual
Retirement Account (“IRA”) or other tax-advantaged account. However, subsequent
withdrawals from such a tax-advantaged account may be subject to federal income
tax. You should consult your tax advisor about your specific tax
situation.
PURCHASES
THROUGH
BROKER-DEALERS
AND
OTHER
FINANCIAL
INTERMEDIARIES
If
you purchase Shares through a broker-dealer or other financial intermediary, the
Fund and its related companies may pay the intermediary for the sale of Shares
and related services. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your salesperson to
recommend Shares over another investment. Ask your salesperson or visit your
financial intermediary’s website for more information.
STRIVE
1000 VALUE
ETF
Fund
Summary
INVESTMENT
OBJECTIVE
The
Strive 1000 Value ETF (the “Fund”) seeks to track the total return performance,
before fees and expenses, of an index composed of large- and mid-capitalization
U.S. equity securities that exhibit value characteristics.
FEES
AND
EXPENSES
This
table describes the fees and expenses that you may pay if you buy, hold, and
sell shares of the Fund (“Shares”). You may also pay brokerage commissions on
the purchase and sale of Shares, which are not reflected in the table and
example below.
ANNUAL
FUND
OPERATING
EXPENSES
(EXPENSES
THAT YOU PAY EACH YEAR AS A PERCENTAGE OF THE VALUE OF YOUR
INVESTMENT)1
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Management
Fee |
0.18 |
% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00 |
% |
Total
Annual Fund Operating Expenses |
0.18 |
% |
1The
Fund’s investment advisory agreement provides that the Fund’s investment adviser
will pay substantially all expenses of the Fund, except for the fee payment
under the Fund’s Investment Advisory Agreement, payments under the Fund’s Rule
12b-1 Distribution and Service Plan, brokerage expenses, acquired fund fees and
expenses, taxes, interest (including borrowing costs), litigation expense and
other non-routine or extraordinary expenses. Additionally, the Fund shall be
responsible for its non-operating expenses, and fees and expenses associated
with the Fund’s securities lending program, if applicable.
EXAMPLE
The
following example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other funds. The example assumes that you
invest $10,000 for the time periods indicated and then redeem all of your Shares
at the end of those periods. The example also assumes that the Fund provides a
return of 5% a year and that operating expenses remain the same. You may also
pay brokerage commissions on the purchase and sale of Shares, which are not
reflected in the example. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
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One
Year: |
Three
Years: |
Five
Years: |
Ten
Years: |
$18 |
$58 |
$101 |
$230 |
PORTFOLIO
TURNOVER
The
Fund may pay transaction costs, including commissions when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. For the
fiscal period ended July 31, 2023, the portfolio turnover rate for the Fund was
4% of the average value of its portfolio.
PRINCIPAL
INVESTMENT STRATEGIES
The
Fund’s Investment Strategy
The
Fund seeks to track the investment results of the Bloomberg US 1000 Value Index
(the “Index”), which measures the performance of the large- and
mid-capitalization value sector of the U.S. equity market as determined by
Bloomberg (the “Index Provider” or “Bloomberg”). The Index includes large- and
mid-capitalization companies.
The
Index is a subset of the Bloomberg US 1000 Index (the “Value Index Universe”),
which measures the performance of the large- and mid-capitalization sector of
the U.S. equity market. As of September 30, 2023, the Index had 698 constituents
and represented approximately 69% of the total market value of the Bloomberg US
1000 Index. As of
September
30, 2023, the range of market capitalizations of issuers included in the
Index was $1.35 billion to $763.9 billion.
The
Index is a free float-adjusted capitalization-weighted index comprised primarily
of U.S. equity securities issued by the largest value-oriented U.S. companies.
The Index measures the performance of U.S. equity securities of issuers with
higher earnings yield, higher dividend yield and lower forecasted growth and
lower valuations relative to all securities included in the Value Index
Universe. The Index Provider ranks the securities in the Value Index Universe
according to a value formula that takes into consideration the following
criteria: earnings yield, valuation, dividend yield and growth, each of which
are equal weighted. Within each equal weighted criteria, underlying accounting
screens are assessed. Using current market prices, these accounting screens are
captured at the month end prior to Index rebalancing. Virtually all accounting
screens are based on trailing twelve month data, except for Earnings to Price
ratios, which use forward-looking twelve-month forecasts.
Using
the screens above, the Index selects the highest scoring value stocks for
inclusion. Specifically, companies that rank highly in terms of value metrics
(e.g., stable or mature sales growth) and / or possess low market prices
relative to peers across valuation (e.g., Sales to Price), dividend yield
(Dividend to Price), and earnings metrics (e.g. Earnings to Price) are deemed to
be value stocks.
Based
on this ranking, the securities that score within the highest 30% of the Value
Index Universe are included in the Index and are market cap weighted. The
following 40% of securities are included at an increasing linear scale with the
full 100% weight given at the 30th percentile and a 0% weight given at the 70th
percentile. The bottom scoring 30% of stocks are excluded from the
Index.
To
be eligible for inclusion in the Index, a security must meet the following
criteria: (i) it is primarily listed in the United States, (ii) it is listed on
a U.S. exchange, and (iii) the security’s free float must be a minimum of 10% of
the security’s total shares outstanding. The Index includes common stock and
real estate investment trusts.
As
of September 30, 2023, a significant portion of the Index is represented by
securities of companies in the Financials, Healthcare, Industrials and Consumer
Discretionary sectors. The components of the Index will change over
time.
The
Index is calculated as a total return index in U.S. dollars. The Index is
normally reconstituted on a semi-annual basis in January and July and such
changes take effect in March and September. The Index constituents’ weights are
normally updated in June and December.
Strive
Asset Management, LLC (the “Sub-Adviser”) uses a “passive” or indexing approach
to try to achieve the Fund’s investment objective. Unlike many investment
companies, the Fund does not try to “beat” the index it tracks and does not seek
temporary defensive positions when markets decline or appear
overvalued.
Indexing
may eliminate the chance that the Fund will substantially outperform the Index
but also may reduce some of the risks of active management, such as poor
security selection. Indexing seeks to achieve lower costs and better after-tax
performance by aiming to keep portfolio turnover low in comparison to actively
managed investment companies.
Under
normal circumstances, substantially all of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in component
securities of the Index.
The
Fund will generally use a “replication” strategy to seek to achieve its
investment objective, meaning the Fund will invest in all of the component
securities of the Index in the same approximate proportions as in the Index, but
may, when the Sub-Adviser believes it is in the best interests of the Fund, use
a “representative sampling” strategy, meaning the Fund may invest in a sample of
the securities in the Index whose risk, return and other characteristics closely
resemble the risk, return and other characteristics of the Index as a whole. The
Fund will be reconstituted and rebalanced on the same schedule as the
Index.
The
Fund will concentrate its investments (i.e., hold 25% or more of its total
assets) in a particular industry or group of industries to approximately the
same extent that the Index is concentrated.
PRINCIPAL
RISKS
An
investment in the Fund involves risk, including those described below.
There
is no assurance that the Fund will achieve its investment objective.
An investor may lose money by investing in the Fund. An investment in the Fund
is not a bank deposit and is not insured or guaranteed by the FDIC or any
government agency. More complete risk descriptions are set forth below under the
heading “Additional
Information About the Funds’ Risks”.
Equity
Investing Risk. An
investment in the Fund involves risks similar to those of investing in any fund
holding equity securities, such as market fluctuations, changes in interest
rates and perceived trends in stock prices. The values of equity securities
could decline generally or could underperform other investments. In addition,
securities may decline in value due to factors affecting a specific issuer,
market or securities markets generally.
Value
Investing Risk.
Securities issued by companies that may be perceived as undervalued may be
appropriately valued. Value securities may fail to appreciate for long periods
of time or may never realize their full potential value. In addition, the Fund’s
ability to realize any benefits of investing in value securities may depend on
the Fund’s ability to stay invested until the market’s perception of such
securities change. Value securities have generally performed better than
non-value securities during periods of economic recovery (although there is no
assurance that they will continue to do so). Value securities may go in and out
of favor over time.
Investment
Risk. When
you sell your Shares of the Fund, they could be worth less than what you paid
for them. The Fund could lose money due to short-term market movements and over
longer periods during market downturns. Securities may decline in value due to
factors affecting securities markets generally or particular asset classes or
industries represented in the markets. The value of a security may decline due
to general market conditions, economic trends or events that are not
specifically related to the issuer of the security or to factors that affect a
particular industry or group of industries. During a general downturn in the
securities markets, multiple asset classes may be negatively affected.
Therefore, you may lose money by investing in the Fund.
Large-Capitalization
Companies Risk.
Large-capitalization companies may trail the returns of the overall stock
market. Large-capitalization stocks tend to go through cycles of doing better –
or worse – than the stock market in general. These periods have, in the past,
lasted for as long as several years. When large capitalization companies are out
of favor, these securities may lose value or may not appreciate in line with the
overall market. In addition, large capitalization companies may be unable to
respond quickly to new competitive challenges, such as changes in technology or
consumer tastes, and also may not be able to attain the high growth rate of
successful small companies, especially during extended periods of economic
expansion.
Mid-Capitalization
Companies Risk.
The securities of mid-capitalization companies may be more vulnerable to adverse
issuer, market, political, or economic developments than securities of
larger-capitalization companies. The securities of mid-capitalization companies
generally trade in lower volumes and are subject to greater and more
unpredictable price changes than larger capitalization stocks or the stock
market as a whole. Some mid-capitalization companies have limited product lines,
markets, and financial and managerial resources and tend to concentrate on fewer
geographical markets relative to larger capitalization companies.
Healthcare
Sector Risk. The
Fund is expected to have exposure to companies in the healthcare
sector,
and therefore, the Fund’s performance could be negatively impacted by events
affecting this sector.
The healthcare sector includes companies relating to medical and healthcare
goods and services, such as companies engaged in manufacturing medical
equipment, supplies and pharmaceuticals, as well as operating healthcare
facilities and the provision of managed healthcare. Companies in this sector may
be affected by government regulations including new regulations and scrutiny
related to data privacy, and government healthcare programs, increases or
decreases in the cost of medical products and services and product liability
claims, among other factors. Many healthcare companies are heavily dependent on
patent protection, and the expiration of a company’s patent may adversely affect
that company’s profitability. Healthcare companies are subject to competitive
forces that may result in price discounting, and may be thinly capitalized and
susceptible to product obsolescence. Companies in the healthcare sector may be
subject to adverse government or regulatory actions, which may be
costly.
Industrials
Sector Risk.
The Fund is expected to have exposure to companies in the industrials sector,
and therefore, the Fund’s performance could be negatively impacted by events
affecting this sector. The industrials sector includes, for example, aerospace
and defense, non-residential construction, engineering, machinery,
transportation, and commercial and professional services companies. This sector
can be significantly affected by, among other things, business cycle
fluctuations,
worldwide economy growth, international political and economic developments,
exchange rates, commodity prices, environmental issues, government and corporate
spending, supply and demand for specific products and manufacturing, and
government regulation.
Energy
Sector Risk.
The
Fund is expected to have exposure to companies in the industrials sector, and
therefore, the Fund’s performance could be negatively impacted by events
affecting this sector. The
market value of securities in the energy sector may decline for many reasons
including, fluctuations in energy prices and supply and demand of energy fuels
caused by geopolitical events, the success of exploration projects, weather or
meteorological events, taxes, increased governmental or environmental
regulation, resource depletion, rising interest rates, declines in domestic or
foreign production, accidents or catastrophic events that result in injury, loss
of life or property, pollution or other environmental damage claims, terrorist
threats or attacks, among other factors. Markets for various energy-related
commodities can have significant volatility and are subject to control or
manipulation by large producers or purchasers. Companies in the energy sector
may need to make substantial expenditures, and may incur significant amounts of
debt, to maintain or expand their reserves through exploration of new sources of
supply, through the development of existing sources, through acquisitions, or
through long-term contracts to acquire reserves. Factors adversely affecting
producers, refiners, distributors, or others in the energy sector may adversely
affect companies that service or supply those entities, either because demand
for those services or products is curtailed, or those services or products come
under price pressure. Issuers in the energy sector may also be impacted by
changing investor and consumer preferences.
Financials
Sector Risk. The
Fund is expected to have exposure to companies in the financials sector, and
therefore, the Fund’s performance could be negatively impacted by events
affecting this sector. The financials sector includes, for example, banks and
financial institutions providing mortgage and mortgage related services. This
sector can be significantly affected by, among other things, changes in interest
rates, government regulation, the rate of defaults on corporate, consumer and
government debt, the availability and cost of capital, and fallout from the
housing and sub-prime mortgage crisis.
Real
Estate Investment Trusts (REITs) Risk.
A REIT is a company that owns or finances income-producing real estate. Through
its investments in REITs, the Fund is subject to the risks of investing in the
real estate market, including decreases in property revenues, increases in
interest rates, increases in property taxes and operating expenses, legal and
regulatory changes, a lack of credit or capital, defaults by borrowers or
tenants, environmental problems and natural disasters. Investments in REITs may
be volatile. REITs are pooled investment vehicles with their own fees and
expenses and the Fund will indirectly bear a proportionate share of those fees
and expenses.
Consumer
Discretionary Sector Risk.
The Fund is expected to have exposure to companies in the consumer discretionary
sector, and therefore, the Fund’s performance could be negatively impacted by
events affecting this sector. The consumer discretionary sector includes, for
example, automobile, textile and retail companies. This sector can be
significantly affected by, among other things, changes in domestic and
international economies, exchange and interest rates, economic growth, worldwide
demand, supply chain constraints, and social trends. Success of companies in the
consumer discretionary sector also depends heavily on disposable household
income and consumer spending, which can be negatively impacted by inflationary
pressures on consumers.
Passive
Investment Risk. The
Fund is not actively managed, and the Sub-Adviser will not sell any investments
due to current or projected underperformance of the securities, industries or
sector in which it invests, unless the investment is removed from the Index,
sold in connection with a rebalancing of the Index as addressed in the Index
methodology, or sold to comply with the Fund’s investment limitations (for
example, to maintain the Fund’s tax status). The Fund will maintain investments
until changes to its Index are triggered, which could cause the Fund’s return to
be lower than if the Fund employed an active strategy.
Concentration
Risk. In
following its methodology, the Index from time to time may be concentrated to a
significant degree in securities of issuers located in a single industry or
group of industries. To the extent that the Index concentrates in the securities
of issuers in a particular industry or group of industries, the Fund also may
concentrate its investments to approximately the same extent. By concentrating
its investments in an industry or group of industries, the Fund may face more
risks than if it were diversified broadly over numerous industries or groups of
industries. If the Index is not concentrated in a particular industry or group
of industries, the Fund will not concentrate in a particular industry or group
of industries.
Index
Calculation Risk. The
Index relies on various sources of information to assess the criteria of issuers
included in the Index, including fundamental information that may be based on
assumptions and estimates. Neither the Fund, the Adviser, the Sub-Adviser nor
the Index Provider can offer assurances that the Index’s calculation methodology
or sources of information will provide a correct valuation of securities, nor
can they guarantee the availability or timeliness of the production of the
Index.
Tracking
Error Risk.
As with all index funds, the performance of the Fund and its respective Index
may differ for a variety of reasons. For example, a Fund incurs operating
expenses and portfolio transaction costs not incurred by the Index. In addition,
the Fund may not be fully invested in the securities of the Index at all times
or may hold securities not included in the Index.
ETF
Risks.
•Authorized
Participants, Market Makers and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act as
Authorized Participants (“APs”). In addition, there may be a limited number of
market makers and/or liquidity providers in the marketplace. To the extent
either of the following events occur, Fund Shares may trade at a material
discount to NAV and possibly face delisting: (i) APs exit the business or
otherwise become unable to process creation and/or redemption orders and no
other APs step forward to perform these services, or (ii) market makers and/or
liquidity providers exit the business or significantly reduce their business
activities and no other entities step forward to perform their
functions.
•Premium-Discount
Risk. The
Shares may trade above or below their net asset value (“NAV”). The market prices
of Shares will generally fluctuate in accordance with changes in NAV as well as
the relative supply of, and demand for, Shares on The NASDAQ Stock Market, LLC
(“Exchange”) or other securities exchanges. The trading price of Shares may
deviate significantly from NAV during periods of market volatility or limited
trading activity in Shares. In addition, you may incur the cost of the “spread,”
that is, any difference between the bid price and the ask price of the
Shares.
•Cost
of Trading Risk. Investors
buying or selling Shares in the secondary market will pay brokerage commissions
or other charges imposed by brokers as determined by that broker. Brokerage
commissions are often a fixed amount and may be a significant proportional cost
for investors seeking to buy or sell relatively small amounts of Shares. In
addition, secondary market investors will also incur the cost of the difference
between the price that an investor is willing to pay for Shares (the “bid”
price) and the price at which an investor is willing to sell Shares (the “ask”
price). This difference in bid and ask prices is often referred to as the
“spread” or “bid/ask spread.” The bid/ask spread varies over time for Shares
based on trading volume and market liquidity, and is generally lower if the
Fund's Shares have more trading volume and market liquidity and higher if the
Fund's Shares have little trading volume and market liquidity. Further,
increased market volatility may cause increased bid/ask spreads.
•Trading
Risk. Although
the Shares are listed on the Exchange, there can be no assurance that an active
or liquid trading market for them will be maintained. In addition, trading in
Shares on the Exchange may be halted. In stressed market conditions, the
liquidity of the Fund’s Shares may begin to mirror the liquidity of its
underlying portfolio holdings, which can be less liquid than the Fund’s Shares,
potentially causing the market price of the Fund’s Shares to deviate from its
NAV. The spread varies over time for Shares of the Fund based on the Fund’s
trading volume and market liquidity, and is generally lower if the Fund has high
trading volume and market liquidity, and higher if the Fund has little trading
volume and market liquidity (which is often the case for funds that are newly
launched or small in size).
Index
Rebalance Risk.
Because the Index generally changes its exposure based on data only as of the
last week of January and July, (i) the Index’s exposure may be affected by
significant market movements at or near the rebalance date that are not
predictive of the market’s performance for the subsequent six-month period and
(ii) changes to the Index’s exposure may lag a significant change in the
market’s direction (up or down) by as long as six months if such changes first
take effect at or near the beginning of a quarter. Such lags between market
performance and changes to the Index’s exposure may result in significant
underperformance relative to the broader equity or fixed income market. Unusual
market conditions may cause the Index Provider to postpone a scheduled
rebalance, which could cause the Index to vary from its normal or expected
composition.
Limited
Operating History Risk. The
Fund is a recently organized management investment company with a limited
operating history. As a result, prospective investors have a limited track
record or history on which to base their investment decision. There can be no
assurance that the Fund will grow to or maintain an economically viable
size.
Geopolitical/Natural
Disaster Risks. The
Fund’s investments are subject to geopolitical and natural disaster risks, such
as war, terrorism, trade disputes, political or economic dysfunction within some
nations, public health crises and related geopolitical events, as well as
environmental disasters, epidemics and/or pandemics, which may add to
instability in world economies and volatility in markets. The impact may be
short-term or may last for extended periods.
PERFORMANCE
Performance
information is not provided below because the Fund has not yet been in operation
for a full calendar year. When provided, the information will provide some
indication of the risks of investing in the Fund by showing how the Fund’s
average annual returns compare with a broad measure of market performance. Past
performance does not necessarily indicate how the Fund will perform in the
future. Performance information is available on the Fund’s website at
www.strivefunds.com or by calling the Fund at (215) 882-9983.
INVESTMENT
ADVISER
AND
INVESTMENT
SUB-ADVISER
|
|
|
|
|
|
Investment
Adviser: |
Empowered
Funds, LLC dba EA Advisers (“Adviser”) |
Investment
Sub-Adviser: |
Strive
Asset Management, LLC (“Sub-Adviser”) |
PORTFOLIO
MANAGERS
Matthew
Cole, Chief Executive Officer and Chief Investment Officer of Strive and Jeffrey
Sherman a Portfolio Manager of Strive, are each a co-Portfolio Manager of the
Fund and are primarily responsible for the day-to-day management of the Fund.
Mr. Cole has managed the Fund since its inception (November 2022) and Mr.
Sherman has managed the Fund since June 2023.
SUMMARY
INFORMATION
ABOUT
PURCHASES,
SALES,
TAXES,
AND
FINANCIAL
INTERMEDIARY
COMPENSATION
PURCHASE
AND
SALE
OF
FUND
SHARES
The
Fund issues and redeems Shares on a continuous basis only in large blocks of
Shares (e.g., 10,000 Shares) called “Creation Units,” and only APs (typically,
broker-dealers) may purchase or redeem Creation Units. Creation Units generally
are issued and redeemed ‘in-kind’ for securities and partially in cash.
Individual Shares may only be purchased and sold in secondary market
transactions through brokers. Once created, individual Shares generally trade in
the secondary market at market prices that change throughout the day. Market
prices of Shares may be greater or less than their NAV. In addition, if you
purchase Shares through an employee benefit plan, the Sub-Adviser may make
payments to the recordkeeper, broker/dealer, bank, or other financial
institution or organization (each a “Financial Intermediary”) that provides
shareholder recordkeeping or other administrative services to the plan as
compensation for those services. These payments may create a conflict of
interest by influencing your Financial Intermediary to make available the Fund
over other investments. Except
when aggregated in Creation Units, the Fund’s shares are not redeemable
securities.
TAX
INFORMATION
The
Fund’s distributions generally are taxable to you as ordinary income, capital
gain, or some combination of both, unless your investment is in an Individual
Retirement Account (“IRA”) or other tax-advantaged account. However, subsequent
withdrawals from such a tax-advantaged account may be subject to federal income
tax. You should consult your tax advisor about your specific tax
situation.
PURCHASES
THROUGH
BROKER-DEALERS
AND
OTHER
FINANCIAL
INTERMEDIARIES
If
you purchase Shares through a broker-dealer or other financial intermediary, the
Fund and its related companies may pay the intermediary for the sale of Shares
and related services. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your salesperson to
recommend Shares over another investment. Ask your salesperson or visit your
financial intermediary’s website for more information.
STRIVE
SMALL-CAP
ETF
Fund
Summary
INVESTMENT
OBJECTIVE
The
Strive Small-Cap ETF (the “Fund”) seeks to track the total return performance,
before fees and expenses, of an index composed of U.S. small-capitalization
companies.
FEES
AND
EXPENSES
This
table describes the fees and expenses that you may pay if you buy, hold, and
sell shares of the Fund (“Shares”). You may also pay brokerage commissions on
the purchase and sale of Shares, which are not reflected in the table and
example below.
ANNUAL
FUND
OPERATING
EXPENSES
(EXPENSES
THAT YOU PAY EACH YEAR AS A PERCENTAGE OF THE VALUE OF YOUR
INVESTMENT)1
|
|
|
|
|
|
Management
Fee |
0.18 |
% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses2 |
0.00 |
% |
Total
Annual Fund Operating Expenses |
0.18 |
% |
1The
Fund’s investment advisory agreement provides that the Fund’s investment adviser
will pay substantially all expenses of the Fund, except for the fee payment
under the Fund’s Investment Advisory Agreement, payments under the Fund’s Rule
12b-1 Distribution and Service Plan, brokerage expenses, acquired fund fees and
expenses, taxes, interest (including borrowing costs), litigation expense and
other non-routine or extraordinary expenses. Additionally, the Fund shall be
responsible for its non-operating expenses, and fees and expenses associated
with the Fund’s securities lending program, if applicable.
EXAMPLE
The
following example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other funds. The example assumes that you
invest $10,000 for the time periods indicated and then redeem all of your Shares
at the end of those periods. The example also assumes that the Fund provides a
return of 5% a year and that operating expenses remain the same. You may also
pay brokerage commissions on the purchase and sale of Shares, which are not
reflected in the example. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
|
|
|
|
|
|
|
|
|
|
|
|
One
Year: |
Three
Years: |
Five
Years: |
Ten
Years: |
$18 |
$58 |
$101 |
$230 |
PORTFOLIO
TURNOVER
The
Fund may pay transaction costs, including commissions when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. For the
fiscal period ended July 31, 2023, the portfolio turnover rate for the Fund was
20% of the average value of its portfolio.
PRINCIPAL
INVESTMENT STRATEGIES
The
Fund’s Investment Strategy
The
Fund seeks to track the investment results of the Bloomberg US 600 Index (the
“Index”), which measures the performance of the small-capitalization sector in
the U.S. equity market as determined by Bloomberg (the “Index Provider” or
“Bloomberg”).
The
Index is a free float-adjusted capitalization-weighted index comprised primarily
of U.S. equity securities. The Index is a subset of the Bloomberg US 3000 Index,
which measures the performance of the broad U.S. equity market, and the
Bloomberg US 1500 Index, which consists of the securities ranked 1 to 1500 by
market capitalization in the Bloomberg US 3000 Index. The Index consists of the
lower 600 in capitalization of the Bloomberg US 1500 Index (i.e., 901 to
1500).
The Index primarily measures the performance of the small-capitalization sector
of the U.S. equity market. As of September 30, 2023, the Index had 593
constituents and represented approximately 7% of the total market value of the
Bloomberg US 3000 Index. As of September 30, 2023, the range of market
capitalizations of issuers included in the Index was $876.5 million to $6.5
billion. The average market cap of the Index was $3.3 billion.
To
be eligible for inclusion in the Index, a security must first meet the following
criteria: (i) it is primarily listed in the United States, (ii) it is listed on
a U.S. exchange, and (iii) the security’s free float must be a minimum of 10% of
the security’s total shares outstanding. The Index includes common stock and
real estate investment trusts.
As
of September 30, 2023, a significant portion of the Index is represented by
securities of companies in the Financials, Industrials, Technology, Consumer
Discretionary, and Healthcare sectors. The components of the Index are likely to
change over time.
The
Index is calculated as a total return index in U.S. dollars. The Index is
normally rebalanced on a semi-annual basis in January and July and such changes
take effect in March and September. The Index constituents’ weights are normally
updated in June and December.
Under
normal circumstances, substantially all, but at least 80%, of the Fund’s total
assets (exclusive of collateral held from securities lending) will be invested
in U.S. small cap equity securities.
Strive
Asset Management, LLC (the “Sub-Adviser”) uses a “passive” or indexing approach
to try to achieve the Fund’s investment objective. Unlike many investment
companies, the Fund does not try to “beat” the index it tracks and does not seek
temporary defensive positions when markets decline or appear
overvalued.
Indexing
may eliminate the chance that the Fund will substantially outperform the Index
but also may reduce some of the risks of active management, such as poor
security selection. Indexing seeks to achieve lower costs and better after-tax
performance by aiming to keep portfolio turnover low in comparison to actively
managed investment companies.
The
Fund will generally use a “replication” strategy to seek to achieve its
investment objective, meaning the Fund will invest in all of the component
securities of the Index in the same approximate proportions as in the Index, but
may, when the Sub-Adviser believes it is in the best interests of the Fund, use
a “representative sampling” strategy, meaning the Fund may invest in a sample of
the securities in the Index whose risk, return and other characteristics closely
resemble the risk, return and other characteristics of the Index as a whole. The
Fund will be reconstituted and rebalanced on the same schedule as the
Index.
The
Fund will concentrate its investments (i.e., hold 25% or more of its total
assets) in a particular industry or group of industries to approximately the
same extent that the Index is concentrated.
PRINCIPAL
RISKS
An
investment in the Fund involves risk, including those described below.
There
is no assurance that the Fund will achieve its investment objective.
An investor may lose money by investing in the Fund. An investment in the Fund
is not a bank deposit and is not insured or guaranteed by the FDIC or any
government agency. More complete risk descriptions are set forth below under the
heading “Additional
Information About the Funds’ Risks”.
Equity
Investing Risk. An
investment in the Fund involves risks similar to those of investing in any fund
holding equity securities, such as market fluctuations, changes in interest
rates and perceived trends in stock prices. The values of equity securities
could decline generally or could underperform other investments. In addition,
securities may decline in value due to factors affecting a specific issuer,
market or securities markets generally.
Investment
Risk. When
you sell your Shares of the Fund, they could be worth less than what you paid
for them. The Fund could lose money due to short-term market movements and over
longer periods during market downturns. Securities may decline in value due to
factors affecting securities markets generally or particular asset classes or
industries represented in the markets. The value of a security may decline due
to general market conditions, economic trends or events that are not
specifically related to the issuer of the security or to factors that affect a
particular industry or group of industries. During a general downturn in the
securities markets, multiple asset classes may be negatively affected.
Therefore, you may lose money by investing in the Fund.
Mid-Capitalization
Companies Risk.
The securities of mid-capitalization companies may be more vulnerable to adverse
issuer, market, political, or economic developments than securities of
larger-capitalization companies. The securities of mid-capitalization companies
generally trade in lower volumes and are subject to greater and more
unpredictable price changes than larger capitalization stocks or the stock
market as a whole. Some mid-capitalization companies have limited product lines,
markets, and financial and managerial resources and tend to concentrate on fewer
geographical markets relative to larger capitalization companies.
Small-Capitalization
Companies Risk.
The securities of small-capitalization companies may be more vulnerable to
adverse issuer, market, political, or economic developments than securities of
large- or mid-capitalization companies. The securities of small-capitalization
companies generally trade in lower volumes and during adverse circumstances, may
be more difficult to sell and receive a sales price comparable to the value
assigned to the security by the Fund. These securities are subject to greater
and more unpredictable price changes than large- or mid-capitalization stocks or
the stock market as a whole. There is typically less publicly available
information concerning smaller-capitalization companies than for larger, more
established companies, which may make the valuation of such securities more
difficult if there isn’t a readily available market price.
Technology
Sector Risk. The
Fund is expected to have exposure to companies operating in the technology
sector,
and therefore, the Fund’s performance could be negatively impacted by events
affecting this sector.
Technology companies, including information technology companies, may have
limited product lines, financial resources and/or personnel. Technology
companies typically face intense competition and potentially rapid product
obsolescence. They are also heavily dependent on intellectual property rights
and may be adversely affected by the loss or impairment of those rights.
Companies in the technology sector also face increased government regulation,
including new regulations and scrutiny related to data privacy, and may be
subject to adverse government or regulatory actions, which may be
costly.
Healthcare
Sector Risk. The
Fund is expected to have exposure to companies in the healthcare
sector,
and therefore, the Fund’s performance could be negatively impacted by events
affecting this sector.
The healthcare sector includes companies relating to medical and healthcare
goods and services, such as companies engaged in manufacturing medical
equipment, supplies and pharmaceuticals, as well as operating healthcare
facilities and the provision of managed healthcare. Companies in this sector may
be affected by government regulations, including new regulations and scrutiny
related to data privacy, and government healthcare programs, increases or
decreases in the cost of medical products and services and product liability
claims, among other factors. Many healthcare companies are heavily dependent on
patent protection, and the expiration of a company’s patent may adversely affect
that company’s profitability. Healthcare companies are subject to competitive
forces that may result in price discounting, and may be thinly capitalized and
susceptible to product obsolescence. Companies in the healthcare sector may be
subject to adverse government or regulatory actions, which may be
costly.
Industrials
Sector Risk. The
Fund is expected to have exposure to companies in the Industrials sector, and
therefore, the Fund’s performance could be negatively impacted by events
affecting this sector The industrials sector includes, for example, aerospace
and defense, non-residential construction, engineering, machinery,
transportation, and commercial and professional services companies. This sector
can be significantly affected by, among other things, business cycle
fluctuations, worldwide economy growth, international political and economic
developments, exchange rates, commodity prices, environmental issues, government
and corporate spending, supply and demand for specific products and
manufacturing, and government regulation.
Consumer
Discretionary Sector Risk.
The Fund is expected to have exposure to companies in the consumer discretionary
sector, and therefore, the Fund’s performance could be negatively impacted by
events affecting this sector. The consumer discretionary sector includes, for
example, automobile, textile and retail companies. This sector can be
significantly affected by, among other things, changes in domestic and
international economies, exchange and interest rates, economic growth, worldwide
demand, supply chain constraints, and social trends. Success of companies in the
consumer discretionary sector also depends heavily on disposable household
income and consumer spending, which can be negatively impacted by inflationary
pressures on consumers.
Financials
Sector Risk. The
Fund is expected to have exposure to companies in the financials sector, and
therefore, the Fund’s performance could be negatively impacted by events
affecting this sector. The financials sector includes, for example, banks and
financial institutions providing mortgage and mortgage related services. This
sector can be significantly affected by, among other things, changes in interest
rates, government regulation, the rate of defaults on
corporate,
consumer and government debt, the availability and cost of capital, and fallout
from the housing and sub-prime mortgage crisis.
Real
Estate Investment Trusts (REITs) Risk. A
REIT is a company that owns or finances income-producing real estate. Through
its investments in REITs, the Fund is subject to the risks of investing in the
real estate market, including decreases in property revenues, increases in
interest rates, increases in property taxes and operating expenses, legal and
regulatory changes, a lack of credit or capital, defaults by borrowers or
tenants, environmental problems and natural disasters. Investments in REITs may
be volatile. REITs are pooled investment vehicles with their own fees and
expenses and the Fund will indirectly bear a proportionate share of those fees
and expenses.
Passive
Investment Risk. The
Fund is not actively managed, and the Sub-Adviser will not sell any investments
due to current or projected underperformance of the securities, industries or
sector in which it invests, unless the investment is removed from the Index,
sold in connection with a rebalancing of the Index as addressed in the Index
methodology, or sold to comply with the Fund’s investment limitations (for
example, to maintain the Fund’s tax status). The Fund will maintain investments
until changes to its Index are triggered, which could cause the Fund’s return to
be lower than if the Fund employed an active strategy.
Index
Calculation Risk. The
Index relies on various sources of information to assess the criteria of issuers
included in the Index, including fundamental information that may be based on
assumptions and estimates. Neither the Fund, the Adviser, the Sub-Adviser nor
the Index Provider can offer assurances that the Index’s calculation methodology
or sources of information will provide a correct valuation of securities, nor
can they guarantee the availability or timeliness of the production of the
Index.
Concentration
Risk.
In following its methodology, the Index from time to time may be concentrated to
a significant degree in securities of issuers located in a single industry or
group of industries. To the extent that the Index concentrates in the securities
of issuers in a particular industry or group of industries, the Fund also may
concentrate its investments to approximately the same extent. By concentrating
its investments in an industry or group of industries, the Fund may face more
risks than if it were diversified broadly over numerous industries or groups of
industries. If the Index is not concentrated in a particular industry or group
of industries, the Fund will not concentrate in a particular industry or group
of industries.
Tracking
Error Risk.
As with all index funds, the performance of the Fund and its respective Index
may differ for a variety of reasons. For example, a Fund incurs operating
expenses and portfolio transaction costs not incurred by the Index. In addition,
the Fund may not be fully invested in the securities of the Index at all times
or may hold securities not included in the Index.
ETF
Risks.
•Authorized
Participants, Market Makers and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act as
Authorized Participants (“APs”). In addition, there may be a limited number of
market makers and/or liquidity providers in the marketplace. To the extent
either of the following events occur, Fund Shares may trade at a material
discount to NAV and possibly face delisting: (i) APs exit the business or
otherwise become unable to process creation and/or redemption orders and no
other APs step forward to perform these services, or (ii) market makers and/or
liquidity providers exit the business or significantly reduce their business
activities and no other entities step forward to perform their
functions.
•Premium-Discount
Risk. The
Shares may trade above or below their net asset value (“NAV”). The market prices
of Shares will generally fluctuate in accordance with changes in NAV as well as
the relative supply of, and demand for, Shares on The NASDAQ Stock Market, LLC
(“Exchange”) or other securities exchanges. The trading price of Shares may
deviate significantly from NAV during periods of market volatility or limited
trading activity in Shares. In addition, you may incur the cost of the “spread,”
that is, any difference between the bid price and the ask price of the
Shares.
•Cost
of Trading Risk.
Investors buying or selling Shares in the secondary market will pay brokerage
commissions or other charges imposed by brokers as determined by that broker.
Brokerage commissions are often a fixed amount and may be a significant
proportional cost for investors seeking to buy or sell relatively small amounts
of Shares. In addition, secondary market investors will also incur the cost of
the difference between the price that an investor is willing to pay for Shares
(the “bid” price) and the price at which an
investor
is willing to sell Shares (the “ask” price). This difference in bid and ask
prices is often referred to as the “spread” or “bid/ask spread.” The bid/ask
spread varies over time for Shares based on trading volume and market liquidity,
and is generally lower if the Fund’s Shares have more trading volume and market
liquidity and higher if the Fund’s Shares have little trading volume and market
liquidity. Further, increased market volatility may cause increased bid/ask
spreads.
•Trading
Risk. Although
the Shares are listed on the Exchange, there can be no assurance that an active
or liquid trading market for them will be maintained. In addition, trading in
Shares on the Exchange may be halted. In stressed market conditions, the
liquidity of the Fund’s Shares may begin to mirror the liquidity of its
underlying portfolio holdings, which can be less liquid than the Fund’s Shares,
potentially causing the market price of the Fund’s Shares to deviate from its
NAV. The spread varies over time for Shares of the Fund based on the Fund’s
trading volume and market liquidity, and is generally lower if the Fund has high
trading volume and market liquidity, and higher if the Fund has little trading
volume and market liquidity (which is often the case for funds that are newly
launched or small in size).
Index
Rebalance Risk.
Because the Index generally changes its exposure based on data only as of the
last week of January and July, (i) the Index’s exposure may be affected by
significant market movements at or near the rebalance date that are not
predictive of the market’s performance for the subsequent six-month period and
(ii) changes to the Index’s exposure may lag a significant change in the
market’s direction (up or down) by as long as a six-months if such changes first
take effect at or near the beginning of a rebalance date. Such lags between
market performance and changes to the Index’s exposure may result in significant
underperformance relative to the broader equity market. Unusual market
conditions may cause the Index Provider to postpone a scheduled rebalance, which
could cause the Index to vary from its normal or expected
composition.
Limited
Operating History Risk. The
Fund is a recently organized management investment company with a limited
operating history. As a result, prospective investors have a limited track
record or history on which to base their investment decision. There can be no
assurance that the Fund will grow to or maintain an economically viable
size.
Geopolitical/Natural
Disaster Risks. The
Fund’s investments are subject to geopolitical and natural disaster risks, such
as war, terrorism, trade disputes, political or economic dysfunction within some
nations, public health crises and related geopolitical events, as well as
environmental disasters, epidemics and/or pandemics, which may add to
instability in world economies and volatility in markets. The impact may be
short-term or may last for extended periods.
PERFORMANCE
Performance
information is not provided below because the Fund has not yet been in operation
for a full calendar year. When provided, the information will provide some
indication of the risks of investing in the Fund by showing how the Fund’s
average annual returns compare with a broad measure of market performance. Past
performance does not necessarily indicate how the Fund will perform in the
future. Performance information is available on the Fund’s website at
www.strivefunds.com or by calling the Fund at (215) 882-9983.
INVESTMENT
ADVISER
AND
INVESTMENT
SUB-ADVISER
|
|
|
|
|
|
Investment
Adviser: |
Empowered
Funds, LLC dba EA Advisers (“Adviser”) |
Investment
Sub-Adviser: |
Strive
Asset Management, LLC (“Sub-Adviser”) |
PORTFOLIO
MANAGERS
Matthew
Cole, Chief Executive Officer and Chief Investment Officer of Strive and Jeffrey
Sherman a Portfolio Manager of Strive, are each a co-Portfolio Manager of the
Fund and are primarily responsible for the day-to-day management of the Fund.
Mr. Cole has managed the Fund since its inception (November 2022) and Mr.
Sherman has managed the Fund since June 2023.
SUMMARY
INFORMATION
ABOUT PURCHASES,
SALES,
TAXES,
AND FINANCIAL
INTERMEDIARY
COMPENSATION
PURCHASE
AND
SALE
OF FUND
SHARES
The
Fund issues and redeems Shares on a continuous basis only in large blocks of
Shares (e.g., 10,000 Shares) called “Creation Units,” and only APs (typically,
broker-dealers) may purchase or redeem Creation Units. Creation Units generally
are issued and redeemed ‘in-kind’ for securities and partially in cash.
Individual Shares may only be purchased and sold in secondary market
transactions through brokers. Once created, individual Shares generally trade in
the secondary market at market prices that change throughout the day. Market
prices of Shares may be greater or less than their NAV. In addition, if you
purchase Shares through an employee benefit plan, the Sub-Adviser may make
payments to the recordkeeper, broker/dealer, bank, or other financial
institution or organization (each a “Financial Intermediary”) that provides
shareholder recordkeeping or other administrative services to the plan as
compensation for those services. These payments may create a conflict of
interest by influencing your Financial Intermediary to make available the Fund
over other investments. Except
when aggregated in Creation Units, the Fund’s shares are not redeemable
securities.
TAX
INFORMATION
The
Fund’s distributions generally are taxable to you as ordinary income, capital
gain, or some combination of both, unless your investment is in an Individual
Retirement Account (“IRA”) or other tax-advantaged account. However, subsequent
withdrawals from such a tax-advantaged account may be subject to federal income
tax. You should consult your tax advisor about your specific tax
situation.
PURCHASES
THROUGH
BROKER-DEALERS
AND
OTHER
FINANCIAL
INTERMEDIARIES
If
you purchase Shares through a broker-dealer or other financial intermediary, the
Fund and its related companies may pay the intermediary for the sale of Shares
and related services. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your salesperson to
recommend Shares over another investment. Ask your salesperson or visit your
financial intermediary’s website for more information.
STRIVE
1000 DIVIDEND
GROWTH
ETF
Fund
Summary
INVESTMENT
OBJECTIVE
The
Strive 1000 Dividend Growth ETF (the “Fund”) seeks to track the total return
performance, before fees and expenses, of an index composed of U.S.-listed
equities with a history of consistently growing dividends.
FEES
AND
EXPENSES
This
table describes the fees and expenses that you may pay if you buy, hold, and
sell shares of the Fund (“Shares”). You may also pay brokerage commissions on
the purchase and sale of Shares, which are not reflected in the table and
example below.
ANNUAL
FUND
OPERATING
EXPENSES
(EXPENSES THAT YOU PAY EACH YEAR AS A PERCENTAGE OF THE VALUE OF YOUR
INVESTMENT)1
|
|
|
|
|
|
Management
Fee |
0.35 |
% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00 |
% |
Total
Annual Fund Operating Expenses |
0.35 |
% |
1The
Fund’s investment advisory agreement provides that the Fund’s investment adviser
will pay substantially all expenses of the Fund, except for the fee payment
under the Fund’s Investment Advisory Agreement, payments under the Fund’s Rule
12b-1 Distribution and Service Plan, brokerage expenses, acquired fund fees and
expenses, taxes, interest (including borrowing costs), litigation expense and
other non-routine or extraordinary expenses. Additionally, the Fund shall be
responsible for its non-operating expenses, and fees and expenses associated
with the Fund’s securities lending program, if applicable.
EXAMPLE
The
following example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other funds. The example assumes that you
invest $10,000 for the time periods indicated and then redeem all of your Shares
at the end of those periods. The example also assumes that the Fund provides a
return of 5% a year and that operating expenses remain the same. You may also
pay brokerage commissions on the purchase and sale of Shares, which are not
reflected in the example. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
|
|
|
|
|
|
|
|
|
|
|
|
One
Year: |
Three
Years: |
Five
Years: |
Ten
Years: |
$36 |
$113 |
$197 |
$443 |
PORTFOLIO
TURNOVER
The
Fund may pay transaction costs, including commissions when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. For the
fiscal period ended July 31, 2023, the portfolio turnover rate for the Fund was
18% of the average value of its portfolio.
PRINCIPAL
INVESTMENT STRATEGIES
The
Fund’s Investment Strategy
The
Fund seeks to track the investment results of the Bloomberg US 1000 Dividend
Growth Index (the “Index”). The Index is a subset of the Bloomberg US 1000
Growth Index, which measures the performance of large- and mid-capitalization
growth companies in the U.S. equity market as determined by Bloomberg. As of
September 30, 2023, the Index had 232 constituents and represented approximately
51% of the total market value of the Bloomberg US 1000 Growth Index. As of
September 30, 2023, the range of market capitalizations of issuers included in
the Index was $2.77 billion to $2.68 trillion.
A
security is eligible for inclusion in the Index if it has demonstrated five
consecutive years of positive growth and exhibits a five-year dividend growth
ratio that is greater than that of the overall Bloomberg US 1000 Growth Index.
Each security in the Index is free float market capitalization
weighted.
An
Index position is capped at (i) 5% maximum at the issuer level (only the top
eight securities are eligible to be weighted at 5%) and (ii) securities that are
not part of the top eight securities in the Index are capped at a 2.5% maximum
weight. Any excess weight from capping is redistributed proportionally to the
remaining uncapped securities until there are no issuers with a weight greater
than either 5% (for the top eight securities) or 2.5% (for the remaining
securities).
If
there are less than 20 issuers included in the Index, then all the issuers are
equally weighted. For issuers with multiple securities, the issuer weight is
redistributed proportionally based on the free float market capitalization of
each security for a given issuer.
As
of September 30, 2023, a significant portion of the Index is represented by
securities of companies in the Technology, Healthcare, Financials and
Industrials sectors. The components of the Index will change over
time.
The
Index is calculated as a total return index in U.S. dollars. The Index is
normally reconstituted on an annual basis in April. The Index constituents’
weights are normally rebalanced quarterly in January, April, July and
October.
Strive
Asset Management, LLC (the “Sub-Adviser”) uses a “passive” or indexing approach
to try to achieve the Fund’s investment objective. Unlike many investment
companies, the Fund does not try to “beat” the index it tracks and does not seek
temporary defensive positions when markets decline or appear
overvalued.
Indexing
may eliminate the chance that the Fund will substantially outperform the Index
but also may reduce some of the risks of active management, such as poor
security selection. Indexing seeks to achieve lower costs and better after-tax
performance by aiming to keep portfolio turnover low in comparison to actively
managed investment companies.
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in dividend paying
equity securities.
The
Fund will generally use a “replication” strategy to seek to achieve its
investment objective, meaning the Fund will invest in all of the component
securities of the Index in the same approximate proportions as in the Index, but
may, when the Sub-Adviser believes it is in the best interests of the Fund, use
a “representative sampling” strategy, meaning the Fund may invest in a sample of
the securities in the Index whose risk, return and other characteristics closely
resemble the risk, return and other characteristics of the Index as a whole. The
Fund will be reconstituted and rebalanced on the same schedule as the
Index.
The
Fund will concentrate its investments (i.e., hold 25% or more of its total
assets) in a particular industry or group of industries to approximately the
same extent that the Index is concentrated.
PRINCIPAL
RISKS
An
investment in the Fund involves risk, including those described below.
There
is no assurance that the Fund will achieve its investment objective.
An investor may lose money by investing in the Fund. An investment in the Fund
is not a bank deposit and is not insured or guaranteed by the FDIC or any
government agency. More complete risk descriptions are set forth below under the
heading “Additional
Information About the Funds’ Risks”.
Equity
Investing Risk. An
investment in the Fund involves risks similar to those of investing in any fund
holding equity securities, such as market fluctuations, changes in interest
rates and perceived trends in stock prices. The values of equity securities
could decline generally or could underperform other investments. In addition,
securities may decline in value due to factors affecting a specific issuer,
market or securities markets generally.
Dividend-Paying
Common Equity Security Risk. Investing
in dividend-paying stocks involves the risk that such stocks may fall out of
favor with investors and underperform the broader market. Companies that issue
dividend-paying stocks are not required to pay or continue paying dividends on
such stocks. It is possible that issuers of the stocks held by the Fund will not
declare dividends in the future or will reduce or eliminate the payment of
dividends (including reducing or eliminating anticipated accelerations or
increases in the payment of dividends) in the future.
Growth
Investing Risk. The
Fund invests in growth securities, which may be more volatile than other types
of investments, may perform differently than the market as a whole and may
underperform when compared to securities with different investment parameters.
Under certain market conditions, growth securities have performed better during
the
later stages of economic recovery (although there is no guarantee that they will
continue to do so). Therefore, growth securities may go in and out of favor over
time.
Investment
Risk. When
you sell your Shares of the Fund, they could be worth less than what you paid
for them. The Fund could lose money due to short-term market movements and over
longer periods during market downturns. Securities may decline in value due to
factors affecting securities markets generally or particular asset classes or
industries represented in the markets. The value of a security may decline due
to general market conditions, economic trends or events that are not
specifically related to the issuer of the security or to factors that affect a
particular industry or group of industries. During a general downturn in the
securities markets, multiple asset classes may be negatively affected.
Therefore, you may lose money by investing in the Fund.
Large-Capitalization
Companies Risk.
Large-capitalization companies may trail the returns of the overall stock
market. Large-capitalization stocks tend to go through cycles of doing better –
or worse – than the stock market in general. These periods have, in the past,
lasted for as long as several years. When large capitalization companies are out
of favor, these securities may lose value or may not appreciate in line with the
overall market. In addition, large capitalization companies may be unable to
respond quickly to new competitive challenges, such as changes in technology or
consumer tastes, and also may not be able to attain the high growth rate of
successful small companies, especially during extended periods of economic
expansion.
Mid-Capitalization
Companies Risk.
The securities of mid-capitalization companies may be more vulnerable to adverse
issuer, market, political, or economic developments than securities of
larger-capitalization companies. The securities of mid-capitalization companies
generally trade in lower volumes and are subject to greater and more
unpredictable price changes than larger capitalization stocks or the stock
market as a whole. Some mid-capitalization companies have limited product lines,
markets, and financial and managerial resources and tend to concentrate on fewer
geographical markets relative to larger capitalization companies.
Technology
Sector Risk. The
Fund is expected to have exposure to companies operating in the technology
sector,
and therefore, the Fund’s performance could be negatively impacted by events
affecting this sector.
Technology companies, including information technology companies, may have
limited product lines, financial resources and/or personnel. Technology
companies typically face intense competition and potentially rapid product
obsolescence. They are also heavily dependent on intellectual property rights
and may be adversely affected by the loss or impairment of those rights.
Companies in the technology sector also face increased government regulation,
including new regulations and scrutiny related to data privacy, and may be
subject to adverse government or regulatory actions, which may be
costly.
Healthcare
Sector Risk. The
Fund is expected to have exposure to companies in the healthcare sector, and
therefore, the Fund’s performance could be negatively impacted by events
affecting this sector. The
healthcare sector includes companies relating to medical and healthcare goods
and services, such as companies engaged in manufacturing medical equipment,
supplies and pharmaceuticals, as well as operating healthcare facilities and the
provision of managed healthcare. Companies in this sector may be affected by
government regulations, including new regulations and scrutiny related to data
privacy, and government healthcare programs, increases or decreases in the cost
of medical products and services and product liability claims, among other
factors. Many healthcare companies are heavily dependent on patent protection,
and the expiration of a company’s patent may adversely affect that company’s
profitability. Healthcare companies are subject to competitive forces that may
result in price discounting, and may be thinly capitalized and susceptible to
product obsolescence. Companies in the healthcare sector may be subject to
adverse government or regulatory actions, which may be costly.
Industrials
Sector Risk.
The Fund is expected to have exposure to companies in the Industrials sector,
and therefore, the Fund’s performance could be negatively impacted by events
affecting this sector. The industrials sector includes, for example, aerospace
and defense, non-residential construction, engineering, machinery,
transportation, and commercial and professional services companies. This sector
can be significantly affected by, among other things, business cycle
fluctuations, worldwide economy growth, international political and economic
developments, exchange rates, commodity prices, environmental issues, government
and corporate spending, supply and demand for specific products and
manufacturing, and government regulation.
Financials
Sector Risk. The
Fund is expected to have exposure to companies in the financials sector, and
therefore, the Fund’s performance could be negatively impacted by events
affecting this sector. The financials sector includes, for example, banks and
financial institutions providing mortgage and mortgage related services. This
sector can be
significantly
affected by, among other things, changes in interest rates, government
regulation, the rate of defaults on corporate, consumer and government debt, the
availability and cost of capital, and fallout from the housing and sub-prime
mortgage crisis.
Passive
Investment Risk. The
Fund is not actively managed, and the Sub-Adviser will not sell any investments
due to current or projected underperformance of the securities, industries or
sector in which it invests, unless the investment is removed from the Index,
sold in connection with a rebalancing of the Index as addressed in the Index
methodology, or sold to comply with the Fund’s investment limitations (for
example, to maintain the Fund’s tax status). The Fund will maintain investments
until changes to its Index are triggered, which could cause the Fund’s return to
be lower than if the Fund employed an active strategy.
Index
Calculation Risk. The
Index relies on various sources of information to assess the criteria of issuers
included in the Index, including fundamental information that may be based on
assumptions and estimates. Neither the Fund, the Adviser, the Sub-Adviser nor
the Index Provider can offer assurances that the Index’s calculation methodology
or sources of information will provide a correct valuation of securities, nor
can they guarantee the availability or timeliness of the production of the
Index.
Concentration
Risk. In
following its methodology, the Index from time to time may be concentrated to a
significant degree in securities of issuers located in a single industry or
group of industries. To the extent that the Index concentrates in the securities
of issuers in a particular industry or group of industries, the Fund also may
concentrate its investments to approximately the same extent. By concentrating
its investments in an industry or group of industries, the Fund may face more
risks than if it were diversified broadly over numerous industries or groups of
industries. If the Index is not concentrated in a particular industry or group
of industries, the Fund will not concentrate in a particular industry or group
of industries.
Tracking
Error Risk.
As with all index funds, the performance of the Fund and its respective Index
may differ for a variety of reasons. For example, a Fund incurs operating
expenses and portfolio transaction costs not incurred by the Index. In addition,
the Fund may not be fully invested in the securities of the Index at all times
or may hold securities not included in the Index.
ETF
Risks.
•Authorized
Participants, Market Makers and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act as
Authorized Participants (“APs”). In addition, there may be a limited number of
market makers and/or liquidity providers in the marketplace. To the extent
either of the following events occur, Fund Shares may trade at a material
discount to NAV and possibly face delisting: (i) APs exit the business or
otherwise become unable to process creation and/or redemption orders and no
other APs step forward to perform these services, or (ii) market makers and/or
liquidity providers exit the business or significantly reduce their business
activities and no other entities step forward to perform their
functions.
•Premium-Discount
Risk. The
Shares may trade above or below their net asset value (“NAV”). The market prices
of Shares will generally fluctuate in accordance with changes in NAV as well as
the relative supply of, and demand for, Shares on The NASDAQ Stock Market, LLC
(“Exchange”) or other securities exchanges. The trading price of Shares may
deviate significantly from NAV during periods of market volatility or limited
trading activity in Shares. In addition, you may incur the cost of the “spread,”
that is, any difference between the bid price and the ask price of the
Shares.
•Cost
of Trading Risk. Investors
buying or selling Shares in the secondary market will pay brokerage commissions
or other charges imposed by brokers as determined by that broker. Brokerage
commissions are often a fixed amount and may be a significant proportional cost
for investors seeking to buy or sell relatively small amounts of Shares. In
addition, secondary market investors will also incur the cost of the difference
between the price that an investor is willing to pay for Shares (the “bid”
price) and the price at which an investor is willing to sell Shares (the “ask”
price). This difference in bid and ask prices is often referred to as the
“spread” or “bid/ask spread.” The bid/ask spread varies over time for Shares
based on trading volume and market liquidity, and is generally lower if the
Fund’s Shares have more trading volume and market liquidity and higher if the
Fund’s Shares have little trading volume and market liquidity. Further,
increased market volatility may cause increased bid/ask spreads.
•Trading
Risk. Although
the Shares are listed on the Exchange, there can be no assurance that an active
or liquid trading market for them will be maintained. In addition, trading in
Shares on the Exchange may be halted. In stressed market conditions, the
liquidity of the Fund’s Shares may begin to mirror the liquidity of its
underlying portfolio holdings, which can be less liquid than the Fund’s Shares,
potentially causing the market price of the Fund’s Shares to deviate from its
NAV. The spread varies over time for Shares of the Fund based on the Fund’s
trading volume and market liquidity, and is generally lower if the Fund has high
trading volume and market liquidity, and higher if the Fund has little trading
volume and market liquidity (which is often the case for funds that are newly
launched or small in size).
Index
Rebalance Risk.
Because the Index generally changes its exposure based on data only as January,
April, July and October (i) the Index’s exposure may be affected by significant
market movements at or near the rebalance date that are not predictive of the
market’s performance for the subsequent annual period and (ii) changes to the
Index’s exposure may lag a significant change in the market’s direction (up or
down) by as long as a year if such changes first take effect at or near the
beginning of a year. Such lags between market performance and changes to the
Index’s exposure may result in significant underperformance relative to the
broader equity or fixed income market. Unusual market conditions may cause the
Index Provider to postpone a scheduled rebalance, which could cause the Index to
vary from its normal or expected composition.
Limited
Operating History Risk. The
Fund is a recently organized management investment company with a limited
operating history. As a result, prospective investors have a limited track
record or history on which to base their investment decision. There can be no
assurance that the Fund will grow to or maintain an economically viable
size.
Geopolitical/Natural
Disaster Risks. The
Fund’s investments are subject to geopolitical and natural disaster risks, such
as war, terrorism, trade disputes, political or economic dysfunction within some
nations, public health crises and related geopolitical events, as well as
environmental disasters, epidemics and/or pandemics, which may add to
instability in world economies and volatility in markets. The impact may be
short-term or may last for extended periods.
PERFORMANCE
Performance
information is not provided below because the Fund has not yet been in operation
for a full calendar year. When provided, the information will provide some
indication of the risks of investing in the Fund by showing how the Fund’s
average annual returns compare with a broad measure of market performance. Past
performance does not necessarily indicate how the Fund will perform in the
future. Performance information is available on the Fund’s website at
www.strivefunds.com or by calling the Fund at (215) 882-9983.
INVESTMENT
ADVISER
AND
INVESTMENT
SUB-ADVISER
|
|
|
|
|
|
Investment
Adviser: |
Empowered
Funds, LLC dba EA Advisers (“Adviser”) |
Investment
Sub-Adviser: |
Strive
Asset Management, LLC (“Sub-Adviser”) |
PORTFOLIO
MANAGERS
Matthew
Cole, Chief Executive Officer and Chief Investment Officer of Strive and Jeffrey
Sherman a Portfolio Manager of Strive, are each a co-Portfolio Manager of the
Fund and are primarily responsible for the day-to-day management of the Fund.
Mr. Cole has managed the Fund since its inception (November 2022) and Mr.
Sherman has managed the Fund since June 2023.
SUMMARY
INFORMATION
ABOUT PURCHASES,
SALES,
TAXES,
AND FINANCIAL
INTERMEDIARY
COMPENSATION
PURCHASE
AND
SALE
OF FUND
SHARES
The
Fund issues and redeems Shares on a continuous basis only in large blocks of
Shares (e.g., 10,000 Shares) called “Creation Units,” and only APs (typically,
broker-dealers) may purchase or redeem Creation Units. Creation Units generally
are issued and redeemed ‘in-kind’ for securities and partially in cash.
Individual Shares may only be purchased and sold in secondary market
transactions through brokers. Once created, individual Shares generally trade in
the secondary market at market prices that change throughout the day. Market
prices of Shares may be greater or less than their NAV. In addition, if you
purchase Shares through an employee benefit plan, the Sub-Adviser may make
payments to the recordkeeper, broker/dealer, bank, or other financial
institution or organization (each a “Financial Intermediary”) that provides
shareholder recordkeeping or other administrative services to the plan as
compensation for those services. These payments may create a conflict of
interest by influencing your Financial Intermediary to make available the Fund
over other investments. Except
when aggregated in Creation Units, the Fund’s shares are not redeemable
securities.
TAX
INFORMATION
The
Fund’s distributions generally are taxable to you as ordinary income, capital
gain, or some combination of both, unless your investment is in an Individual
Retirement Account (“IRA”) or other tax-advantaged account. However, subsequent
withdrawals from such a tax-advantaged account may be subject to federal income
tax. You should consult your tax advisor about your specific tax
situation.
PURCHASES
THROUGH
BROKER-DEALERS
AND
OTHER
FINANCIAL
INTERMEDIARIES
If
you purchase Shares through a broker-dealer or other financial intermediary, the
Fund and its related companies may pay the intermediary for the sale of Shares
and related services. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your salesperson to
recommend Shares over another investment. Ask your salesperson or visit your
financial intermediary’s website for more information.
STRIVE
EMERGING
MARKETS
EX-CHINA
ETF
Fund
Summary
INVESTMENT
OBJECTIVE
Strive
Emerging Markets Ex-China ETF (the “Fund”) seeks to track the total return
performance, before fees and expenses, of an index composed of emerging market,
ex-China securities.
FEES
AND
EXPENSES
This
table describes the fees and expenses that you may pay if you buy, hold, and
sell shares of the Fund (“Shares”). You may also pay brokerage commissions on
the purchase and sale of Shares, which are not reflected in the table or example
below.
ANNUAL
FUND
OPERATING
EXPENSES
(EXPENSES
THAT YOU PAY EACH YEAR AS A PERCENTAGE OF THE VALUE OF YOUR
INVESTMENT)1
|
|
|
|
|
|
Management
Fee |
0.32 |
% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses2 |
0.00 |
% |
Total
Annual Fund Operating Expenses |
0.32 |
% |
1The
Fund’s investment advisory agreement provides that the Fund’s investment adviser
will pay substantially all expenses of the Fund, except for the fee payment
under the Fund’s Investment Advisory Agreement, payments under the Fund’s Rule
12b-1 Distribution and Service Plan, brokerage expenses, acquired fund fees and
expenses, taxes, interest (including borrowing costs), litigation expense and
other non-routine or extraordinary expenses. Additionally, the Fund shall be
responsible for its non-operating expenses, and fees and expenses associated
with the Fund’s securities lending program, if applicable.
2Other
Expenses have been restated to reflect current fees.
EXAMPLE
The
following example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other funds. The example assumes that you
invest $10,000 for the time periods indicated and then redeem all of your Shares
at the end of those periods. The example also assumes that the Fund provides a
return of 5% a year and that operating expenses remain the same. You may also
pay brokerage commissions on the purchase and sale of Shares, which are not
reflected in the example. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
|
|
|
|
|
|
|
|
|
|
|
|
One
Year: |
Three
Years: |
Five
Years: |
Ten
Years: |
$33 |
$103 |
$180 |
$406 |
PORTFOLIO
TURNOVER
The
Fund may pay transaction costs, including commissions when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. For the
fiscal period ended July 31, 2023, the portfolio turnover rate for the Fund was
39% of the average value of its portfolio.
PRINCIPAL
INVESTMENT STRATEGIES
The
Fund’s Investment Strategy
The
Fund seeks to track the investment results of the Bloomberg Emerging Markets ex
China Large & Mid Cap Index (the “Index”), which tracks large and
mid-capitalization equity securities across 24 emerging market economies,
excluding China. Components of the Index (each an “Index Component” and
collectively the “Index Components”) are selected and weighted according to
free-float market capitalization.
As
of September 30, 2023, the Index consisted of 691 securities with a market
capitalization range of between approximately $398.85 million and $2.26
trillion, and an average market capitalization of approximately $17.4 billion.
The Index contained issuers in the following emerging market countries on that
date: Brazil, Chile, Colombia, Czech Republic, Egypt, Greece, Hungary, India,
Indonesia, Kuwait, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar,
Saudi Arabia, South Africa, South Korea, Taiwan, Thailand, Turkey, and United
Arab Emirates (each an “Emerging Market” and collectively, the “Emerging
Markets”). As of September 30, 2023, the Index had significant exposure to the
following countries: India 23.6%, Taiwan 18.3%, South Korea 14% and Saudi Arabia
10.5%. Also of September 30, 2023, the Index had significant exposure to the
Financials sector in the amount of 26.2%. The components of the Index and the
Emerging Markets themselves will change over time.
Securities
are first screened for inclusion in the “Index Universe.” The Index Universe is
exclusively comprised of equity securities, which includes common stock and real
estate investment trusts (REITs) from issuers in Emerging Markets.
To
determine the Index Components, all equity securities in the Index Universe are
sorted by Emerging Market country. Thereafter, Index Components are individually
selected for inclusion based on such factors as free float market
capitalization, trading volume thresholds, and market price cap levels. Equity
securities passing these thresholds are included as Index Components within each
Emerging Market.
Thereafter,
the Index Components are aggregated together and ranked by total market
capitalization. Each Index Component is subsequently assigned a weight based on
its free float market capitalization. The weight represents the percentage
amount of the Index Component as a percentage of the total Index. Starting with
the largest free float market capitalization, the Index is fully comprised once
approximately 85% of the accumulated free float market-capitalization of the
Index Universe is selected.
The
Fund’s exposure to any asset class, country or geographic region will vary from
time to time as the weightings of the securities within the Index change, and
the Fund may not be invested in each country or geographic region at all times.
Bloomberg Index Services Limited (the “Index Provider”) will generally deem an
issuer to be located in an emerging market country based on several factors
related to economic development, market size and liquidity, and capital market
structure. The Index is calculated as a net total return index in U.S.
dollars.
The
Index is normally reconstituted on a semi-annual basis in March and September
and rebalanced on a quarterly basis. New securities from initial public
offerings generally must have traded for at least three months before the
semi-annual reconstitution date to be considered for inclusion in the Index.
Securities subject to United States, United Nations, United Kingdom or European
Union sanctions may not be eligible for inclusion in the Index. Index Components
impacted by such sanctions will be dropped from the Index as soon as practically
possible.
Strive
Asset Management, LLC (the “Sub-Adviser”) uses a “passive” or indexing approach
to try to achieve the Fund’s investment objective. Unlike many investment
companies, the Fund does not try to “beat” the index it tracks and does not seek
temporary defensive positions when markets decline or appear
overvalued.
Indexing
may eliminate the chance that the Fund will substantially outperform the Index
but also may reduce some of the risks of active management, such as poor
security selection. Indexing seeks to achieve lower costs and better after-tax
performance by aiming to keep portfolio turnover low in comparison to actively
managed investment companies.
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in the emerging market
securities, which may include depositary receipts (including American Depository
Receipts (“ADRs”) or Global Depository Receipts (“GDRs”) representing securities
included in the Index.
The
Fund will use a “representative sampling” strategy to seek to achieve its
investment objective, meaning the Fund will invest in a sample of the securities
in the Index whose risk, return and other characteristics closely resemble the
risk, return and other characteristics of the Index as a whole. The Fund may or
may not hold all of the securities in the Index. The Fund will be reconstituted
and rebalanced on the same schedule as the Index.
The
Fund will concentrate its investments (i.e., hold 25% or more of its total
assets) in a particular industry or group of industries to approximately the
same extent that the Index is concentrated.
PRINCIPAL
RISKS
An
investment in the Fund involves risk, including those described below.
There
is no assurance that the Fund will achieve its investment objective.
An investor may lose money by investing in the Fund. An investment in the Fund
is not a bank deposit and is not insured or guaranteed by the FDIC or any
government agency. More complete risk descriptions are set forth below under the
heading “Additional
Information About the Fund’s Risks”.
Emerging
Markets Risk. Investments
in securities and instruments traded in developing or emerging markets, or that
provide exposure to those securities or markets, can involve additional risks
relating to political, economic, or regulatory conditions not associated with
investments in U.S. securities and instruments. For example, developing and
emerging markets may be subject to (i) greater market volatility, (ii) lower
trading volume and liquidity, (iii) greater social, political and economic
uncertainty, (iv) governmental controls on foreign investments and limitations
on repatriation of invested capital, (v) lower disclosure, corporate governance,
auditing and financial reporting standards, (vi) fewer protections of property
rights, (vii) restrictions on the transfer of securities or currency, and (viii)
settlement and trading practices that differ from those in U.S. markets. Each of
these factors may impact the ability of the Fund to buy, sell or otherwise
transfer securities, adversely affect the trading market and price for Shares
and cause the Fund to decline in value.
Foreign
Investment Risk. Returns
on investments in foreign securities could be more volatile than, or trail the
returns on, investments in U.S. securities. Investments in or exposures to
foreign securities are subject to special risks, including risks associated with
foreign securities generally. Those special risks may arise due to differences
in information available about issuers of securities and investor protection
standards applicable in other jurisdictions; capital controls risks, including
the risk of a foreign jurisdiction imposing restrictions on the ability to
repatriate or transfer currency or other assets; currency risks; political,
diplomatic and economic risks; regulatory risks; and foreign market and trading
risks, including the costs of trading and risks of settlement in foreign
jurisdictions.
Depositary
Receipt Risk. The
risks of investments in depositary receipts, including American Depositary
Receipts (“ADRs”), European Depositary Receipts (“EDRs”), and Global Depositary
Receipts (“GDRs”), are substantially similar to Foreign Investment Risk. In
addition, depositary receipts may not track the price of the underlying foreign
securities, and their value may change materially at times when the U.S. markets
are not open for trading. In addition, the underlying issuers of certain
depositary receipts, particularly unsponsored or unregistered depositary
receipts, are under no obligation to distribute shareholder communications to
the holders of such receipts, or to pass through any voting rights with respect
to the deposited securities. Therefore, the Sub-Adviser will not be able to vote
on any matters with respect to these instruments.
Investment
Risk. When
you sell your Shares of the Fund, they could be worth less than what you paid
for them. The Fund could lose money due to short-term market movements and over
longer periods during market downturns. Securities may decline in value due to
factors affecting securities markets generally or particular asset classes or
industries represented in the markets. The value of a security may decline due
to general market conditions, economic trends or events that are not
specifically related to the issuer of the security or to factors that affect a
particular industry or group of industries. During a general downturn in the
securities markets, multiple asset classes may be negatively affected.
Therefore, you may lose money by investing in the Fund.
Equity
Investing Risk. An
investment in the Fund involves risks similar to those of investing in any fund
holding equity securities, such as market fluctuations, changes in interest
rates and perceived trends in stock prices. The values of equity securities
could decline generally or could underperform other investments. In addition,
securities may decline in value due to factors affecting a specific issuer,
market or securities markets generally.
Large-Capitalization
Companies Risk.
Large-capitalization companies may trail the returns of the overall stock
market. Large-capitalization stocks tend to go through cycles of doing better –
or worse – than the stock market in general. These periods have, in the past,
lasted for as long as several years. When large capitalization companies are out
of favor, these securities may lose value or may not appreciate in line with the
overall market. In addition, large capitalization companies may be unable to
respond quickly to new competitive challenges, such as changes in technology or
consumer tastes, and also may not be able to attain the high growth rate of
successful small companies, especially during extended periods of economic
expansion.
Mid-Capitalization
Companies Risk.
The securities of mid-capitalization companies may be more vulnerable to adverse
issuer, market, political, or economic developments than securities of
larger-capitalization companies. The
securities
of mid-capitalization companies generally trade in lower volumes and are subject
to greater and more unpredictable price changes than larger capitalization
stocks or the stock market as a whole. Some mid-capitalization companies have
limited product lines, markets, and financial and managerial resources and tend
to concentrate on fewer geographical markets relative to larger capitalization
companies.
Financials
Sector Risk. The
Fund is expected to have exposure to companies in the financials sector, and
therefore, the Fund’s performance could be negatively impacted by events
affecting this sector. The financials sector includes, for example, banks and
financial institutions providing mortgage and mortgage related services. This
sector can be significantly affected by, among other things, changes in interest
rates, government regulation, the rate of defaults on corporate, consumer and
government debt, the availability and cost of capital, and fallout from the
housing and sub-prime mortgage crisis.
Real
Estate Investment Trusts (REITs) Risk. A
REIT is a company that owns or finances income-producing real estate. Through
its investments in REITs, the Fund is subject to the risks of investing in the
real estate market, including decreases in property revenues, increases in
interest rates, increases in property taxes and operating expenses, legal and
regulatory changes, a lack of credit or capital, defaults by borrowers or
tenants, environmental problems and natural disasters. Investments in REITs may
be volatile. REITs are pooled investment vehicles with their own fees and
expenses and the Fund will indirectly bear a proportionate share of those fees
and expenses.
Concentration
Risk.
In following its methodology, the Index from time to time may be concentrated to
a significant degree in securities of issuers located in a single industry or
group of industries. To the extent that the Index concentrates in the securities
of issuers in a particular industry or group of industries, the Fund also may
concentrate its investments to approximately the same extent. By concentrating
its investments in an industry or group of industries, the Fund may face more
risks than if it were diversified broadly over numerous industries or groups of
industries. If the Index is not concentrated in a particular industry or group
of industries, the Fund will not concentrate in a particular industry or group
of industries.
Passive
Investment Risk. The
Fund is not actively managed and the Sub-Adviser will not sell any investments
due to current or projected underperformance of the securities, industries or
sector in which it invests, unless the investment is removed from the Index,
sold in connection with a rebalancing of the Index as addressed in the Index
methodology, or sold to comply with the Fund’s investment limitations (for
example, to maintain the Fund’s tax status). The Fund will maintain investments
until changes to its Index are triggered, which could cause the Fund’s return to
be lower than if the Fund employed an active strategy.
Index
Calculation Risk. The
Index relies on various sources of information to assess the criteria of issuers
included in the Index, including fundamental information that may be based on
assumptions and estimates. Neither the Fund, the Sub-Adviser nor the Index
Provider can offer assurances that the Index’s calculation methodology or
sources of information will provide a correct valuation of securities, nor can
they guarantee the availability or timeliness of the production of the
Index.
Tracking
Error Risk.
As with all index funds, the performance of the Fund and its respective Index
may differ from each other for a variety of reasons. For example, the Fund
incurs operating expenses and portfolio transaction costs not incurred by the
Index. In addition, the Fund may not be fully invested in the securities of the
Index at all times or may hold securities not included in the Index. In
addition, the Fund’s use of a representative sampling approach may
cause the Fund’s returns to not be as well correlated with the return of the
Index as would be the case if the Fund purchased all of the securities in the
Index in the proportions in which they are represented in the
Index.
Sampling Risk.
The Fund’s use of a representative sampling approach will result in it
holding a smaller number of securities than are in the Index. As a result, an
adverse development respecting a security held by the Fund could result in a
greater decline in NAV than would be the case if the Fund held all of the
securities in the Index. Conversely, a positive development relating to a
security in the Index that is not held by the Fund could cause the Fund to
underperform the Index. To the extent the assets in the Fund are smaller, these
risks will be greater.
ETF
Risks.
•Authorized
Participants, Market Makers and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act as
Authorized Participants (“APs”). In addition, there may be a limited number of
market makers and/or liquidity providers in the marketplace. To the extent
either of the
following
events occur, Fund Shares may trade at a material discount to NAV and possibly
face delisting: (i) APs exit the business or otherwise become unable to process
creation and/or redemption orders and no other APs step forward to perform these
services, or (ii) market makers and/or liquidity providers exit the business or
significantly reduce their business activities and no other entities step
forward to perform their functions.
•Premium-Discount
Risk. The
Shares may trade above or below their net asset value (“NAV”). The market prices
of Shares will generally fluctuate in accordance with changes in NAV as well as
the relative supply of, and demand for, Shares on NYSE Arca, Inc. (the
“Exchange”) or other securities exchanges. The trading price of Shares may
deviate significantly from NAV during periods of market volatility or limited
trading activity in Shares. In addition, you may incur the cost of the “spread,”
that is, any difference between the bid price and the ask price of the
Shares.
•Cost
of Trading Risk. Investors
buying or selling Shares in the secondary market will pay brokerage commissions
or other charges imposed by brokers as determined by that broker. Brokerage
commissions are often a fixed amount and may be a significant proportional cost
for investors seeking to buy or sell relatively small amounts of Shares. In
addition, secondary market investors will also incur the cost of the difference
between the price that an investor is willing to pay for Shares (the “bid”
price) and the price at which an investor is willing to sell Shares (the “ask”
price). This difference in bid and ask prices is often referred to as the
“spread” or “bid/ask spread.” The bid/ask spread varies over time for Shares
based on trading volume and market liquidity, and is generally lower if the
Fund’s Shares have more trading volume and market liquidity and higher if the
Fund’s Shares have little trading volume and market liquidity. Further,
increased market volatility may cause increased bid/ask spreads.
•Trading
Risk. Although
the Shares are listed on the Exchange, there can be no assurance that an active
or liquid trading market for them will develop or be maintained. In addition,
trading in Shares on the Exchange may be halted. In stressed market conditions,
the liquidity of the Fund’s Shares may begin to mirror the liquidity of its
underlying portfolio holdings, which can be less liquid than the Fund’s Shares,
potentially causing the market price of the Fund’s Shares to deviate from its
NAV. The spread varies over time for Shares of the Fund based on the Fund’s
trading volume and market liquidity, and is generally lower if the Fund has high
trading volume and market liquidity, and higher if the Fund has little trading
volume and market liquidity (which is often the case for funds that are newly
launched or small in size).
Index
Rebalance Risk. Pursuant
to the methodology that the Index Provider uses to maintain the Index,
securities will only be added or removed from the Index during regular Index
updates. The Index is reconstituted semi-annually and rebalanced quarterly.
Changes to the Index’s exposure may lag a significant change in the market’s
direction (up or down) by as long as six months if such changes first take
effect following the most recent reconstitution. Such lags between market
performance and changes to the Index’s exposure may result in significant
underperformance relative to the broader market. Index updates may cause the
Fund to purchase or sell securities at inopportune times or for prices other
than at current market values. Due to these factors, the variation between the
Fund’s annual return and the return of the Index may increase
significantly.
Limited
Operating History Risk. The
Fund is a recently organized management investment company with a limited
operating history. As a result, prospective investors have a limited track
record or history on which to base their investment decision. There can be no
assurance that the Fund will grow to or maintain an economically viable
size.
Geopolitical/Natural
Disaster Risks. The
Fund’s investments are subject to geopolitical and natural disaster risks, such
as war, terrorism, trade disputes, political or economic dysfunction within some
nations, public health crises and related geopolitical events, as well as
environmental disasters, epidemics and/or pandemics, which may add to
instability in world economies and volatility in markets. The impact may be
short-term or may last for extended periods.
PERFORMANCE
Performance
information is not provided below because the Fund has not yet been in operation
for a full calendar year. When provided, the information will provide some
indication of the risks of investing in the Fund by showing how the Fund’s
average annual returns compare with a broad measure of market performance. Past
performance does not necessarily indicate how the Fund will perform in the
future. Performance information is available on the Fund’s website at
www.strivefunds.com or by calling the Fund at (215) 882-9983.
INVESTMENT
ADVISER
& INVESTMENT
SUB-ADVISER
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Investment
Adviser: |
Empowered
Funds, LLC dba EA Advisers (“Adviser”) |
Investment
Sub-Adviser: |
Strive
Asset Management, LLC (“Sub-Adviser”) |
PORTFOLIO
MANAGERS
Matthew
Cole, Chief Executive Officer and Chief Investment Officer of Strive and Jeffrey
Sherman a Portfolio Manager of Strive, are each a co-Portfolio Manager of the
Fund and are primarily responsible for the day-to-day management of the Fund.
Mr. Cole has managed the Fund since its inception (January 2023) and Mr. Sherman
has managed the Fund since June 2023.
SUMMARY
INFORMATION
ABOUT
PURCHASES,
SALES,
TAXES,
AND
FINANCIAL
INTERMEDIARY
COMPENSATION
PURCHASE
AND
SALE
OF
FUND
SHARES
The
Fund issues and redeems Shares on a continuous basis only in large blocks of
Shares (e.g., 100,000 Shares) called “Creation Units,” and only APs (typically,
broker-dealers) may purchase or redeem Creation Units. Creation Units generally
are issued and redeemed ‘in-kind’ for securities and partially in cash.
Individual Shares may only be purchased and sold in secondary market
transactions through brokers. Once created, individual Shares generally trade in
the secondary market at market prices that change throughout the day. Market
prices of Shares may be greater or less than their NAV. In addition, if you
purchase Shares through an employee benefit plan, the Sub-Adviser may make
payments to the recordkeeper, broker/dealer, bank, or other financial
institution or organization (each a “Financial Intermediary”) that provides
shareholder recordkeeping or other administrative services to the plan as
compensation for those services. These payments may create a conflict of
interest by influencing your Financial Intermediary to make available the Fund
over other investments. Except
when aggregated in Creation Units, the Fund’s shares are not redeemable
securities.
TAX
INFORMATION
The
Fund’s distributions generally are taxable to you as ordinary income, capital
gain, or some combination of both, unless your investment is in an Individual
Retirement Account (“IRA”) or other tax-advantaged account. However, subsequent
withdrawals from such a tax-advantaged account may be subject to federal income
tax. You should consult your tax advisor about your specific tax
situation.
PURCHASES
THROUGH
BROKER-DEALERS
AND
OTHER
FINANCIAL
INTERMEDIARIES
If
you purchase Shares through a broker-dealer or other financial intermediary, the
Fund and its related companies may pay the intermediary for the sale of Shares
and related services. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your salesperson to
recommend Shares over another investment. Ask your salesperson or visit your
financial intermediary’s website for more information.
STRIVE
U.S. ENERGY
ETF
Fund
Summary
INVESTMENT
OBJECTIVE
Strive
U.S. Energy ETF (the “Fund”) seeks to track the total return performance, before
fees and expenses, of an index composed of U.S.-listed equities in the energy
sector (the “Index”).
FEES
AND
EXPENSES
This
table describes the fees and expenses that you may pay if you buy, hold, and
sell shares of the Fund (“Shares”). You may also pay brokerage commissions on
the purchase and sale of Shares, which are not reflected in the table and
example below.
ANNUAL
FUND
OPERATING
EXPENSES
(EXPENSES THAT YOU PAY EACH YEAR AS A PERCENTAGE OF THE VALUE OF YOUR
INVESTMENT)1
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Management
Fee |
0.41 |
% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00 |
% |
Total
Annual Fund Operating Expenses |
0.41 |
% |
3The
Fund’s investment advisory agreement provides that the Fund’s investment adviser
will pay substantially all expenses of the Fund, except for the fee payment
under the Fund’s Investment Advisory Agreement, payments under the Fund’s Rule
12b-1 Distribution and Service Plan, brokerage expenses, acquired fund fees and
expenses, taxes, interest (including borrowing costs), litigation expense and
other non-routine or extraordinary expenses. Additionally, the Fund shall be
responsible for its non-operating expenses, and fees and expenses associated
with the Fund’s securities lending program, if applicable.
EXAMPLE
The
following example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other funds. The example assumes that you
invest $10,000 for the time periods indicated and then redeem all of your Shares
at the end of those periods. The example also assumes that the Fund provides a
return of 5% a year and that operating expenses remain the same. You may also
pay brokerage commissions on the purchase and sale of Shares, which are not
reflected in the example. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
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One
Year: |
Three
Years: |
Five
Years: |
Ten
Years: |
$42 |
$132 |
$230 |
$518 |
PORTFOLIO
TURNOVER
The
Fund may pay transaction costs, including commissions when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. For the
fiscal period ended July 31, 2023, the portfolio turnover rate for the Fund was
6% of the average value of its portfolio.
PRINCIPAL
INVESTMENT STRATEGIES
The
Fund’s Investment Strategy
The
Fund seeks to track the investment results of the Solactive United States Energy
Regulated Capped Index (the “Index”), which measures the performance of the
energy sector of the U.S. equity market as defined by Solactive AG (the “Index
Provider” or “Solactive”). The Index includes large, and mid-capitalization
companies.
The
Index is a subset of a float-adjusted capitalization weighted index of equity
securities comprising the 1,000 largest companies from the US stock
market.
The
Index uses a capping methodology to constrain individual securities at quarterly
rebalance to ensure: (i) the weights of any single issuer shall not exceed
22.5%, and (ii) the aggregate weight of all issuers that individually exceed
4.5% of the Index shall not have a weight greater than 45% of the
Index.
The
weight of one or more securities in the Index may exceed these limits due to
fluctuations in market value of the securities in the Index, corporate actions,
or other events that change the Index composition between quarterly rebalance
dates.
Substantially
all of the Index is expected to be represented by securities of companies in the
energy industry or sector (typically oil, coal, and natural gas companies, but
may also include companies that produce renewable or alternative energy such as
hydrogen, nuclear, solar, and wind power). As of September 30, 2023,
approximately 94% of the Index was comprised of fossil fuel companies and
approximately 6% of the Index was comprised of renewable energy companies. The
Index Provider currently identifies energy companies utilizing the industry
classification analysis of the North America Industry Classification System,
which is a third party that is not affiliated with the Fund, the Adviser, the
Sub-Adviser (as defined below) or the Index Provider. The components of the
Index are likely to change over time.
The
Index is calculated as a total return index in U.S. dollars. The Index is
normally reconstituted on a quarterly basis in February, May, August, and
November.
Strive
Asset Management, LLC (the “Sub-Adviser”) uses a “passive” or indexing approach
to try to achieve the Fund’s investment objective. Unlike many investment
companies, the Fund does not try to “beat” the index it tracks and does not seek
temporary defensive positions when markets decline or appear
overvalued.
Indexing
may eliminate the chance that the Fund will substantially outperform the Index
but also may reduce some of the risks of active management, such as poor
security selection. Indexing seeks to achieve lower costs and better after-tax
performance by aiming to keep portfolio turnover low in comparison to actively
managed investment companies.
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in U.S. energy
companies. The Sub-Adviser expects that, over time, the correlation between the
Fund’s performance and that of the Index, before fees and expenses, will be 95%
or better.
The
Fund will generally use a “replication” strategy to seek to achieve its
investment objective, meaning the Fund will invest in all of the component
securities of the Index in the same approximate proportions as in the Index, but
may, when the Sub-Adviser believes it is in the best interests of the Fund, use
a “representative sampling” strategy, meaning the Fund may invest in a sample of
the securities in the Index whose risk, return and other characteristics closely
resemble the risk, return and other characteristics of the Index as a
whole.
The
Fund will be considered to be non-diversified, which means that it may invest
more of its assets in the securities of a single issuer or a smaller number of
issuers than if it were a diversified fund.
The
Fund will concentrate its investments (i.e., hold 25% or more of its total
assets) in the energy industry to approximately the same extent that the Index
is so concentrated.
PRINCIPAL
RISKS
An
investment in the Fund involves risk, including those described below.
There
is no assurance that the Fund will achieve its investment objective.
An investor may lose money by investing in the Fund. An investment in the Fund
is not a bank deposit and is not insured or guaranteed by the FDIC or any
government agency. More complete risk descriptions are set forth below under the
heading “Additional
Information About the Fund’s Risks”.
Energy
Sector Risk. The
market value of securities in the energy sector may decline for many reasons
including, fluctuations in energy prices and supply and demand of energy fuels
caused by geopolitical events, the success of exploration projects, weather or
meteorological events, taxes, increased governmental or environmental
regulation, resource depletion, rising interest rates, declines in domestic or
foreign production, accidents or catastrophic events that result in injury, loss
of life or property, pollution or other environmental damage claims, terrorist
threats or attacks, among other factors. Markets for various energy-related
commodities can have significant volatility and are subject to control or
manipulation by large producers or purchasers. Companies in the energy sector
may need to make substantial expenditures, and may incur significant amounts of
debt, to maintain or expand their reserves through exploration of new sources of
supply, through the development of existing sources, through acquisitions, or
through long-term contracts to acquire reserves. Factors adversely affecting
producers, refiners, distributors, or others in the energy sector may
adversely
affect companies that service or supply those entities, either because demand
for those services or products is curtailed, or those services or products come
under price pressure. Issuers in the energy sector may also be impacted by
changing investor and consumer preferences arising from the sector’s potential
exposure to sustainability and environmental concerns.
Oil
and Gas Sector Risk. The
profitability of companies in the oil and gas sector is related to worldwide
energy prices, exploration costs, and production spending. Companies in the oil
and gas sector may be at risk for environmental damage claims and other types of
litigation, as well as negative publicity and perception. Companies in the oil
and gas sector may be adversely affected by natural disasters or other
catastrophes, changes in exchange rates, interest rates, changes in prices for
competitive energy services, economic conditions, tax treatment, government
regulation and intervention, and unfavorable events in the regions where
companies operate (e.g., expropriation, nationalization, confiscation of assets
and property or imposition of restrictions on foreign investments and
repatriation of capital, military coups, social unrest, violence or labor
unrest). As a result, the value of these companies may fluctuate widely.
Companies in the oil and gas sector may have significant capital investments in,
or engage in transactions involving, emerging market countries, which may
heighten these risks. Any of these factors could result in a material adverse
impact on the Fund’s securities and the performance of the Fund.
Investment
Risk. When
you sell your Shares of the Fund, they could be worth less than what you paid
for them. The Fund could lose money due to short-term market movements and over
longer periods during market downturns. Securities may decline in value due to
factors affecting securities markets generally or particular asset classes or
industries represented in the markets. The value of a security may decline due
to general market conditions, economic trends or events that are not
specifically related to the issuer of the security or to factors that affect a
particular industry or group of industries. During a general downturn in the
securities markets, multiple asset classes may be negatively affected.
Therefore, you may lose money by investing in the Fund.
Equity
Investing Risk. An
investment in the Fund involves risks similar to those of investing in any fund
holding equity securities, such as market fluctuations, changes in interest
rates and perceived trends in stock prices. The values of equity securities
could decline generally or could underperform other investments. In addition,
securities may decline in value due to factors affecting a specific issuer,
market or securities markets generally.
Large-Capitalization
Companies Risk.
Large-capitalization companies may trail the returns of the overall stock
market. Large-capitalization stocks tend to go through cycles of doing better –
or worse – than the stock market in general. These periods have, in the past,
lasted for as long as several years. When large capitalization companies are out
of favor, these securities may lose value or may not appreciate in line with the
overall market. In addition, large capitalization companies may be unable to
respond quickly to new competitive challenges, such as changes in technology or
consumer tastes, and also may not be able to attain the high growth rate of
successful small companies, especially during extended periods of economic
expansion.
Mid-Capitalization
Companies Risk.
The securities of mid-capitalization companies may be more vulnerable to adverse
issuer, market, political, or economic developments than securities of
larger-capitalization companies. The securities of mid-capitalization companies
generally trade in lower volumes and are subject to greater and more
unpredictable price changes than larger capitalization stocks or the stock
market as a whole. Some mid-capitalization companies have limited product lines,
markets, and financial and managerial resources and tend to concentrate on fewer
geographical markets relative to larger capitalization companies.
Concentration
Risk.
In following its methodology, the Index will be concentrated to a significant
degree in securities of issuers located in the energy sector. To the extent that
the Index concentrates in the securities of issuers in a particular industry or
group of industries, the Fund also may concentrate its investments to
approximately the same extent. By concentrating its investments in the energy
industry, the Fund may face more risks than if it were diversified broadly over
numerous industries or groups of industries.
Non-Diversification
Risk. Because
the Fund is non-diversified, it may be more sensitive to economic, business,
political or other changes affecting individual issuers or investments than a
diversified fund, which may result in greater fluctuation in the value of the
Fund’s Shares and greater risk of loss.
Passive
Investment Risk. The
Fund is not actively managed, and the Sub-Adviser will not sell any investments
due to current or projected underperformance of the securities, industries or
sector in which it invests, unless the investment is removed from the Index,
sold in connection with a rebalancing of the Index as addressed in the Index
methodology, or
sold
to comply with the Fund’s investment limitations (for example, to maintain the
Fund’s tax status). The Fund will maintain investments until changes to its
Index are triggered, which could cause the Fund’s return to be lower than if the
Fund employed an active strategy.
Index
Calculation Risk. The
Index relies on various sources of information to assess the criteria of issuers
included in the Index, including fundamental information that may be based on
assumptions and estimates. Neither the Fund, the Adviser, the Sub-Adviser nor
the Index Provider can offer assurances that the Index’s calculation methodology
or sources of information will provide a correct valuation of securities, nor
can they guarantee the availability or timeliness of the production of the
Index.
Tracking
Error Risk.
As with all index funds, the performance of the Fund and its respective Index
may differ for a variety of reasons. For example, a Fund incurs operating
expenses and portfolio transaction costs not incurred by the Index. In addition,
the Fund may not be fully invested in the securities of the Index at all times
or may hold securities not included in the Index.
ETF
Risks.
•Authorized
Participants, Market Makers and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act as
Authorized Participants (“APs”). In addition, there may be a limited number of
market makers and/or liquidity providers in the marketplace. To the extent
either of the following events occur, Fund Shares may trade at a material
discount to NAV and possibly face delisting: (i) APs exit the business or
otherwise become unable to process creation and/or redemption orders and no
other APs step forward to perform these services, or (ii) market makers and/or
liquidity providers exit the business or significantly reduce their business
activities and no other entities step forward to perform their
functions.
•Premium-Discount
Risk. The
Shares may trade above or below their net asset value (“NAV”). The market prices
of Shares will generally fluctuate in accordance with changes in NAV as well as
the relative supply of, and demand for, Shares on NYSE Arca, Inc. (“Exchange”)
or other securities exchanges. The trading price of Shares may deviate
significantly from NAV during periods of market volatility or limited trading
activity in Shares. In addition, you may incur the cost of the “spread,” that
is, any difference between the bid price and the ask price of the
Shares.
•Cost
of Trading Risk. Investors
buying or selling Shares in the secondary market will pay brokerage commissions
or other charges imposed by brokers as determined by that broker. Brokerage
commissions are often a fixed amount and may be a significant proportional cost
for investors seeking to buy or sell relatively small amounts of Shares. In
addition, secondary market investors will also incur the cost of the difference
between the price that an investor is willing to pay for Shares (the “bid”
price) and the price at which an investor is willing to sell Shares (the “ask”
price). This difference in bid and ask prices is often referred to as the
“spread” or “bid/ask spread.” The bid/ask spread varies over time for Shares
based on trading volume and market liquidity, and is generally lower if the
Fund’s Shares have more trading volume and market liquidity and higher if the
Fund’s Shares have little trading volume and market liquidity. Further,
increased market volatility may cause increased bid/ask spreads.
•Trading
Risk. Although
the Shares are listed on the Exchange, there can be no assurance that an active
or liquid trading market for them will be maintained. In addition, trading in
Shares on the Exchange may be halted. In stressed market conditions, the
liquidity of the Fund’s Shares may begin to mirror the liquidity of its
underlying portfolio holdings, which can be less liquid than the Fund’s Shares,
potentially causing the market price of the Fund’s Shares to deviate from its
NAV. The spread varies over time for Shares of the Fund based on the Fund’s
trading volume and market liquidity, and is generally lower if the Fund has high
trading volume and market liquidity, and higher if the Fund has little trading
volume and market liquidity (which is often the case for funds that are newly
launched or small in size).
Index
Rebalance Risk.
Because the Index generally changes its exposure based on data only as of the
last business day of each quarter, (i) the Index’s exposure may be affected by
significant market movements at or near quarter end that are not predictive of
the market’s performance for the subsequent quarter and (ii) changes to the
Index’s exposure may lag a significant change in the market’s direction (up or
down) by as long as a quarter if such changes first take effect at or near the
beginning of a quarter. Such lags between market performance and changes to the
Index’s exposure may result in significant underperformance relative to the
broader equity or fixed income market.
Limited
Operating History Risk. The
Fund is a recently organized management investment company with a limited
operating history. As a result, prospective investors have a limited track
record or history on which to base their investment decision. There can be no
assurance that the Fund will grow to or maintain an economically viable
size.
Geopolitical/Natural
Disaster Risks. The
Fund’s investments are subject to geopolitical and natural disaster risks, such
as war, terrorism, trade disputes, political or economic dysfunction within some
nations, public health crises and related geopolitical events, as well as
environmental disasters, epidemics and/or pandemics, which may add to
instability in world economies and volatility in markets. The impact may be
short-term or may last for extended periods.
PERFORMANCE
Performance
information is not provided below because the Fund has not yet been in operation
for a full calendar year. When provided, the information will provide some
indication of the risks of investing in the Fund by showing how the Fund’s
average annual returns compare with a broad measure of market performance. Past
performance does not necessarily indicate how the Fund will perform in the
future. Performance information is available on the Fund’s website at
www.strivefunds.com or by calling the Fund at (215) 882-9983.
INVESTMENT
ADVISER
AND
INVESTMENT
SUB-ADVISER
|
|
|
|
|
|
Investment
Adviser: |
Empowered
Funds, LLC dba EA Advisers (“Adviser”) |
Investment
Sub-Adviser: |
Strive
Asset Management, LLC (“Sub-Adviser”) |
PORTFOLIO
MANAGERS
Matthew
Cole, Chief Executive Officer and Chief Investment Officer of Strive and Jeffrey
Sherman a Portfolio Manager of Strive, are each a co-Portfolio Manager of the
Fund and are primarily responsible for the day-to-day management of the Fund.
Mr. Cole has managed the Fund since its inception (August 2022) and Mr. Sherman
has managed the Fund since June 2023.
SUMMARY
INFORMATION
ABOUT
PURCHASES,
SALES,
TAXES,
AND
FINANCIAL
INTERMEDIARY
COMPENSATION
PURCHASE
AND
SALE
OF
FUND
SHARES
The
Fund issues and redeems Shares on a continuous basis only in large blocks of
Shares (e.g., 10,000) called “Creation Units,” and only APs (typically,
broker-dealers) may purchase or redeem Creation Units. Creation Units generally
are issued and redeemed ‘in-kind’ for securities and partially in cash.
Individual Shares may only be purchased and sold in secondary market
transactions through brokers. Once created, individual Shares generally trade in
the secondary market at market prices that change throughout the day. Market
prices of Shares may be greater or less than their NAV. In addition, if you
purchase Shares through an employee benefit plan, the Sub-Adviser may make
payments to the recordkeeper, broker/dealer, bank, or other financial
institution or organization (each a “Financial Intermediary”) that provides
shareholder recordkeeping or other administrative services to the plan as
compensation for those services. These payments may create a conflict of
interest by influencing your Financial Intermediary to make available the Fund
over other investments. Except
when aggregated in Creation Units, the Fund’s shares are not redeemable
securities.
TAX
INFORMATION
The
Fund’s distributions generally are taxable to you as ordinary income, capital
gain, or some combination of both, unless your investment is in an Individual
Retirement Account (“IRA”) or other tax-advantaged account. However, subsequent
withdrawals from such a tax-advantaged account may be subject to federal income
tax. You should consult your tax advisor about your specific tax
situation.
PURCHASES
THROUGH
BROKER-DEALERS
AND
OTHER
FINANCIAL
INTERMEDIARIES
If
you purchase Shares through a broker-dealer or other financial intermediary, the
Fund and its related companies may pay the intermediary for the sale of Shares
and related services. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your salesperson to
recommend Shares over another investment. Ask your salesperson or visit your
financial intermediary’s website for more information.
STRIVE
U.S. SEMICONDUCTOR
ETF
Fund
Summary
INVESTMENT
OBJECTIVE
Strive
U.S. Semiconductor ETF (the “Fund”) seeks to track the total return performance,
before fees and expenses, of an index composed of U.S.-listed equities in the
semiconductor sector.
FEES
AND
EXPENSES
This
table describes the fees and expenses that you may pay if you buy, hold, and
sell shares of the Fund (“Shares”). You may also pay brokerage commissions on
the purchase and sale of Shares, which are not reflected in the table or example
below.
ANNUAL
FUND
OPERATING
EXPENSES
(EXPENSES THAT YOU PAY EACH YEAR AS A PERCENTAGE OF THE VALUE OF YOUR
INVESTMENT)1
|
|
|
|
|
|
|
|
Management
Fee |
0.40 |
% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses |
0.00 |
% |
Total
Annual Fund Operating Expenses |
0.40 |
% |
1The
Fund’s investment advisory agreement provides that the Fund’s investment adviser
will pay substantially all expenses of the Fund, except for the fee payment
under the Fund’s Investment Advisory Agreement, payments under the Fund’s Rule
12b-1 Distribution and Service Plan, brokerage expenses, acquired fund fees and
expenses, taxes, interest (including borrowing costs), litigation expense and
other non-routine or extraordinary expenses. Additionally, the Fund shall be
responsible for its non-operating expenses, and fees and expenses associated
with the Fund’s securities lending program, if applicable.
EXAMPLE
The
following example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other funds. The example assumes that you
invest $10,000 for the time periods indicated and then redeem all of your Shares
at the end of those periods. The example also assumes that the Fund provides a
return of 5% a year and that operating expenses remain the same. You may also
pay brokerage commissions on the purchase and sale of Shares, which are not
reflected in the example. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
|
|
|
|
|
|
|
|
|
|
|
|
One
Year: |
Three
Years: |
Five
Years: |
Ten
Years: |
$41 |
$128 |
$224 |
$505 |
PORTFOLIO
TURNOVER
The
Fund may pay transaction costs, including commissions when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. For the
fiscal period ended July 31, 2023, the portfolio turnover rate for the Fund was
10% of the average value of its portfolio.
PRINCIPAL
INVESTMENT STRATEGIES
The
Fund’s Investment Strategy
The
Fund seeks to track the investment results of the Solactive United States
Semiconductors 30 Capped Index (the “Index”), which measures the performance of
the largest thirty (30) U.S. companies in the U.S. semiconductor sector as
defined by Solactive AG (the “Index Provider” or “Solactive”). The Index
includes large, mid, and small capitalization companies.
The
Index is a subset of a float-adjusted capitalization weighted index of equity
securities covering approximately the largest 99% of the free-float market
capitalization in the U.S. stock market stock market. While the Index includes
large, mid and small capitalization companies, it is anticipated that the Fund’s
holdings will be comprised primarily of large and mid-capitalization
companies.
The
Index uses a capping methodology to constrain individual securities at quarterly
rebalance to ensure: (i) the weight of the five securities with the largest free
float market capitalization shall be capped at 7.5% per security and (ii) the
weights of the remaining securities shall not have a weight greater than 4.5%
per security. The Index will generally be comprised of thirty securities, but
may be less, depending upon eligible securities and underlying liquidity
thereof.
The
weight of one or more securities in the Index may exceed these limits due to
fluctuations in market value, corporate actions, or other events that change the
Index composition between quarterly rebalance dates.
Substantially
all of the Index is expected to be represented by securities of companies in the
semiconductor sector. Such companies generally include semiconductor
manufacturers and suppliers of materials that are used by semi-conductor
companies. As of September 30, 2023, over 95% of the Index was comprised of
semiconductor companies. The Index Provider currently identifies semiconductor
companies utilizing the industry classification analysis of the North America
Industry Classification System, which is a third party that is not affiliated
with the Fund, the Adviser, the Sub-Adviser (as defined below) or the Index
Provider. The components of the Index are likely to change over time. The Index
is calculated as a total return index in U.S. dollars. The Index is normally
reconstituted on a quarterly basis in February, May, August, and
November.
Strive
Asset Management, LLC (the “Sub-Adviser”) uses a “passive” or indexing approach
to try to achieve the Fund’s investment objective. Unlike many investment
companies, the Fund does not try to “beat” the index it tracks and does not seek
temporary defensive positions when markets decline or appear
overvalued.
Indexing
may eliminate the chance that the Fund will substantially outperform the Index
but also may reduce some of the risks of active management, such as poor
security selection. Indexing seeks to achieve lower costs and better after-tax
performance by aiming to keep portfolio turnover low in comparison to actively
managed investment companies.
Under
normal circumstances, at least 80% of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested in U.S. semiconductor
companies. The Sub-Adviser expects that, over time, the correlation between the
Fund’s performance and that of the Index, before fees and expenses, will be 95%
or better.
The
Fund will generally use a “replication” strategy to seek to achieve its
investment objective, meaning the Fund will invest in all of the component
securities of the Index in the same approximate proportions as in the Index, but
may, when the Sub-Adviser believes it is in the best interests of the Fund, use
a “representative sampling” strategy, meaning the Fund may invest in a sample of
the securities in the Index whose risk, return and other characteristics closely
resemble the risk, return and other characteristics of the Index as a
whole.
The
Fund will be considered to be non-diversified, which means that it may invest
more of its assets in the securities of a single issuer or a smaller number of
issuers than if it were a diversified fund.
The
Fund will concentrate its investments (i.e., hold 25% or more of its total
assets) in the semiconductor sector to approximately the same extent that the
Index is concentrated.
PRINCIPAL
RISKS
An
investment in the Fund involves risk, including those described below.
There
is no assurance that the Fund will achieve its investment objective.
An investor may lose money by investing in the Fund. An investment in the Fund
is not a bank deposit and is not insured or guaranteed by the FDIC or any
government agency. More complete risk descriptions are set forth below under the
heading “Additional
Information About the Fund’s Risks”.
Semiconductor
Sector Risk.
The semiconductor sector is highly cyclical and periodically experiences
significant economic downturns characterized by diminished product demand,
resulting in production overcapacity and excess inventory, which can result in
rapid erosion of product selling prices. The sector has experienced significant
downturns, often in connection with, or in anticipation of, maturing product
cycles of both semiconductor companies’ and their customers’ products and the
decline in general economic conditions.
Technology
Sector Risk. The
Fund will have exposure to companies operating in the technology sector.
Technology companies, including information technology companies, may have
limited product lines, financial resources and/or personnel. Technology
companies typically face intense competition and potentially rapid product
obsolescence. They are also heavily dependent on intellectual property rights
and may be adversely affected by the loss or impairment of those
rights.
Investment
Risk. When
you sell your Shares of the Fund, they could be worth less than what you paid
for them. The Fund could lose money due to short-term market movements and over
longer periods during market downturns. Securities may decline in value due to
factors affecting securities markets generally or particular asset classes or
industries represented in the markets. The value of a security may decline due
to general market conditions, economic trends or events that are not
specifically related to the issuer of the security or to factors that affect a
particular industry or group of industries. During a general downturn in the
securities markets, multiple asset classes may be negatively affected.
Therefore, you may lose money by investing in the Fund.
Equity
Investing Risk. An
investment in the Fund involves risks similar to those of investing in any fund
holding equity securities, such as market fluctuations, changes in interest
rates and perceived trends in stock prices. The values of equity securities
could decline generally or could underperform other investments. In addition,
securities may decline in value due to factors affecting a specific issuer,
market or securities markets generally.
Large-Capitalization
Companies Risk. Large-capitalization
companies may trail the returns of the overall stock market.
Large-capitalization stocks tend to go through cycles of doing better – or worse
– than the stock market in general. These periods have, in the past, lasted for
as long as several years. When large capitalization companies are out of favor,
these securities may lose value or may not appreciate in line with the overall
market. In addition, large capitalization companies may be unable to respond
quickly to new competitive challenges, such as changes in technology or consumer
tastes, and also may not be able to attain the high growth rate of successful
small companies, especially during extended periods of economic
expansion.
Mid-Capitalization
Companies Risk. The
securities of mid-capitalization companies may be more vulnerable to adverse
issuer, market, political, or economic developments than securities of
larger-capitalization companies. The securities of mid-capitalization companies
generally trade in lower volumes and are subject to greater and more
unpredictable price changes than larger capitalization stocks or the stock
market as a whole. Some mid-capitalization companies have limited product lines,
markets, and financial and managerial resources and tend to concentrate on fewer
geographical markets relative to larger capitalization companies.
Concentration
Risk. In
following its methodology, the Index will be concentrated to a significant
degree in securities of issuers in the semiconductor sector. To the extent that
the Index concentrates in the securities of issuers in a particular industry,
group of industries or sector(s), the Fund also will concentrate its investments
to approximately the same extent. By concentrating its investments in the
semiconductor sector, the Fund may face more risks than if it were diversified
broadly over numerous industries, groups of industries or sectors.
Non-Diversification
Risk. Because
the Fund is non-diversified, it may be more sensitive to economic, business,
political or other changes affecting individual issuers or investments than a
diversified fund, which may result in greater fluctuation in the value of the
Fund’s Shares and greater risk of loss.
Passive
Investment Risk. The
Fund is not actively managed and the Sub-Adviser will not sell any investments
due to current or projected underperformance of the securities, industries or
sector in which it invests, unless the investment is removed from the Index,
sold in connection with a rebalancing of the Index as addressed in the Index
methodology, or sold to comply with the Fund’s investment limitations (for
example, to maintain the Fund’s tax status). The Fund will maintain investments
until changes to its Index are triggered, which could cause the Fund’s return to
be lower than if the Fund employed an active strategy.
Index
Calculation Risk. The
Index relies on various sources of information to assess the criteria of issuers
included in the Index, including fundamental information that may be based on
assumptions and estimates. Neither the Fund, the Sub-Adviser nor the Index
Provider can offer assurances that the Index’s calculation methodology or
sources of information will provide a correct valuation of securities, nor can
they guarantee the availability or timeliness of the production of the
Index.
Tracking
Error Risk.
As with all index funds, the performance of the Fund and its respective Index
may differ from each other for a variety of reasons. For example, the Fund
incurs operating expenses and portfolio transaction costs not incurred by the
Index. In addition, the Fund may not be fully invested in the securities of the
Index at all times or may hold securities not included in the
Index.
ETF
Risks.
•Authorized
Participants, Market Makers and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act as
Authorized Participants (“APs”). In addition, there may be a limited number of
market makers and/or liquidity providers in the marketplace. To the extent
either of the following events occur, Fund Shares may trade at a material
discount to NAV and possibly face delisting: (i) APs exit the business or
otherwise become unable to process creation and/or redemption orders and no
other APs step forward to perform these services, or (ii) market makers and/or
liquidity providers exit the business or significantly reduce their business
activities and no other entities step forward to perform their
functions.
•Premium-Discount
Risk. The
Shares may trade above or below their net asset value (“NAV”). The market prices
of Shares will generally fluctuate in accordance with changes in NAV as well as
the relative supply of, and demand for, Shares on NYSE Arca, Inc. (the
“Exchange”) or other securities exchanges. The trading price of Shares may
deviate significantly from NAV during periods of market volatility or limited
trading activity in Shares. In addition, you may incur the cost of the “spread,”
that is, any difference between the bid price and the ask price of the
Shares.
•Cost
of Trading Risk. Investors
buying or selling Shares in the secondary market will pay brokerage commissions
or other charges imposed by brokers as determined by that broker. Brokerage
commissions are often a fixed amount and may be a significant proportional cost
for investors seeking to buy or sell relatively small amounts of Shares. In
addition, secondary market investors will also incur the cost of the difference
between the price that an investor is willing to pay for Shares (the “bid”
price) and the price at which an investor is willing to sell Shares (the “ask”
price). This difference in bid and ask prices is often referred to as the
“spread” or “bid/ask spread.” The bid/ask spread varies over time for Shares
based on trading volume and market liquidity, and is generally lower if the
Fund’s Shares have more trading volume and market liquidity and higher if the
Fund’s Shares have little trading volume and market liquidity. Further,
increased market volatility may cause increased bid/ask spreads.
•Trading
Risk. Although
the Shares are listed on the Exchange, there can be no assurance that an active
or liquid trading market for them will develop or be maintained. In addition,
trading in Shares on the Exchange may be halted. In stressed market conditions,
the liquidity of the Fund’s Shares may begin to mirror the liquidity of its
underlying portfolio holdings, which can be less liquid than the Fund’s Shares,
potentially causing the market price of the Fund’s Shares to deviate from its
NAV. The spread varies over time for Shares of the Fund based on the Fund’s
trading volume and market liquidity, and is generally lower if the Fund has high
trading volume and market liquidity, and higher if the Fund has little trading
volume and market liquidity (which is often the case for funds that are newly
launched or small in size).
Index
Rebalance Risk. Because
the Index generally changes its exposure based on data that is analyzed in
connection with a quarterly rebalance (a “Rebalance”), (i) the Index’s exposure
may be affected by significant market movements at or around the time of a
Rebalance that are not predictive of the market’s performance for the subsequent
Rebalance and (ii) changes to the Index’s exposure may lag a significant change
in the market’s direction (up or down) by as long as a quarter if such changes
first take effect at or around the time of Rebalance. Such lags between market
performance and changes to the Index’s exposure may result in significant
underperformance relative to the broader equity or fixed income market. Index
rebalances may cause the Fund to purchase or sell securities at inopportune
times or for prices other than at current market values. Due to these factors,
the variation between the Fund’s annual return and the return of the Index may
increase significantly.
Limited
Operating History Risk. The
Fund is a recently organized management investment company with a limited
operating history. As a result, prospective investors have a limited track
record or history on which to base their investment decision. There can be no
assurance that the Fund will grow to or maintain an economically viable
size.
Geopolitical/Natural
Disaster Risks. The
Fund’s investments are subject to geopolitical and natural disaster risks, such
as war, terrorism, trade disputes, political or economic dysfunction within some
nations, public health crises and related
geopolitical
events, as well as environmental disasters, epidemics and/or pandemics, which
may add to instability in world economies and volatility in markets. The impact
may be short-term or may last for extended periods.
PERFORMANCE
Performance
information is not provided below because the Fund has not yet been in operation
for a full calendar year. When provided, the information will provide some
indication of the risks of investing in the Fund by showing how the Fund’s
average annual returns compare with a broad measure of market performance. Past
performance does not necessarily indicate how the Fund will perform in the
future. Performance information is available on the Fund’s website at
www.strivefunds.com or by calling the Fund at (215) 882-9983.
INVESTMENT
ADVISER
|
|
|
|
|
|
Investment
Adviser: |
Empowered
Funds, LLC dba EA Advisers (“Adviser”) |
Investment
Sub-Adviser: |
Strive
Asset Management, LLC (“Sub-Adviser”) |
PORTFOLIO
MANAGERS
Matthew
Cole, Chief Executive Officer and Chief Investment Officer of Strive and Jeffrey
Sherman a Portfolio Manager of Strive, are each a co-Portfolio Manager of the
Fund and are primarily responsible for the day-to-day management of the Fund.
Mr. Cole has managed the Fund since its inception (October 2022) and Mr. Sherman
has managed the Fund since June 2023.
SUMMARY
INFORMATION
ABOUT
PURCHASES,
SALES,
TAXES,
AND
FINANCIAL
INTERMEDIARY
COMPENSATION
PURCHASE
AND
SALE
OF
FUND
SHARES
The
Fund issues and redeems Shares on a continuous basis only in large blocks of
Shares, (e.g., 10,000 Shares) called “Creation Units,” and only APs (typically,
broker-dealers) may purchase or redeem Creation Units. Creation Units generally
are issued and redeemed ‘in-kind’ for securities and partially in cash.
Individual Shares may only be purchased and sold in secondary market
transactions through brokers. Once created, individual Shares generally trade in
the secondary market at market prices that change throughout the day. Market
prices of Shares may be greater or less than their NAV. In addition, if you
purchase Shares through an employee benefit plan, the Sub-Adviser may make
payments to the recordkeeper, broker/dealer, bank, or other financial
institution or organization (each a “Financial Intermediary”) that provides
shareholder recordkeeping or other administrative services to the plan as
compensation for those services. These payments may create a conflict of
interest by influencing your Financial Intermediary to make available the Fund
over other investments. Except
when aggregated in Creation Units, the Fund’s shares are not redeemable
securities.
TAX
INFORMATION
The
Fund’s distributions generally are taxable to you as ordinary income, capital
gain, or some combination of both, unless your investment is in an Individual
Retirement Account (“IRA”) or other tax-advantaged account. However, subsequent
withdrawals from such a tax-advantaged account may be subject to federal income
tax. You should consult your tax advisor about your specific tax
situation.
PURCHASES
THROUGH
BROKER-DEALERS
AND
OTHER
FINANCIAL
INTERMEDIARIES
If
you purchase Shares through a broker-dealer or other financial intermediary, the
Fund and its related companies may pay the intermediary for the sale of Shares
and related services. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your salesperson to
recommend Shares over another investment. Ask your salesperson or visit your
financial intermediary’s website for more information.
STRIVE
FAANG 2.0 ETF
Fund
Summary
INVESTMENT
OBJECTIVE
The
Strive FAANG 2.0 ETF (the “Fund”) seeks to track the total return performance,
before fees and expenses, of an index composed of companies that are engaged in
national security and natural resource security.
FEES
AND
EXPENSES
This
table describes the fees and expenses that you may pay if you buy, hold, and
sell shares of the Fund (“Shares”). You may also pay brokerage commissions on
the purchase and sale of Shares, which are not reflected in the table and
example below.
ANNUAL
FUND
OPERATING
EXPENSES
(EXPENSES
THAT YOU PAY EACH YEAR AS A PERCENTAGE OF THE VALUE OF YOUR
INVESTMENT)1
|
|
|
|
|
|
|
|
Management
Fee |
0.49 |
% |
Distribution
and/or Service (12b-1) Fees |
None |
Other
Expenses2 |
0.00 |
% |
Total
Annual Fund Operating Expenses |
0.49 |
% |
1The
Fund’s investment advisory agreement provides that the Fund’s investment adviser
will pay substantially all expenses of the Fund, except for the fee payment
under the Fund’s Investment Advisory Agreement, payments under the Fund’s Rule
12b-1 Distribution and Service Plan, brokerage expenses, acquired fund fees and
expenses, taxes, interest (including borrowing costs), litigation expense and
other non-routine or extraordinary expenses. Additionally, the Fund shall be
responsible for its non-operating expenses, and fees and expenses associated
with the Fund’s securities lending program, if applicable.
2Other
Expenses are estimated for the current fiscal year.
EXAMPLE
The
following example is intended to help you compare the cost of investing in the
Fund with the cost of investing in other funds. The example assumes that you
invest $10,000 for the time periods indicated and then redeem all of your Shares
at the end of those periods. The example also assumes that the Fund provides a
return of 5% a year and that operating expenses remain the same. You may also
pay brokerage commissions on the purchase and sale of Shares, which are not
reflected in the example. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:
|
|
|
|
|
|
|
|
|
|
|
|
|
One
Year: |
Three
Years: |
|
|
$50 |
$157 |
|
PORTFOLIO
TURNOVER
The
Fund may pay transaction costs, including commissions when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance. The Fund
had not yet commenced investment operations as of the fiscal year ended July 31,
2023, and therefore portfolio turnover information is not
available.
PRINCIPAL
INVESTMENT STRATEGIES
The
Fund’s Investment Strategy
The
Fund seeks to track the investment results of the Bloomberg FAANG 2.0 Select
Index (the “Index”), which measures the performance of companies that are
engaged in national security and natural resource security as defined by
Bloomberg (the “Index Provider” or “Bloomberg”). The Index includes large- and
mid-capitalization companies.
To
be eligible for inclusion in the Index, a security must be a member of the
Bloomberg Developed Markets North America Large, Mid & Small Index, which is
a free float, market-cap weighted equity index. The Bloomberg North America
Large, Mid & Small Index includes the largest companies that comprise 99% of
total market capitalization in North America. Thereafter, only U.S. and Canadian
listed securities are included.
Each
company that is included in the Index must focus its primary business activities
in the “Fuel”, “Aerospace and Defense”, “Agriculture”, “Nuclear”, and “Gold and
Other Base and Precious Metals” (or “Gold”) sectors (collectively, the “FAANG
Sectors”). Companies within the FAANG Sectors must be classified as: (i) Fuel,
which includes issuers in the oil and gas sector, (ii) Aerospace, which includes
companies in the aerospace and defense sector, (iii) Agriculture, which includes
companies in the agriculture chemicals, agriculture producers, agricultural
machinery sector, (iv) Nuclear, which includes issuers in the nuclear energy
sector, and (v) Gold, which includes companies involved in mining of base and
precious metals. The Index utilizes Bloomberg Industry Classification codes to
determine sector classifications for the Fuel, Aerospace and Defense,
Agriculture, and Gold categories, and the Nuclear BI Theme Basket for the
Nuclear category.
Bloomberg
identifies companies that are within each FAANG Sector and those companies are
ranked based on issuer free float market capitalization. Each of the five FAANG
Sectors are equal-weighted (20% each) at the time of rebalance. Within each
FAANG sector, the top 10 issuers based on free float market capitalization are
selected for inclusion in the Index. Thereafter, each security’s weight is
determined by dividing its free float market capitalization by the sum of the
free float market capitalizations of all securities in the Index. The Index has
approximately 50 constituents. The components of the Index are likely to change
over time.
As
of July 31, 2023, the Index had the following exposures to each FAANG Sector:
19.54% in Fuel, 19.28% in Aerospace, 20.95% in Agriculture, 20.00% in Nuclear
and 20.23% in Gold. As of July 31, 2023, the Index had 51 constituents and
represented approximately 3.77% of the total market value of the Bloomberg World
Aggregate Index. As of July 31, 2023, the range of market capitalizations of
issuers included in the Index was $429.3 billion to $3.2 billion.
The
Index is calculated as a total return index in U.S. dollars. The Index is
normally rebalanced on a quarterly basis in March, June, September, and
December. The Fund is also rebalanced in March, June, September, and
December.
Strive
Asset Management, LLC (the “Sub-Adviser”) uses a “passive” or indexing approach
to try to achieve the Fund’s investment objective. Unlike many investment
companies, the Fund does not try to “beat” the index it tracks and does not seek
temporary defensive positions when markets decline or appear
overvalued.
Indexing
may eliminate the chance that the Fund will substantially outperform the Index
but also may reduce some of the risks of active management, such as poor
security selection. Indexing seeks to achieve lower costs and better after-tax
performance by aiming to keep portfolio turnover low in comparison to actively
managed investment companies.
Under
normal circumstances, at least 80% of the Fund’s net assets, plus the amount of
any borrowings for investment purposes will be invested in the FAANG
Sectors.
The
Fund will generally use a “replication” strategy to seek to achieve its
investment objective, meaning the Fund will invest in all of the component
securities of the Index in the same approximate proportions as in the Index, but
may, when the Sub-Adviser believes it is in the best interests of the Fund, use
a “representative sampling” strategy, meaning the Fund may invest in a sample of
the securities in the Index whose risk, return and other characteristics closely
resemble the risk, return and other characteristics of the Index as a
whole.
The
Fund will be considered to be non-diversified, which means that it may invest
more of its assets in the securities of a single issuer or a smaller number of
issuers than if it were a diversified fund.
The
Fund will concentrate its investments (i.e., hold 25% or more of its total
assets) in the FAANG Sectors to approximately the same extent that the Index is
so concentrated.
PRINCIPAL
RISKS
An
investment in the Fund involves risk, including those described below.
There
is no assurance that the Fund will achieve its investment objective.
An investor may lose money by investing in the Fund. An investment in the Fund
is not a bank deposit and is not insured or guaranteed by the FDIC or any
government agency. More complete risk descriptions are set forth below under the
heading “Additional
Information About the Fund’s Risks”.
Equity
Investing Risk. An
investment in the Fund involves risks similar to those of investing in any fund
holding equity securities, such as market fluctuations, changes in interest
rates and perceived trends in stock prices. The values of equity securities
could decline generally or could underperform other investments. In addition,
securities may decline in value due to factors affecting a specific issuer,
market or securities markets generally.
Oil
and Gas Sector Risk. The
profitability of companies in the oil and gas sector is related to worldwide
energy prices, exploration costs, and production spending. Companies in the oil
and gas sector may be at risk for environmental damage claims and other types of
litigation, as well as negative publicity and perception. Companies in the oil
and gas sector may be adversely affected by natural disasters or other
catastrophes, changes in exchange rates, interest rates, changes in prices for
competitive energy services, economic conditions, tax treatment, government
regulation and intervention, and unfavorable events in the regions where
companies operate (e.g., expropriation, nationalization, confiscation of assets
and property or imposition of restrictions on foreign investments and
repatriation of capital, military coups, social unrest, violence or labor
unrest). As a result, the value of these companies may fluctuate widely.
Companies in the oil and gas sector may have significant capital investments in,
or engage in transactions involving, emerging market countries, which may
heighten these risks. Any of these factors could result in a material adverse
impact on the Fund’s securities and the performance of the Fund.
Aerospace
and Defense Sector Risk.
Aerospace and defense companies can be significantly affected by government
aerospace and defense regulation and spending policies because companies
involved in this industry rely to a significant extent on U.S. (and other)
government demand for their products and services. Thus, the financial condition
of, and investor interest in, aerospace and defense companies are heavily
influenced by governmental defense spending policies which are typically under
pressure from efforts to control the U.S. (and other) government budgets. The
aerospace industry in particular has recently been affected by adverse economic
conditions and consolidation within the industry.
Nuclear
Energy Sector Risk.
The Fund will be sensitive to, and its performance will depend to a greater
extent on, the overall condition of nuclear energy companies. The companies
represented in the Fund’s portfolio may face considerable risk as a result of,
among other risks, incidents and accidents, breaches of security,
ill-intentioned acts or terrorism, natural disasters (such as floods or
earthquakes), equipment malfunctions or mishandling in storage, handling,
transportation, treatment or conditioning of substances and nuclear materials.
Such events could have serious consequences, especially in case of radioactive
contamination and irradiation of the environment, for the general population, as
well as a material, negative impact on the Fund’s portfolio companies and thus
the Fund’s financial situation. In addition, the nuclear energy sector is
subject to competitive risk associated with the prices of other energy sources,
such as natural gas and oil. Consumers of nuclear energy may have the ability to
switch between nuclear energy and other energy sources and, as a result, during
periods when competing energy sources are less expensive, the revenues of
companies in the nuclear energy sector may decline with a corresponding impact
on earnings.
Nuclear
activity is also subject to particularly detailed and restrictive regulations,
with a scheme for the monitoring and periodic re-examination of operating
authorization, which primarily takes into account nuclear safety, environmental
and public health protection, and also national security considerations
(terrorist threats in particular). These regulations and any future regulations
may be subject to significant tightening by national and international
authorities. This could result in increased operating costs, which would have a
negative impact on the Fund’s portfolio companies and may cause operating
businesses related to nuclear energy to become unprofitable or impractical to
operate. Furthermore, uranium prices are subject to fluctuation. The price of
uranium has been and will continue to be affected by numerous factors beyond the
Fund’s control. With respect to uranium, such factors include the demand for
nuclear power, political and economic conditions in uranium producing and
consuming countries, uranium supply from secondary sources and uranium
production levels and costs of production. In addition, the prices of crude oil,
natural gas and electricity produced from traditional hydro power and possibly
other undiscovered energy sources could potentially have a negative impact on
the competitiveness of nuclear energy companies in which the Fund
invests.
Agriculture
Sector Risk.
Economic forces, including forces affecting agricultural markets, as well as
government policies and regulations affecting agriculture companies, could
adversely impact the Fund’s investments. Agricultural and livestock production
and trade flows are significantly affected by government policies and
regulations. Governmental policies affecting agriculture companies, such as
taxes, tariffs, duties, subsidies and import and export restrictions on
agricultural commodities, commodity products and livestock, can influence
agriculture company profitability, the planting/raising of certain
crops/livestock versus other uses of resources, the location and size of crop
and livestock production, whether unprocessed or processed commodity products
are traded and the volume and types of
imports
and exports. In addition, companies in the agriculture sector must comply with a
broad range of environmental laws and regulations.
Gold
and Precious Metals Risk. The
Fund will be sensitive to changes in the overall condition of the gold, precious
metals and mining sector. Competitive pressures may have a significant effect on
the financial condition of companies in such industry. Also, such companies are
highly dependent on the price of certain precious metals. These prices may
fluctuate substantially over short periods of time, so the Fund’s share price
may be more volatile than other types of investments. The prices of precious
metals rise and fall in response to many factors, including: economic cycles;
changes in inflation or expectations about inflation in various countries;
interest rates; currency fluctuations; metal sales by governments, central
banks, or international agencies; investment speculation; resource availability;
fluctuations in industrial and commercial supply and demand; government
regulation of the metals and materials industries; and government prohibitions
or restrictions on the private ownership of certain precious and rare metals.
The Index measures, in part, the performance of equity securities of gold and
precious metals companies and does not measure the performance of direct
investment in precious metals. Consequently, the Fund’s share price may not move
in the same direction and to the same extent as the spot prices of precious
metals.
Foreign
Investment Risk. Returns
on investments in foreign securities could be more volatile than, or trail the
returns on, investments in U.S. securities. Investments in or exposures to
foreign securities are subject to special risks, including risks associated with
foreign securities generally, such as differences in information available about
issuers of securities and investor protection standards applicable in other
jurisdictions; capital controls risks, including the risk of a foreign
jurisdiction imposing restrictions on the ability to repatriate or transfer
currency or other assets; currency risks; political, diplomatic and economic
risks; regulatory risks; and foreign market and trading risks, including the
costs of trading and risks of settlement in foreign jurisdictions.
Canadian
Investment Risk. Investments
in securities of Canadian issuers involve risks and special considerations not
typically associated with investments in the U.S. securities markets. The
Canadian economy is very dependent on the demand for, and supply and price of,
natural resources. The Canadian market is relatively concentrated in issuers
involved in the production and distribution of natural resources. There is a
risk that any changes in natural resources sectors could have an adverse impact
on the Canadian economy. Additionally, the Canadian economy is heavily dependent
on relationships with certain key trading partners including the United States,
countries in the European Union and China. Because the United States is Canada’s
largest trading partner and foreign investor, the Canadian economy is dependent
on and may be significantly affected by developments impacting the U.S. economy.
Reduction in spending on Canadian products and services or changes in the U.S.
economy may adversely impact the Canadian economy. Uncertainty as to the future
of certain trade agreements between the U.S. and Canada may cause a decline in
the value of the Fund’s Shares. In addition, certain sectors of Canada’s economy
may be subject to foreign ownership limitations. This may negatively impact the
Fund’s ability to invest in Canadian issuers and to track the
Index.
Natural
Resources and Commodity-Related Industries Risk.
The Fund is subject to the risks associated with companies in the natural
resources and commodities-related industries. These industries can be
significantly affected by (and often rapidly affected by) changes in the supply
of, or demand for, various natural resources and commodities. Investments in
natural resources companies, which include companies engaged in energy (oil, gas
& consumable fuels), agriculture, and precious and industrial metals and
mining can be significantly affected by events relating to these industries,
including international political and economic developments, embargoes, tariffs,
inflation, weather and natural disasters, livestock diseases, limits on
exploration, rapid changes in the supply and demand for natural resources and
other factors. The Fund’s investments may experience substantial price
fluctuations as a result of these factors, and may move independently of the
trends of other operating companies. Companies engaged in the sectors listed
above may be adversely affected by changes in government policies and
regulations, technological advances and/or obsolescence, environmental damage
claims, energy conservation efforts, the success of exploration projects,
limitations on the liquidity of certain natural resources and commodities and
competition from new market entrants. Changes in general economic conditions,
including commodity price volatility, changes in exchange rates, imposition of
import controls, rising interest rates, prices of raw materials and other
commodities, depletion of resources and labor relations, could adversely affect
the Fund’s investments.
Investment
Risk. When
you sell your Shares of the Fund, they could be worth less than what you paid
for them. The Fund could lose money due to short-term market movements and over
longer periods during market downturns. Securities may decline in value due to
factors affecting securities markets generally or particular asset classes or
industries
represented in the markets. The value of a security may decline due to general
market conditions, economic trends or events that are not specifically related
to the issuer of the security or to factors that affect a particular industry or
group of industries. During a general downturn in the securities markets,
multiple asset classes may be negatively affected. Therefore, you may lose money
by investing in the Fund.
Large-Capitalization
Companies Risk.
Large-capitalization companies may trail the returns of the overall stock
market. Large-capitalization stocks tend to go through cycles of doing better –
or worse – than the stock market in general. These periods have, in the past,
lasted for as long as several years. When large capitalization companies are out
of favor, these securities may lose value or may not appreciate in line with the
overall market. In addition, large capitalization companies may be unable to
respond quickly to new competitive challenges, such as changes in technology or
consumer tastes, and also may not be able to attain the high growth rate of
successful small companies, especially during extended periods of economic
expansion.
Mid-Capitalization
Companies Risk.
The securities of mid-capitalization companies may be more vulnerable to adverse
issuer, market, political, or economic developments than securities of
larger-capitalization companies. The securities of mid-capitalization companies
generally trade in lower volumes and are subject to greater and more
unpredictable price changes than larger capitalization stocks or the stock
market as a whole. Some mid-capitalization companies have limited product lines,
markets, and financial and managerial resources and tend to concentrate on fewer
geographical markets relative to larger capitalization companies.
Concentration
Risk.
In following its methodology, the Index may be concentrated to a significant
degree in securities of issuers located in the Fuel, Aerospace, Agriculture and
Gold sectors. By concentrating its investments in the Fuel, Aerospace,
Agriculture and Gold sectors, the Fund may face more risks than if it were
diversified broadly over numerous industries or groups of
industries.
Non-Diversification
Risk. Because
the Fund is non-diversified, it may be more sensitive to economic, business,
political or other changes affecting individual issuers or investments than a
diversified fund, which may result in greater fluctuation in the value of the
Fund’s Shares and greater risk of loss.
Passive
Investment Risk. The
Fund is not actively managed, and the Sub-Adviser will not sell any investments
due to current or projected underperformance of the securities, industries or
sector in which it invests, unless the investment is removed from the Index,
sold in connection with a rebalancing of the Index as addressed in the Index
methodology, or sold to comply with the Fund’s investment limitations (for
example, to maintain the Fund’s tax status). The Fund will maintain investments
until changes to its Index are triggered, which could cause the Fund’s return to
be lower than if the Fund employed an active strategy.
Index
Calculation Risk. The
Index relies on various sources of information to assess the criteria of issuers
included in the Index, including fundamental information that may be based on
assumptions and estimates. Neither the Fund, the Adviser, the Sub-Adviser nor
the Index Provider can offer assurances that the Index’s calculation methodology
or sources of information will provide a correct valuation of securities, nor
can they guarantee the availability or timeliness of the production of the
Index.
Tracking
Error Risk.
As with all index funds, the performance of the Fund and its respective Index
may differ for a variety of reasons. For example, a Fund incurs operating
expenses and portfolio transaction costs not incurred by the Index. In addition,
the Fund may not be fully invested in the securities of the Index at all times
or may hold securities not included in the Index.
ETF
Risks.
•Authorized
Participants, Market Makers and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act as
Authorized Participants (“APs”). In addition, there may be a limited number of
market makers and/or liquidity providers in the marketplace. To the extent
either of the following events occur, Fund Shares may trade at a material
discount to NAV and possibly face delisting: (i) APs exit the business or
otherwise become unable to process creation and/or redemption orders and no
other APs step forward to perform these services, or (ii) market makers and/or
liquidity providers exit the business or significantly reduce their business
activities and no other entities step forward to perform their
functions.
•Premium-Discount
Risk. The
Shares may trade above or below their net asset value (“NAV”). The market prices
of Shares will generally fluctuate in accordance with changes in NAV as well as
the relative supply of, and demand for, Shares on NYSE Arca, Inc. (“Exchange”)
or other securities exchanges. The trading price of Shares may deviate
significantly from NAV during periods of market volatility or limited trading
activity in Shares. In addition, you may incur the cost of the “spread,” that
is, any difference between the bid price and the ask price of the
Shares.
•Cost
of Trading Risk. Investors
buying or selling Shares in the secondary market will pay brokerage commissions
or other charges imposed by brokers as determined by that broker. Brokerage
commissions are often a fixed amount and may be a significant proportional cost
for investors seeking to buy or sell relatively small amounts of Shares. In
addition, secondary market investors will also incur the cost of the difference
between the price that an investor is willing to pay for Shares (the “bid”
price) and the price at which an investor is willing to sell Shares (the “ask”
price). This difference in bid and ask prices is often referred to as the
“spread” or “bid/ask spread.” The bid/ask spread varies over time for Shares
based on trading volume and market liquidity, and is generally lower if the
Fund’s Shares have more trading volume and market liquidity and higher if the
Fund’s Shares have little trading volume and market liquidity. Further,
increased market volatility may cause increased bid/ask spreads.
•Trading
Risk. Although
the Shares are listed on the Exchange, there can be no assurance that an active
or liquid trading market for them will be maintained. In addition, trading in
Shares on the Exchange may be halted. In stressed market conditions, the
liquidity of the Fund’s Shares may begin to mirror the liquidity of its
underlying portfolio holdings, which can be less liquid than the Fund’s Shares,
potentially causing the market price of the Fund’s Shares to deviate from its
NAV. The spread varies over time for Shares of the Fund based on the Fund’s
trading volume and market liquidity, and is generally lower if the Fund has high
trading volume and market liquidity, and higher if the Fund has little trading
volume and market liquidity (which is often the case for funds that are newly
launched or small in size).
Index
Rebalance Risk.
Because the Index generally changes its exposure based on data only as of the
last business day of March, June, September, and December (i) the Index’s
exposure may be affected by significant market movements at or near quarter end
that are not predictive of the market’s performance for the subsequent quarter
and (ii) changes to the Index’s exposure may lag a significant change in the
market’s direction (up or down) by as long as a quarter if such changes first
take effect at or near the beginning of a quarter. Such lags between market
performance and changes to the Index’s exposure may result in significant
underperformance relative to the broader equity or fixed income market. Unusual
market conditions may cause the Index Provider to postpone a scheduled
rebalance, which could cause the Index to vary from its normal or expected
composition.
New
Fund Risk. The
Fund is a recently organized management investment company with no operating
history. As a result, prospective investors have no track record or history on
which to base their investment decision. There can be no assurance that the Fund
will grow to or maintain an economically viable size.
Geopolitical/Natural
Disaster Risks. The
Fund’s investments are subject to geopolitical and natural disaster risks, such
as war, terrorism, trade disputes, political or economic dysfunction within some
nations, public health crises and related geopolitical events, as well as
environmental disasters, epidemics and/or pandemics, which may add to
instability in world economies and volatility in markets. The impact may be
short-term or may last for extended periods.
PERFORMANCE
Performance
information is not provided below because the Fund has not yet been in operation
for a full calendar year. When provided, the information will provide some
indication of the risks of investing in the Fund by showing how the Fund’s
average annual returns compare with a broad measure of market performance. Past
performance does not necessarily indicate how the Fund will perform in the
future. Performance information is available on the Fund’s website at
www.strivefunds.com or by calling the Fund at (215) 882-9983.
INVESTMENT
ADVISER
AND
INVESTMENT
SUB-ADVISER
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Investment
Adviser: |
Empowered
Funds, LLC dba EA Advisers (“Adviser”) |
Investment
Sub-Adviser: |
Strive
Asset Management, LLC (“Sub-Adviser”) |
PORTFOLIO
MANAGERS
Matthew
Cole, Chief Executive Officer and Chief Investment Officer of Strive and Jeffrey
Sherman a Portfolio Manager of Strive, are each a co-Portfolio Manager of the
Fund and have been primarily responsible for the day-to-day management of the
Fund since its inception in August 2023.
SUMMARY
INFORMATION
ABOUT
PURCHASES,
SALES,
TAXES,
AND
FINANCIAL
INTERMEDIARY
COMPENSATION
PURCHASE
AND
SALE
OF
FUND
SHARES
The
Fund issues and redeems Shares on a continuous basis only in large blocks of
Shares (e.g., 10,000 Shares) called “Creation Units,” and only APs (typically,
broker-dealers) may purchase or redeem Creation Units. Creation Units generally
are issued and redeemed ‘in-kind’ for securities and partially in cash.
Individual Shares may only be purchased and sold in secondary market
transactions through brokers. Once created, individual Shares generally trade in
the secondary market at market prices that change throughout the day. Market
prices of Shares may be greater or less than their NAV. In addition, if you
purchase Shares through an employee benefit plan, the Sub-Adviser may make
payments to the recordkeeper, broker/dealer, bank, or other financial
institution or organization (each a “Financial Intermediary”) that provides
shareholder recordkeeping or other administrative services to the plan as
compensation for those services. These payments may create a conflict of
interest by influencing your Financial Intermediary to make available the Fund
over other investments. Except
when aggregated in Creation Units, the Fund’s shares are not redeemable
securities.
TAX
INFORMATION
The
Fund’s distributions generally are taxable to you as ordinary income, capital
gain, or some combination of both, unless your investment is in an Individual
Retirement Account (“IRA”) or other tax-advantaged account. However, subsequent
withdrawals from such a tax-advantaged account may be subject to federal income
tax. You should consult your tax advisor about your specific tax
situation.
PURCHASES
THROUGH
BROKER-DEALERS
AND
OTHER
FINANCIAL
INTERMEDIARIES
If
you purchase Shares through a broker-dealer or other financial intermediary, the
Fund and its related companies may pay the intermediary for the sale of Shares
and related services. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your salesperson to
recommend Shares over another investment. Ask your salesperson or visit your
financial intermediary’s website for more information.
ADDITIONAL
INFORMATION
ABOUT
THE
FUNDS
HOW
ARE
THE
FUNDS
DIFFERENT
FROM
A
MUTUAL
FUND?
Redeemability.
Mutual fund shares may be bought from, and redeemed with, the issuing fund for
cash at NAV typically calculated once at the end of the business day. Shares of
the Fund, by contrast, cannot be purchased from or redeemed with the Fund except
by or through APs (typically, broker-dealers), and then principally for an
in-kind basket of securities (and a limited cash amount). In addition, the Fund
issues and redeems Shares on a continuous basis only in large blocks of Shares
called “Creation Units.”
Exchange
Listing.
Unlike mutual fund shares, Shares of each Fund are listed for trading on the
Exchange. Investors can purchase and sell Shares on the secondary market through
a broker. Investors purchasing Shares in the secondary market through a
brokerage account or with the assistance of a broker may be subject to brokerage
commissions and charges. Secondary-market transactions do not occur at NAV, but
at market prices that change throughout the day, based on the supply of, and
demand for, Shares and on changes in the prices of a Fund’s portfolio holdings.
The market price of Shares may differ from the NAV of a Fund. The difference
between market price of Shares and the NAV of a Fund is called a premium when
the market price is above the reported NAV and called a discount when the market
price is below the reported NAV, and the difference is expected to be small most
of the time, though it may be significant, especially in times of extreme market
volatility.
Tax
Treatment.
The Funds and the Shares have been designed to be tax-efficient. Specifically,
their in-kind creation and redemption feature has been designed to protect Fund
shareholders from adverse tax consequences applicable to non-ETF registered
investment companies as a result of cash transactions in the non-ETF registered
investment company’s shares, including cash redemptions. Nevertheless, to the
extent redemptions from a Fund are paid in cash, the Fund may realize capital
gains or losses, including in some cases short-term capital gains, upon the sale
of portfolio securities to generate the cash to satisfy the
redemption.
Transparency.
Each Fund’s portfolio holdings are disclosed on its website daily after the
close of trading on the Exchange and prior to the opening of trading on the
Exchange the following day. A description of the Funds’ policies and procedures
with respect to the disclosure of each Fund’s portfolio holdings is available in
the Funds’ Statement of Additional Information (“SAI”).
Premium/Discount
Information.
Information about the premiums and discounts at which each Fund’s Shares have
traded is available at www.strivefunds.com.
ADDITIONAL
INFORMATION
ABOUT
THE
FUNDS’
INVESTMENT
OBJECTIVES
AND
STRATEGIES
Each
Fund’s investment objective is a non-fundamental investment policy and may be
changed without a vote of shareholders upon prior written notice to
shareholders. If a Fund elects to change its investment objective, shareholders
will be given at least 60 days’ notice prior to any such change.
For
the Strive U.S. Energy ETF, under normal circumstances, at least 80% of the
Fund’s total assets (exclusive of collateral held from securities lending) will
be invested in U.S. energy companies.
For
the Strive Emerging Markets ex-China ETF, under normal circumstances,
substantially all, but at least 80%, of the Fund’s total assets (exclusive of
collateral held from securities lending) will be invested emerging market
securities.
For
the FAANG 2.0 ETF, under normal circumstances, at least 80% of the Fund’s total
assets (exclusive of collateral held from securities lending) will be invested
in the FAANG Sectors.
For
the Strive Small-Cap ETF, under normal circumstances, substantially all, but at
least 80%, of the Fund’s total assets (exclusive of collateral held from
securities lending) will be invested in U.S. small cap equity
securities.
For
the Strive 1000 Dividend Growth Fund, under normal circumstances, at least 80%
of the Fund’s total assets (exclusive of collateral held from securities
lending) will be invested in dividend paying equity securities.
For
the Strive 1000 Growth ETF and Strive 1000 Value ETF under normal circumstances,
invest substantially all of a Fund’s total assets (exclusive of collateral held
from securities lending) in the component securities of the Fund’s applicable
Index.
ADDITIONAL
INFORMATION
ABOUT
THE
FUNDS’
RISKS
The
table below provides additional information about the risks of investing in each
Fund (in alphabetical order), including the principal risks identified under
“Principal Risks” in each Fund Summary. Following the table, each risk is
explained.
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Principal
Risks |
Strive
500
ETF |
Strive
1000 Growth ETF |
Strive
1000 Value ETF |
Strive Small-Cap ETF |
Strive
1000 Dividend Growth ETF |
Concentration
Risk |
X |
X |
X |
X |
X |
Consumer
Discretionary Sector Risk |
|
X |
X |
X |
|
Dividend-Paying
Common Equity Security Risk |
|
|
|
|
X |
Energy
Sector Risk |
|
|
X |
|
|
Equity
Investing Risk |
X |
X |
X |
X |
X |
ETF
Risks |
X |
X |
X |
X |
X |
Financials
Sector Risk |
|
|
X |
X |
X |
Geopolitical/Natural
Disaster Risks |
X |
X |
X |
X |
X |
Growth
Investing Risk |
|
X |
|
|
X |
Healthcare
Sector Risk |
|
X |
X |
X |
X |
Index
Calculation Risk |
X |
X |
X |
X |
X |
Index
Rebalance Risk |
X |
X |
X |
X |
X |
Industrials
Sector Risk |
|
|
X |
X |
X |
Investment
Risk |
X |
X |
X |
X |
X |
Large-Cap
Companies Risk |
X |
X |
X |
|
X |
Limited
Operating History Risk |
X |
X |
X |
X |
X |
Mid-Cap
Companies Risk |
|
X |
X |
X |
X |
Passive
Investment Risk |
X |
X |
X |
X |
X |
REIT
Risk |
|
X |
X |
X |
|
Small-Cap
Companies Risk |
|
|
|
X |
|
Technology
Sector Risk |
X |
X |
|
X |
X |
Tracking
Error Risk |
X |
X |
X |
X |
X |
Value
Investing Risk |
|
|
X |
|
|
Communications
Sector Risk |
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
Risks |
Strive
Emerging Markets
Ex-China
ETF |
Strive
U.S. Energy ETF |
Strive
U.S. Semi- conductor ETF |
Strive
FAANG 2.0 ETF |
Aerospace
and Defense Sector Risk |
|
|
|
X |
Agricultural
Sector Risk |
|
|
|
X |
Canadian
Investment Risk |
|
|
|
X |
Concentration
Risk |
X |
X |
X |
X |
Depositary
Receipt Risk |
X |
|
|
|
Emerging
Markets Risk |
X |
|
|
|
Energy
Sector Risk |
|
X |
|
|
Equity
Investing Risk |
X |
X |
X |
X |
ETF
Risks |
X |
X |
X |
X |
Financials
Sector Risk |
X |
|
|
|
Foreign
Investment Risk |
X |
|
|
X |
Geopolitical/Natural
Disaster Risks |
X |
X |
X |
X |
Gold
and Precious Metals Risk |
|
|
|
X |
Index
Calculation Risk |
X |
X |
X |
X |
Index
Rebalance Risk |
X |
X |
X |
X |
Investment
Risk |
X |
X |
X |
X |
Large-Cap
Companies Risk |
X |
X |
X |
X |
Limited
Operating History Risk |
X |
X |
X |
|
Mid-Cap
Companies Risk |
X |
X |
X |
X |
Natural
Resources and Commodity-Related Industries Risk |
|
|
|
X |
New
Fund Risk |
|
|
|
X |
Non-Diversification
Risk |
|
X |
X |
X |
Nuclear
Energy Sector Risk |
|
|
|
X |
Oil
and Gas Sector Risk |
|
X |
|
X |
Passive
Investment Risk |
X |
X |
X |
X |
REIT
Risk |
X |
|
|
|
Sampling
Risk |
X |
|
|
|
Semiconductor
Sector Risk |
|
|
X |
|
Technology
Sector Risk |
|
|
X |
|
Tracking
Error Risk |
X |
X |
X |
X |
Aerospace
and Defense Sector Risk.
Aerospace and defense companies can be significantly affected by government
aerospace and defense regulation and spending policies because companies
involved in this industry rely to a significant extent on U.S. (and other)
government demand for their products and services. Thus, the financial condition
of, and investor interest in, aerospace and defense companies are heavily
influenced by governmental defense spending policies which are typically under
pressure from efforts to control the U.S. (and other) government budgets. The
aerospace industry in particular has recently been affected by adverse economic
conditions and consolidation within the industry.
Agriculture
Sector Risk. The
Fund will invest in agriculture companies. Economic forces, including forces
affecting agricultural markets, as well as government policies and regulations
affecting agriculture companies, could adversely impact a Fund’s investments.
Agricultural and livestock production and trade flows are significantly affected
by government policies and regulations. Governmental policies affecting
agriculture companies, such as taxes, tariffs, duties, subsidies and import and
export restrictions on agricultural commodities, commodity products and
livestock, can influence agriculture company profitability, the planting/raising
of certain crops/livestock versus other uses of resources, the location and size
of crop and livestock production, whether unprocessed or processed commodity
products are traded
and
the volume and types of imports and exports. In addition, companies in the
agriculture sector must comply with a broad range of environmental laws and
regulations. Additional or more stringent environmental laws and regulations may
be enacted in the future and such changes could have a material adverse effect
on the business of such companies. In addition, agriculture companies may be
significantly affected by adverse weather, pollution and/or disease which could
limit or halt production.
Canadian
Investment Risk. Investments
in securities of Canadian issuers, including issuers located outside of Canada
that generate significant revenue from Canada, involve risks and special
considerations not typically associated with investments in the U.S. securities
markets. The Canadian economy is very dependent on the demand for, and supply
and price of, natural resources. The Canadian market is relatively concentrated
in issuers involved in the production and distribution of natural resources.
There is a risk that any changes in natural resources sectors could have an
adverse impact on the Canadian economy. Additionally, the Canadian economy is
heavily dependent on relationships with certain key trading partners, including
the United States, countries in the EU and China. Because the United States is
Canada’s largest trading partner and foreign investor, the Canadian economy is
dependent on and may be significantly affected by the U.S. economy. Reduction in
spending on Canadian products and services or changes in the U.S. economy may
adversely impact the Canadian economy. Trade agreements may further increase
Canada’s dependency on the U.S. economy, and uncertainty as to the future of
such trade agreements may cause a decline in the value of the Fund’s Shares.
Past periodic demands by the Province of Quebec for sovereignty have
significantly affected equity valuations and foreign currency movements in the
Canadian market and such demands may have this effect in the future. In
addition, certain sectors of Canada’s economy may be subject to foreign
ownership limitations. This may negatively impact the Fund’s ability to invest
in Canadian issuers and to track the Fund’s Index.
Communications
Sector Risk.
Communication companies are particularly vulnerable to the potential
obsolescence of products and services due to technological advancement and the
innovation of competitors. Companies in the communication sector may also be
affected by other competitive pressures, such as pricing competition, as well as
research and development costs, substantial capital requirements and government
regulation. Additionally, fluctuating domestic and international demand,
shifting demographics and often unpredictable changes in consumer tastes can
drastically affect a communication company’s profitability. While all companies
may be susceptible to network security breaches, certain companies in the
communication sector may be particular targets of hacking and potential theft of
proprietary or consumer information or disruptions in service, which could have
a material adverse effect on their businesses.
Concentration
Risk.
In following its methodology, the Index from time to time may be concentrated to
a significant degree in securities of issuers located in a single industry or
group of industries. To the extent that the Index concentrates in the securities
of issuers in a particular industry or group of industries, the Fund also may
concentrate its investments to approximately the same extent. By concentrating
its investments in an industry or group of industries, the Fund may face more
risks than if it were diversified broadly over numerous industries or groups of
industries. If the Index is not concentrated in a particular industry or group
of industries, the Fund will not concentrate in a particular industry or group
of industries.
Consumer
Discretionary Sector Risk. The
consumer discretionary sector includes, for example, automobile, textile and
retail companies. This sector can be significantly affected by, among other
things, changes in domestic and international economies, exchange and interest
rates, worldwide demand, supply chain constraints, competition, social trends,
and marketing campaigns. Success of companies in the consumer discretionary
sector also depends heavily on disposable household income and consumer
spending, which can be negatively impacted by inflationary pressures on
consumers. Companies in the consumer discretionary sector have historically been
characterized as relatively cyclical and therefore more volatile in times of
change.
Depositary
Receipt Risk.
The Fund’s investments in foreign companies may be in the form of depositary
receipts, including ADRs, EDRs, and GDRs. ADRs, EDRs, and GDRs are generally
subject to the risks of investing directly in foreign securities and, in some
cases, there may be less information available about the underlying issuers than
would be the case with a direct investment in the foreign issuer. ADRs are U.S.
dollar-denominated receipts representing shares of foreign-based corporations.
GDRs are similar to ADRs but are shares of foreign-based corporations generally
issued by international banks in one or more markets around the world.
Investment in ADRs and GDRs may be more or less liquid than the underlying
shares in their primary trading market and GDRs may be more volatile. Depositary
receipts may be “sponsored” or “unsponsored” and may be unregistered and
unlisted. Sponsored depositary receipts are established
jointly
by a depositary and the underlying issuer, whereas unsponsored depositary
receipts may be established by a depositary without participation by the
underlying issuer. Holders of an unsponsored depositary receipt generally bear
all the costs associated with establishing the unsponsored depositary receipt.
In addition, the issuers of the securities underlying unsponsored depositary
receipts are not obligated to disclose material information in the United States
and, therefore, there may be less information available regarding those issuers
and there may not be a correlation between that information and the market value
of the depositary receipts. In general, ADRs must be sponsored, but the Fund may
invest in unsponsored ADRs under various limited circumstances. It is expected
that not more than 10% of the net assets of the Fund will be invested in
unsponsored ADRs. The Fund’s investments may also include ADRs and GDRs that are
not purchased in the public markets and are restricted securities that can be
offered and sold only to “qualified institutional buyers” under Rule 144A
of the Securities Act of 1933, as amended (the “Securities Act”). The Adviser
will determine the liquidity of these investments pursuant to guidelines
established by the Board. If a particular investment in ADRs or GDRs is deemed
illiquid, that investment will be included within the Fund’s limitation on
investment in illiquid securities. Moreover, if adverse market conditions were
to develop during the period between the Fund’s decision to sell these types of
ADRs or GDRs and the point at which the Fund is permitted or able to sell the
security, the Fund might obtain a price less favorable than the price that
prevailed when it decided to sell.
Dividend-Paying
Common Equity Security Risk.
The Fund will normally receive income from dividends that are paid by issuers of
the Fund’s investments. The amount of the dividend payments may vary and depends
on performance and decisions of the issuer. Poor performance by the issuer or
other factors may cause the issuer to lower or eliminate dividend payments to
investors, including the Fund. Additionally, these types of securities may fall
out of favor with investors and underperform the broader market. Depending upon
market conditions, dividend-paying securities that meet the Fund’s investment
criteria may not be widely available or may be highly concentrated in only a few
market sectors.
Emerging
Markets Risk. Investments
in securities and instruments traded in developing or emerging markets, or that
provide exposure to those securities or markets, can involve additional risks
relating to political, economic, or regulatory conditions not associated with
investments in U.S. securities and instruments. For example, developing and
emerging markets may be subject to (i) greater market volatility, (ii) lower
trading volume and liquidity, (iii) greater social, political and economic
uncertainty, (iv) governmental controls on foreign investments and limitations
on repatriation of invested capital, (v) lower disclosure, corporate governance,
auditing and financial reporting standards, (vi) fewer protections of property
rights, (vii) restrictions on the transfer of securities or currency, and (viii)
settlement and trading practices that differ from those in U.S. markets. Each of
these factors may impact the ability of the Fund to buy, sell or otherwise
transfer securities, adversely affect the trading market and price for Shares
and cause the Fund to decline in value.
Specifically
with respect to index funds, the conditions in emerging markets may lead to
potential errors in index data, index computation, and/or index construction if
information on non-U.S. companies is unreliable or outdated, or if less
information about the non-U.S. companies is publicly available due to
differences in regulatory, accounting, auditing and financial recordkeeping
standards. This, in turn, may limit the fund adviser’s ability to oversee the
index provider’s due diligence process over index data prior to its use in index
computation, construction, and/or rebalancing. All of these factors may
adversely impact fund performance. In addition, the rights and remedies
associated with investments in a fund that tracks an index comprised of foreign
securities may be different than a fund that tracks an index of domestic
securities.
Energy
Sector Risk. The
market value of securities in the energy sector may decline for many reasons
including, fluctuations in energy prices and supply and demand of energy fuels
caused by geopolitical events, the success of exploration projects, weather or
meteorological events, taxes, increased governmental or environmental
regulation, resource depletion, rising interest rates, declines in domestic or
foreign production, accidents or catastrophic events that result in injury, loss
of life or property, pollution or other environmental damage claims, terrorist
threats or attacks, among others. Markets for various energy-related commodities
can have significant volatility and are subject to control or manipulation by
large producers or purchasers. Companies in the energy sector may need to make
substantial expenditures, and may incur significant amounts of debt, to maintain
or expand their reserves through exploration of new sources of supply, through
the development of existing sources, through acquisitions, or through long-term
contracts to acquire reserves. Factors adversely affecting producers, refiners,
distributors, or others in the energy sector may adversely affect companies that
service or supply those entities, either because demand for those services or
products is curtailed, or those services or products come under price
pressure. Issuers in the energy sector may also be impacted by changing
investor and consumer preferences.
Equity
Investing Risk. An
investment in the Fund involves risks similar to those of investing in any fund
holding equity securities, such as market fluctuations, changes in interest
rates and perceived trends in stock prices. The values of equity securities
could decline generally or could underperform other investments. Different types
of equity securities tend to go through cycles of outperformance and
underperformance in comparison to the general securities markets. In addition,
securities may decline in value due to factors affecting a specific issuer,
market or securities markets generally. Recent turbulence in financial markets
and reduced liquidity in credit and fixed income markets may negatively affect
many issuers worldwide, which may have an adverse effect on the
Fund.
ETF
Risks.
•APs,
Market Makers, and Liquidity Providers Concentration Risk. The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, Shares may trade at a material discount to NAV and possibly face
delisting: (i) APs exit the business or otherwise become unable to process
creation and/or redemption orders and no other APs step forward to perform these
services, or (ii) market makers and/or liquidity providers exit the business or
significantly reduce their business activities and no other entities step
forward to perform their functions.
•Premium-Discount
Risk. The
Shares may trade above or below their NAV. The NAV of the Fund will generally
fluctuate with changes in the market value of the Fund’s holdings. The market
prices of Shares, however, will generally fluctuate in accordance with changes
in NAV as well as the relative supply of, and demand for, Shares on the Exchange
and other securities exchanges. The trading price of Shares may deviate
significantly from NAV during periods of market volatility or limited trading in
Shares. In addition, you may incur the cost of the “spread,” that is, any
difference between the bid price and the ask price of the Shares. The Adviser
cannot predict whether Shares will trade below, at or above their NAV. Price
differences may be due, in large part, to the fact that supply and demand forces
at work in the secondary trading market for Shares will be closely related to,
but not identical to, the same forces influencing the prices of the securities
held by the Fund. However, given that Shares can be purchased and redeemed in
large blocks of Shares, called Creation Units (unlike shares of closed-end
funds, which frequently trade at appreciable discounts from, and sometimes at
premiums to, their NAV), and the Fund’s portfolio holdings are fully disclosed
on a daily basis, the Adviser believes that large discounts or premiums to the
NAV of Shares should not be sustained, but that may not be the
case.
•Cost
of Trading Risk. Investors
buying or selling Shares in the secondary market will pay brokerage commissions
or other charges imposed by brokers as determined by that broker. Brokerage
commissions are often a fixed amount and may be a significant proportional cost
for investors seeking to buy or sell relatively small amounts of Shares. In
addition, secondary market investors will also incur the cost of the difference
between the price that an investor is willing to pay for Shares (the “bid”
price) and the price at which an investor is willing to sell Shares (the “ask”
price). This difference in bid and ask prices is often referred to as the
“spread” or “bid/ask spread.” The bid/ask spread varies over time for Shares
based on trading volume and market liquidity, and is generally lower if the
Fund’s Shares have more trading volume and market liquidity and higher if the
Fund’s Shares have little trading volume and market liquidity. Further,
increased market volatility may cause increased bid/ask spreads.
•Trading
Risk. Although
the Shares are listed on the Exchange, there can be no assurance that an active
or liquid trading market for them will develop or be maintained. In addition,
trading in Shares on the Exchange may be halted. In stressed market conditions,
the liquidity of the Fund’s Shares may begin to mirror the liquidity of its
underlying portfolio holdings, which can be significantly less liquid than the
Fund’s Shares, potentially causing the market price of the Fund’s Shares to
deviate from its NAV. The spread varies over time for Shares of the Fund based
on the Fund’s trading volume and market liquidity, and is generally lower if the
Fund has high trading volume and market liquidity, and higher if the Fund has
little trading volume and market liquidity (which is often the case for funds
that are newly launched or small in size).
Financials
Sector Risk. The
financials sector includes, for example, banks and financial institutions
providing mortgage and mortgage related services. This sector can be
significantly affected by, among other things, changes in interest rates,
government regulation, the rate of defaults on corporate, consumer and
government debt, the availability and cost of capital, and fallout from the
housing and sub-prime mortgage crisis. These factors and events have had, and
may
continue
to have, a significant negative impact on the valuations and stock prices of
companies in this sector and have increased the volatility of investments in
this sector.
Foreign
Investment Risk. The
Fund may invest in foreign securities, including non-U.S. dollar-denominated
securities traded outside of the United States and U.S. dollar-denominated
securities of foreign issuers traded in the United States. Returns on
investments in foreign securities could be more volatile than, or trail the
returns on, investments in U.S. securities. Investments in foreign securities,
including investments in American Depositary Receipts (ADRs), European
Depositary Receipts (EDRs) and Global Depositary Receipts (GDRs), are subject to
special risks, including the following:
•Foreign
Securities Risk.
Investments
in non-U.S. securities involve risks that may not be present with investments in
U.S. securities. For example, investments in non-U.S. securities may be subject
to risk of loss due to foreign currency fluctuations or to political or economic
instability. There may be less information publicly available about a non-U.S.
issuer than a U.S. issuer. Non-U.S. issuers may be subject to different
accounting, auditing, financial reporting and investor protection standards than
U.S. issuers. Changes to the financial condition or credit rating of foreign
issuers may also adversely affect the value of the Fund’s securities.
Investments in non-U.S. securities may be subject to withholding or other taxes
and may be subject to additional trading, settlement, custodial, and operational
risks. Because legal systems differ, there is also the possibility that it will
be difficult to obtain or enforce legal judgments in some countries. Since
foreign exchanges may be open on days when the Fund does not price its Shares,
the value of the securities in the Fund’s portfolio may change on days when
shareholders will not be able to purchase or sell the Fund’s Shares. Conversely,
Shares may trade on days when foreign exchanges are closed. Investment in
foreign securities may involve higher costs than investment in U.S. securities,
including higher transaction and custody costs as well as the imposition of
additional taxes by foreign governments. Each of these factors can make
investments in the Fund more volatile and potentially less liquid than other
types of investments.
•Capital
Controls Risk.
Economic conditions, such as volatile currency exchange rates and interest
rates, political events and other conditions may, without prior warning, lead to
government intervention and the imposition of “capital controls” or
expropriation or nationalization of assets. The possible establishment of
exchange controls or freezes on the convertibility of currency, or the adoption
of other governmental restrictions, might adversely affect an investment in
foreign securities. Capital controls include the prohibition of, or restrictions
on, the ability to transfer currency, securities or other assets within or out
of a jurisdiction. Levies may be placed on profits repatriated by foreign
entities (such as the Fund). Capital controls may impact the ability of the Fund
to buy, sell or otherwise transfer securities or currency, may adversely affect
the trading market and price for Shares of the Fund, and may cause the Fund to
decline in value.
•Currency
Risk.
The Fund’s NAV is determined on the basis of U.S. dollars; therefore, the Fund
may lose value if the local currency of a foreign market depreciates against the
U.S. dollar, even if the local currency value of the Fund’s holdings goes up.
Currency exchange rates may fluctuate significantly over short periods of time.
Currency exchange rates also can be affected unpredictably by intervention; by
failure to intervene by U.S. or foreign governments or central banks; or by
currency controls or political developments in the U.S. or abroad. Changes in
foreign currency exchange rates may affect the NAV of the Fund and the price of
the Fund’s Shares. Devaluation of a currency by a country’s government or
banking authority would have a significant impact on the value of any
investments denominated in that currency.
•Political
and Economic Risk.
The Fund is subject to foreign political and economic risk not associated with
U.S. investments, meaning that political events (civil unrest, national
elections, changes in political conditions and foreign relations, imposition of
exchange controls and repatriation restrictions), social and economic events
(labor strikes, rising inflation) and natural disasters occurring in a foreign
country could cause the Fund’s investments to experience gains or losses. The
Fund also could be unable to enforce its ownership rights or pursue legal
remedies in countries where it invests.
•Foreign
Market and Trading Risk.
The trading markets for many foreign securities are not as active as U.S.
markets and may have less governmental regulation and oversight. Foreign markets
also may have clearance and settlement procedures that make it difficult for the
Fund to buy and sell securities. The procedures and rules governing foreign
transactions and custody (holding of the Fund’s assets) also may involve delays
in payment, delivery or recovery of money or investments. These factors could
result in a loss to the Fund by causing the
Fund
to be unable to dispose of an investment or to miss an attractive investment
opportunity, or by causing Fund assets to be uninvested for some period of
time.
Geopolitical/Natural
Disaster Risks. The
value of your investment in the Fund is based on the values of the Fund’s
investments, which may change due to economic and other events that affect
markets generally, as well as those that affect particular
regions, countries, industries, companies or governments. These events may
be sudden and unexpected, and could adversely affect the liquidity of the
Fund’s investments, which may in turn impact valuation, the Fund’s ability to
sell securities and/or its ability to meet redemptions. The risks
associated with these developments may be magnified if certain social,
political, economic and other conditions and events (such as war, natural
disasters, epidemics and pandemics, terrorism, conflicts, social unrest,
recessions, inflation, rapid interest rate changes and supply chain
disruptions) adversely interrupt the global economy and financial
markets. It is difficult to predict when events affecting the U.S. or
global financial markets may occur, the effects that such events may
have and the duration of those effects (which may last for extended
periods). These events may negatively impact broad segments of businesses
and populations and have a significant and rapid negative impact on the
performance of the Fund’s investments, adversely affect and increase the
volatility of the Fund’s share price and exacerbate pre-existing risks to
the Fund.
Gold
and Precious Metals Risk.
The Fund will be sensitive to changes in the overall condition of the metals and
mining industry. Competitive pressures may have a significant effect on the
financial condition of companies in such industry. Also, such companies are
highly dependent on the price of certain precious metals. These prices may
fluctuate substantially over short periods of time, so the Fund’s share price
may be more volatile than other types of investments. The prices of precious
metals rise and fall in response to many factors, including: economic cycles;
changes in inflation or expectations about inflation in various countries;
interest rates; currency fluctuations; metal sales by governments, central
banks, or international agencies; investment speculation; resource availability;
fluctuations in industrial and commercial supply and demand; government
regulation of the metals and materials industries; and government prohibitions
or restrictions on the private ownership of certain precious and rare metals.
The Index measures, in part, the performance of equity securities of gold and
precious metals companies and does not measure the performance of direct
investment in precious metals. Consequently, the Fund’s share price may not move
in the same direction and to the same extent as the spot prices of precious
metals.
In
times of stable economic growth, traditional equity and debt investments could
offer greater appreciation potential, and the value of precious metals may be
adversely affected, which could in turn affect the Fund’s returns. The
production and sale of precious metals by governments, central banks, or other
large holders can be affected by various economic, financial, social, and
political factors, which may be unpredictable and may have a significant impact
on the supply and prices of precious metals. Economic and political conditions
in those countries that are the largest producers of precious metals may have a
direct effect on the production and marketing of such metals and on sales of
central bank holdings. Some precious metals mining operation companies may hedge
their exposure to falls in precious metals prices by selling forward future
production, which may result in lower returns during periods when the price of
precious metals increases. The precious metals industry can be significantly
affected by events relating to international political developments, the success
of exploration projects, commodity prices, and tax and government regulations.
If a natural disaster or other event with a significant economic impact occurs
in a region where the companies in which the Fund invests operate, such disaster
or event could negatively affect the profitability of such companies and, in
turn, the Fund’s investment in them.
Growth
Investing Risk. Stocks
of companies the Sub-Adviser believes are fast-growing may trade at a higher
multiple of current earnings than other stocks. If the Sub-Adviser’s assessment
of a company’s prospects for earnings growth, or how other investors will value
the company’s earnings growth, is incorrect, the price of the stock may fall or
may never reach the value the Sub-Adviser has placed on it. Growth stock prices
tend to fluctuate more dramatically than the overall stock market and growth
stocks may fall out of favor with investors for extended periods of
time.
Healthcare
Sector Risk. The
profitability of companies in the healthcare sector may be adversely affected by
the following factors, government regulations, including new regulations and
scrutiny related to data privacy, restrictions on government reimbursement for
medical expenses, rising costs of medical products and services, pricing
pressure, an increased emphasis on outpatient services, changes in the demand
for medical products and services, a limited number of products, industry
innovation, changes in technologies and other market developments. A number of
issuers in the healthcare sector have recently merged or otherwise experienced
consolidation. The effects of this trend toward consolidation are unknown and
may be far-reaching. Many healthcare companies are heavily dependent on patent
protection. The expiration of a company’s patents may adversely affect that
company’s profitability. Many healthcare
companies
are subject to extensive litigation based on product liability and similar
claims. Healthcare companies are subject to competitive forces that may make it
difficult to raise prices and, in fact, may result in price discounting. Many
new products in the healthcare sector may be subject to regulatory approvals.
The process of obtaining such approvals may be long and costly, and such efforts
ultimately may be unsuccessful. Companies in the healthcare sector may be thinly
capitalized and may be susceptible to product obsolescence. In addition, a
number of legislative proposals concerning healthcare have been considered by
the U.S. Congress in recent years. It is unclear what proposals will ultimately
be enacted, if any, and what effect they may have on companies in the healthcare
sector. Companies in the healthcare sector may be subject to adverse government
or regulatory actions, which may be costly.
Index
Calculation Risk. The
Index relies on various sources of information to assess the criteria of issuers
included in the Index, including fundamental information that may be based on
assumptions and estimates. Neither the Fund, the Adviser, the Sub-Adviser nor
the Index Provider can offer assurances that the Index’s calculation methodology
or sources of information will provide a correct valuation of securities, nor
can they guarantee the availability or timeliness of the production of the
Index.
Index
Rebalance Risk.
Because each Index generally only changes their respective exposures based on
data as of a quarter end, semi-annual period end or annually (each, a “Period
End”), (i) an Index’s exposure may be affected by significant market movements
at or near a Period End that are not predictive of the market’s performance for
the subsequent Period End and (ii) changes to the Index’s exposure may lag a
significant change in the market’s direction (up or down) by as long as the next
Period End if such changes first take effect at or near the beginning of a
Period End. Such lags between market performance and changes to the Index’s
exposure may result in significant underperformance relative to the broader
equity or fixed income market.
Industrials
Sector Risk. The
industrials sector includes, for example, aerospace and defense, non-residential
construction, engineering, machinery, transportation, and commercial and
professional services companies. This sector can be significantly affected by,
among other things, business cycle fluctuations, worldwide economic growth,
exchange rates, commodity prices, government and corporate spending, supply and
demand for specific products and manufacturing, rapid technological
developments, international political and economic developments, environmental
issues, and tax and governmental regulatory policies. As the demand for, or
prices of, industrials increase, the value of a Fund’s investments generally
would be expected to also increase. Conversely, declines in the demand for, or
prices of, industrials generally would be expected to contribute to declines in
the value of such securities. Such declines may occur quickly and without
warning and may negatively impact the value of a Fund and your
investment.
Investment
Risk. As
with all investments, an investment in the Fund is subject to investment risk.
Investors in the Fund could lose money, including the possible loss of the
entire principal amount of an investment, over short or long periods of
time.
Large-Capitalization
Companies Risk. Large-capitalization
companies may trail the returns of the overall stock market.
Large-capitalization stocks tend to go through cycles of doing better – or worse
– than the stock market in general. These periods have, in the past, lasted for
as long as several years. When large capitalization companies are out of favor,
these securities may lose value or may not appreciate in line with the overall
market.
Limited
Operating History Risk.
Each Fund is a recently organized investment company with a limited operating
history. As a result, prospective investors have a limited track record or
history on which to base their investment decision. There can be no assurance
that a Fund will grow to or maintain an economically viable size.
Mid-Capitalization
Companies Risk.
The securities of mid-capitalization companies may be more vulnerable to adverse
issuer, market, political, or economic developments than securities of
larger-capitalization companies. The securities of mid-capitalization companies
generally trade in lower volumes and are subject to greater and more
unpredictable price changes than larger capitalization stocks or the stock
market as a whole. Some mid-capitalization companies have limited product lines,
markets, and financial and managerial resources and tend to concentrate on fewer
geographical markets relative to larger capitalization companies.
Natural
Resources and Commodity-Related Industries Risk.
The Fund is subject to the risks associated with companies in the natural
resources and commodities-related industries. These industries can be
significantly affected by (and often rapidly affected by) changes in the supply
of, or demand for, various natural resources and commodities. Investments in
natural resources companies, which include companies engaged in energy (oil, gas
& consumable fuels), agriculture, and precious and industrial metals and
mining can be significantly affected by events relating to these
industries,
including international political and economic developments, embargoes, tariffs,
inflation, weather and natural disasters, livestock diseases, limits on
exploration, rapid changes in the supply and demand for natural resources and
other factors. The Fund’s investments may experience substantial price
fluctuations as a result of these factors, and may move independently of the
trends of other operating companies. Companies engaged in the sectors listed
above may be adversely affected by changes in government policies and
regulations, technological advances and/or obsolescence, environmental damage
claims, energy conservation efforts, the success of exploration projects,
limitations on the liquidity of certain natural resources and commodities and
competition from new market entrants. Changes in general economic conditions,
including commodity price volatility, changes in exchange rates, imposition of
import controls, rising interest rates, prices of raw materials and other
commodities, depletion of resources and labor relations, could adversely affect
the Fund’s investments.
New
Fund Risk. The
Fund is a recently organized management investment company with no operating
history. As a result, prospective investors have a limited track record or
history on which to base their investment decision. There can be no assurance
that the Fund will grow to or maintain an economically viable size.
Non-Diversification
Risk. A
Fund that is non-diversified may be more sensitive to economic, business,
political or other changes affecting individual issuers or investments than a
diversified fund, which may result in greater fluctuation in the value of a
Fund’s Shares and greater risk of loss.
Nuclear
Energy Sector Risk. The
Fund will be sensitive to, and its performance will depend to a greater extent
on, the overall condition of nuclear energy companies. The companies represented
in the Fund’s portfolio may face considerable risk as a result of, among other
risks, incidents and accidents, breaches of security, ill-intentioned acts or
terrorism, natural disasters (such as floods or earthquakes), equipment
malfunctions or mishandling in storage, handling, transportation, treatment or
conditioning of substances and nuclear materials. Such events could have serious
consequences, especially in case of radioactive contamination and irradiation of
the environment, for the general population, as well as a material, negative
impact on the Fund’s portfolio companies and thus the Fund’s financial
situation. In addition, the nuclear energy sector is subject to competitive risk
associated with the prices of other energy sources, such as natural gas and oil,
obsolescence of existing technology, short product cycles, falling prices and
profits, competition from new market entrants and general economic conditions.
The price of uranium may be affected by changes in inflation rates, interest
rates, monetary policy, economic conditions and political stability. In
addition, uranium mining companies may also be significantly affected by import
controls, energy conservation efforts, the success of energy exploration
projects, liability for environmental damage, depletion of resources, and
mandated expenditures for safety and pollution control devices. Consumers of
nuclear energy may have the ability to switch between nuclear energy and other
energy sources and, as a result, during periods when competing energy sources
are less expensive, the revenues of companies in the nuclear energy sector may
decline with a corresponding impact on earnings.
Nuclear
activity is also subject to particularly detailed and restrictive regulations,
with a scheme for the monitoring and periodic re-examination of operating
authorization, which primarily takes into account nuclear safety, environmental
and public health protection, and also national security considerations
(terrorist threats in particular). These regulations and any future regulations
may be subject to significant tightening by national and international
authorities. There are substantial differences among the regulatory practices
and policies of various jurisdictions, and any given regulatory agency may make
major shifts in policy from time to time. There is no assurance that regulatory
authorities will, in the future, grant rate increases or that such increases
will be adequate to permit the payment of dividends on common stocks issued by a
utility company. Additionally, existing and possible future regulatory
legislation may make it even more difficult for utilities to obtain adequate
relief. In addition, governmental authorities may from time-to-time review
existing policies and impose additional requirements governing the licensing,
construction and operation of nuclear power plants. This could result in
increased operating costs, which would have a negative impact on the Fund’s
portfolio companies and may cause operating businesses related to nuclear energy
to become unprofitable or impractical to operate.
Uranium
prices are subject to fluctuation. The price of uranium has been and will
continue to be affected by numerous factors beyond the Fund’s control. Such
factors include the demand for nuclear power, political and economic conditions
in uranium producing and consuming countries, uranium supply from secondary
sources and uranium production levels and costs of production. In addition, the
prices of crude oil, natural gas and electricity produced from traditional hydro
power and possibly other undiscovered energy sources could potentially have a
negative impact on the competitiveness of nuclear energy companies in which the
Fund invests.
Securities
of the companies involved in this industry have been significantly more volatile
than securities of companies operating in other more established industries.
Certain valuation methods currently used to value companies involved in the
nuclear power and power technology sectors, particularly those companies that
have not yet traded profitably, have not been in widespread use for a
significant period of time. As a result, the use of these valuation methods may
serve to increase further the volatility of certain alternative power and power
technology company share prices.
Oil
and Gas Sector Risk. The
profitability of companies in the oil and gas sector is related to worldwide
energy prices, exploration costs, and production spending. Companies in the oil
and gas sector may be at risk for environmental damage claims and other types of
litigation, as well as negative publicity and perception. Companies in the oil
and gas sector may be adversely affected by natural disasters or other
catastrophes, changes in exchange rates, interest rates, changes in prices for
competitive energy services, economic conditions, tax treatment, government
regulation and intervention, and unfavorable events in the regions where
companies operate (e.g., expropriation, nationalization, confiscation of assets
and property or imposition of restrictions on foreign investments and
repatriation of capital, military coups, social unrest, violence or labor
unrest). As a result, the value of these companies may fluctuate widely.
Companies in the oil and gas sector may have significant capital investments in,
or engage in transactions involving, emerging market countries, which may
heighten these risks. Any of these factors could result in a material adverse
impact on the Fund’s securities and the performance of the Fund.
Passive
Investment Risk. The
Fund invests in the securities included in, or representative of, it’s Index
regardless of their investment merit. The Fund does not attempt to outperform
its respective Index or take defensive positions in declining markets. As a
result, the Fund’s performance may be adversely affected by a general decline in
the market segments relating to its Index. The returns from the types of
securities in which the Fund invests may underperform returns from the various
general securities markets or different asset classes. The Fund is not actively
managed, and the Sub-Adviser will not sell any investments due to current or
projected underperformance of the securities, industries or sector in which it
invests, unless that investment is removed from the Index, sold in connection
with a rebalancing of the Index as addressed in the Index methodology, or sold
to comply with a Fund’s investment limitations (for example, to maintain the
Fund’s tax status). The Fund will maintain investments until changes to its
Index are triggered, which could cause the Fund’s return to be lower than if the
Fund employed an active strategy.
REIT
Risk.
Investments in REITs involve unique risks. REITs may have limited financial
resources, may trade less frequently and in limited volume, and may be more
volatile than other securities. In addition, to the extent the Fund holds
interests in REITs, it is expected that investors in the Fund will bear two
layers of asset-based management fees and expenses (directly at the Fund level
and indirectly at the REIT level). The risks of investing in REITs include risks
associated with the direct ownership of real estate and the real estate industry
in general. These include risks related to general, regional and local economic
conditions; fluctuations in interest rates and property tax rates; shifts in
zoning laws, environmental regulations and other governmental action like the
exercise of eminent domain; cash flow dependency; increased operating expenses;
lack of availability of mortgage funds; losses due to natural disasters;
overbuilding; losses due to casualty or condemnation; changes in property values
and rental rates; and other factors. In addition to these risks,
residential/diversified REITs and commercial equity REITs may be affected by
changes in the value of the underlying property owned by the trusts, while
mortgage REITs may be affected by the quality of any credit extended. Further,
REITs are dependent upon management skills and generally may not be diversified.
REITs are also subject to heavy cash flow dependency, defaults by borrowers and
self-liquidation. In addition, REITs could possibly fail to qualify for the
beneficial tax treatment available to REITs under the Internal Revenue Code of
1986 (the “Code”), or to maintain their exemptions from registration under the
1940 Act. The Fund expects that dividends received from a REIT and distributed
to Fund shareholders generally will be taxable to the shareholder as ordinary
income. The above factors may also adversely affect a borrower’s or a lessee’s
ability to meet its obligations to the REIT. In the event of a default by a
borrower or lessee, the REIT may experience delays in enforcing its rights as a
mortgagee or lessor and may incur substantial costs associated with protecting
investments.
Sampling
Risk.
The Fund’s use of a representative sampling approach will result in it holding a
smaller number of securities than are in the Index. As a result, an adverse
development respecting a security held by the Fund could result in a greater
decline in NAV than would be the case if the Fund held all of the securities in
the Index. Conversely, a positive development relating to a security in an Index
that is not held by the Fund could cause the Fund to underperform its Index. To
the extent the assets in the Fund are smaller, these risks will be
greater.
Semiconductor
Sector Risk. The
semiconductor sector is highly cyclical and periodically experiences significant
economic downturns characterized by diminished product demand, resulting in
production overcapacity and excess inventory, which can result in rapid erosion
of product selling prices. The sector has experienced significant downturns,
often in connection with, or in anticipation of, maturing product cycles of both
semiconductor companies’ and their customers’ products and the decline in
general economic conditions.
Small-Capitalization
Companies Risk.
The securities of small-capitalization companies may be more vulnerable to
adverse issuer, market, political, or economic developments than securities of
large- or mid-capitalization companies. The securities of small-capitalization
companies generally trade in lower volumes and during adverse circumstances, may
be more difficult to sell and receive a sales price comparable to the value
assigned to the security by the Fund. These securities are subject to greater
and more unpredictable price changes than large- or mid-capitalization stocks or
the stock market as a whole. There is typically less publicly available
information concerning smaller-capitalization companies than for larger, more
established companies, which may make the valuation of such securities more
difficult if there isn’t a readily available market price.
Technology
Sector Risk. The
Fund will have exposure to companies operating in the technology sector.
Technology companies, including information technology companies, may have
limited product lines, financial resources and/or personnel. Technology
companies typically face intense competition and potentially rapid product
obsolescence. They are also heavily dependent on intellectual property rights
and may be adversely affected by the loss or impairment of those rights.
Companies in the technology sector also face increased government regulation,
including new regulations and scrutiny related to data privacy, and may be
subject to adverse government or regulatory actions, which may be
costly.
Tracking
Error Risk. As
with all index funds, the performance of the Fund and its Index may differ from
each other for a variety of reasons. For example, the Fund incurs operating
expenses and portfolio transaction costs not incurred by an Index. In addition,
the Fund may not be fully invested in the securities of its Index at all times
or may hold securities not included in the Index. As a result of legal
restrictions or limitations that apply to the Fund but not to the Index, the
Fund may have less relative short exposure than the Index during periods in
between the Index’s monthly hedging reconstitution. Such differences in short
exposure may cause the performance of the Fund and its Index to differ from each
other.
Value
Investing Risk.
Securities issued by companies that may be perceived as undervalued may be
appropriately valued. Value securities may fail to appreciate for long periods
of time or may never realize their full potential value. In addition, the Fund’s
ability to realize any benefits of investing in value securities may depend on
the Fund’s ability to stay invested until the market’s perception of such
securities change. Value securities have generally performed better than
non-value securities during periods of economic recovery (although there is no
assurance that they will continue to do so). Value securities may go in and out
of favor over time.
ADDITIONAL
INFORMATION
ABOUT
THE
INDEXES
FOR
STRIVE
1000 GROWTH
ETF, STRIVE
1000 VALUE
ETF, STRIVE
SMALL-CAP
ETF, STRIVE
1000 DIVIDEND
GROWTH
ETF, STRIVE
EMERGING
MARKETS
EX-CHINA
ETF AND
STRIVE
FAANG
2.0 ETF ONLY
The
Sub-Adviser has entered into a license agreement with the Index Provider
pursuant to which the Sub-Adviser pays a fee to use each Index and the marketing
names as licensed trademarks of Bloomberg (“Bloomberg”). The Index Provider has
also licensed the use of each Index to the Adviser and the Trust. Each Index is
compiled and calculated by Bloomberg.
No
entity that creates, compiles, sponsors or maintains an index is or will be an
affiliated person, as defined in Section 2(a)(3) of the 1940 Act, or an
affiliated person of an affiliated person, of the Trust, the Adviser, the
Sub-Adviser, the Distributor or a promoter of a Fund.
Neither
the Adviser, the Sub-Adviser, nor any of their respective affiliates have any
rights to influence the selection of the securities in an Index.
“Bloomberg®”
and the Bloomberg indices listed herein (the “Indices”) are service marks of
Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services
Limited (“BISL”), the administrator of the index (collectively, “Bloomberg”),
and have been licensed for use for certain purposes by the distributor hereof
(the “Licensee”).
The
financial products named herein (the “Products”) are not sponsored, endorsed,
sold or promoted by Bloomberg. Bloomberg does not make any representation or
warranty, express or implied, to the owners of or counterparties to the Products
or any member of the public regarding the advisability of investing in
securities or commodities generally or in the Product particularly. The only
relationship of Bloomberg to Licensee is the licensing of certain trademarks,
trade names and service marks and of the Indices, which are determined, composed
and calculated by BISL without regard to Licensee or the Products. Bloomberg has
no obligation to take the needs of Licensee or the owners of the Products into
consideration in determining, composing or calculating the Indices. Bloomberg is
not responsible for and has not participated in the determination of the timing,
price, or quantities of the Products to be issued. Bloomberg shall not have any
obligation or liability, including, without limitation, to customers of the
Products, in connection with the administration, marketing or trading of the
Products.
BLOOMBERG
DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE INDICES OR ANY
DATA RELATED THERETO AND SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS OR
INTERRUPTIONS THEREIN. BLOOMBERG DOES NOT MAKE ANY WARRANTY, EXPRESS OR IMPLIED,
AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE PRODUCT OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE INDICES OR ANY DATA RELATED THERETO.
BLOOMBERG DOES NOT MAKE ANY EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY
DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR USE WITH RESPECT TO THE INDICES OR ANY DATA RELATED THERETO. WITHOUT LIMITING
ANY OF THE FOREGOING, TO THE MAXIMUM EXTENT ALLOWED BY LAW, BLOOMBERG, ITS
LICENSORS, AND ITS AND THEIR RESPECTIVE EMPLOYEES, CONTRACTORS, AGENTS,
SUPPLIERS, AND VENDORS SHALL HAVE NO LIABILITY OR RESPONSIBILITY WHATSOEVER FOR
ANY INJURY OR DAMAGES—WHETHER DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL,
PUNITIVE OR OTHERWISE—ARISING IN CONNECTION WITH THE PRODUCT OR INDICES OR ANY
DATA OR VALUES RELATING THERETO—WHETHER ARISING FROM THEIR NEGLIGENCE OR
OTHERWISE, EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF.
FOR
STRIVE
500 ETF, STRIVE
U.S. ENERGY
ETF, AND
STRIVE
U.S. SEMICONDUCTOR
ETF ONLY
The
Sub-Adviser has entered into a license agreement with the Index Provider
pursuant to which the Sub-Adviser pays a fee to use each Index and the marketing
names as licensed trademarks of Solactive AG (“Solactive”). The Sub-Adviser has
licensed the use of the Indices to the Adviser and the Adviser is sub-licensing
the rights to such Indices to each Fund. The Index is compiled and calculated by
Solactive.
Solactive
AG (“Solactive”) is the licensor of Solactive United States Semiconductors 30
Capped Index, the Solactive United States Technology Regulated Capped Index, the
Solactive GBS United States 500 Index and the Solactive United States Energy
Regulated Capped Index (each, an “Index”). The financial instruments that are
based on each Index are not sponsored, endorsed, promoted or sold by Solactive
in any way and Solactive makes no express or implied
representation,
guarantee or assurance with regard to: (a) the advisability in investing in the
financial instruments; (b) the quality, accuracy and/or completeness of the
Index; and/or (c) the results obtained or to be obtained by any person or entity
from the use of each Index. Solactive does not guarantee the accuracy and/or the
completeness of each Index and shall not have any liability for any errors or
omissions with respect thereto. Notwithstanding Solactive’s obligations to its
licensees, Solactive reserves the right to change the methods of calculation or
publication with respect to each Index and Solactive shall not be liable for any
miscalculation of or any incorrect, delayed or interrupted publication with
respect to each Index. Solactive shall not be liable for any damages, including,
without limitation, any loss of profits or business, or any special, incidental,
punitive, indirect or consequential damages suffered or incurred as a result of
the use (or inability to use) of an Index.
No
entity that creates, compiles, sponsors or maintains an Index is or will be an
affiliated person, as defined in Section 2(a)(3) of the 1940 Act, or an
affiliated person of an affiliated person, of the Trust, the Adviser, the
Sub-Adviser, the Distributor or a promoter of the Funds.
Neither
the Adviser, the Sub-Adviser, nor any of their respective affiliates have any
rights to influence the selection of the securities in any Index.
FUND
MANAGEMENT
Investment
Adviser
Empowered
Funds, LLC dba EA Advisers acts as each Fund’s investment adviser (the
“Adviser”). The Adviser selects each Fund’s sub-adviser and oversees the
sub-adviser’s management of the Funds. The Adviser also provides trading,
execution and various other administrative services and supervises the overall
daily affairs of the Funds. The Adviser is located at 19 East Eagle Road,
Havertown, PA 19083 and is wholly-owned by Alpha Architect LLC. The Adviser is
registered with the Securities and Exchange Commission (“SEC”) under the
Investment Advisers Act of 1940, as amended (the “Advisers Act”) and provides
investment advisory services solely to the Fund and other exchange-traded funds.
The Adviser was founded in October 2013.
The
Adviser provides trading, execution and various other administrative services
and supervises the overall daily affairs of the Fund, subject to the general
supervision and control of the Board. The Adviser performs its services to each
Fund pursuant to the terms of an investment advisory agreement (the “Advisory
Agreement”) between the EA Series Trust (the “Trust”) and the Adviser, each Fund
will pay the Adviser an annual advisory fee based on its average daily net
assets payable at the annual rates set forth in the table below:
|
|
|
|
|
|
Fund |
Advisory
Fee |
Strive
500 ETF |
0.0545% |
Strive
1000 Growth ETF |
0.18% |
Strive
1000 Value ETF |
0.18% |
Strive
Small-Cap ETF |
0.18% |
Strive
1000 Dividend Growth ETF |
0.35% |
Strive
Emerging Markets Ex-China ETF |
0.32% |
Strive
U.S. Energy ETF |
0.41% |
Strive
U.S. Semiconductor ETF |
0.40% |
Strive
FAANG 2.0 ETF |
0.49% |
The
Adviser (or an affiliate of the Adviser) bears all of the Adviser’s own costs
associated with providing these advisory services and all expenses of the Funds,
except for the fee payment under the Advisory Agreement, payments under each
Fund’s Rule 12b-1 Distribution and Service Plan (the “Plan”), brokerage
expenses, acquired fund fees and expenses, taxes, interest (including borrowing
costs), litigation expense (including class-action related services) and other
non-routine or extraordinary expenses.
Additionally, the Fund shall be responsible for its non-operating expenses (see
the italicized items in the preceding sentence) and fees and expenses associated
with the Fund’s securities lending program, if applicable.
The
Advisory Agreement for each Fund provides that it may be terminated at any time,
without the payment of any penalty, by the Board or by a majority of the
outstanding shares of the Fund, on 60 days’ written notice to the Adviser,
and
by the Adviser upon 60 days’ written notice, and that it shall be automatically
terminated if it is assigned. The Adviser retains the authority, pursuant to the
terms of the investment sub-advisory agreement, to exercise its right to control
the overall management of the Fund’s assets.
Investment
Sub-Adviser
The
Adviser has retained Strive Asset Management, LLC (the “Sub-Adviser”), an
investment adviser registered with the SEC under the Advisers Act, to provide
sub-advisory services to the Funds. The Sub-Adviser is organized as an Ohio
limited liability company with its principal offices located at 6555 Longshore
Street, Suite 220, Dublin, OH 43017. The Sub-Adviser was founded in 2022. As of
July 31, 2023, Strive had approximately $894 million in total assets under
management. The Sub-Adviser has discretionary responsibility to select each
Fund’s investments in accordance with each Fund’s investment objectives,
policies and restrictions. The Sub-Adviser is not responsible for selecting
broker-dealers or placing each Fund’s trades. Rather, the Sub-Adviser constructs
the overall portfolio and provides trading instructions to the Adviser, and, in
turn, the Adviser is responsible for selecting broker-dealers and placing each
Fund’s trades.
Pursuant
to a sub-advisory agreement (the “Sub-Advisory Agreement”), the Adviser pays the
Sub-Adviser a fee, which is calculated daily and paid monthly, at an annual rate
based on a Fund’s average daily net assets as follows:
|
|
|
|
|
|
Fund |
Sub-Advisory
Fee |
Strive
500 ETF |
0.0200% |
Strive
1000 Growth ETF |
0.10% |
Strive
1000 Value ETF |
0.10% |
Strive
Small-Cap ETF |
0.10% |
Strive
1000 Dividend Growth ETF |
0.18% |
Strive
Emerging Markets Ex-China ETF |
0.12% |
Strive
U.S. Energy ETF |
0.20% |
Strive
U.S. Semiconductor ETF |
0.20% |
Strive
FAANG 2.0 ETF |
0.25% |
Fund
Sponsor
The
Adviser has entered into a fund sponsorship agreement with the Sub-Adviser
pursuant to which the Sub-Adviser is also the sponsor of each Fund (“Fund
Sponsor”). Under this arrangement, the Fund Sponsor has agreed to provide
financial support to each Fund (as described below) and, in turn, the Adviser
has agreed to share with the Fund Sponsor a portion of profits, if any,
generated by each Fund’s Advisory Fee (also as described below). Every month,
the Advisory Fee, which is a unitary management fee, is calculated and paid to
the Adviser.
If
the amount of the unitary management fee exceeds a Fund’s operating expenses and
the Adviser-retained amount, the Adviser pays the net total to the Fund Sponsor.
The amount paid to the Fund Sponsor represents both the sub-advisory fee and any
remaining profits from the Advisory Fee. During months where there are no
profits or the funds are not sufficient to cover the entire sub-advisory fee,
the sub-advisory fee is automatically waived.
If
the amount of the unitary management fee is less than a Fund’s operating
expenses and the Adviser-retained amount, the Fund Sponsor is obligated to
reimburse the Adviser for the shortfall.
APPROVAL
OF
ADVISORY
AGREEMENTS
& INVESTMENT
SUB-ADVISORY
AGREEMENTS
A
discussion regarding the basis for the Board’s approval of the Advisory
Agreement and the Sub-Advisory Agreement for each Fund except the Strive FAANG
2.0 ETF is available in such Funds’ Semi-Annual
Report
to shareholders for the fiscal period ended January 31, 2023. A discussion
regarding the basis for the Board’s approval of the Advisory Agreement and the
Sub-Advisory Agreement for the Strive FAANG 2.0 ETF will be available in the
Fund’s Semi-Annual Report to shareholders for the fiscal period ending January
31, 2024.
PORTFOLIO
MANAGERS
Mr.
Matthew Cole and Mr. Jeffrey Sherman are co-Portfolio Managers and are primarily
responsible for the day-to-day management of each Fund.
Mr.
Cole has been with the Sub-Adviser since 2022, where he is the Chief Executive
Officer and Chief Investment Officer. Mr. Cole has advised on determining the
investment exposures of each Fund since each Fund’s respective inception. Prior
to Mr. Cole’s tenure with the Sub-Adviser, Mr. Cole was a Fixed Income Portfolio
Manager for a large U.S. pension fund from 2011 to 2022. Mr. Cole has a MBA in
Finance and a B.Sc in Finance and Risk Management & Insurance from
Sacramento State University. He is also a CFA®
Charterholder.
Mr.
Sherman joined the Sub-Adviser as a portfolio manager in 2023. Mr. Sherman has
advised on determining the investment exposures of each Fund since June 2023
(except for Strive FAANG 2.0 ETF, which Mr. Sherman has served as portfolio
manager for since the Fund’s inception). Prior to Mr. Sherman’s tenure with the
Sub-Adviser, Mr. Sherman was a Quantitative Analyst for a large insurance
company and built multi-asset model portfolios for an investment advisory
platform from 2020 to 2022. Additionally, Mr. Sherman worked as an Investment
Officer in the Public Equities department of a large U.S. pension fund from 2017
to 2020. Mr. Sherman holds a master’s degree in Quantitative Finance & Risk
Analytics from Rensselaer Polytechnic Institute and a bachelor’s degree in
Mathematics from the University at Albany, State University of New
York.
The
Funds’ SAI provides additional information about the portfolio managers,
including other accounts managed, ownership in the Funds, and
compensation.
OTHER
SERVICE
PROVIDERS
Quasar
Distributors, LLC (“Distributor”) serves as the distributor of Creation Units
(defined above) for the Funds on an agency basis. The Distributor does not
maintain a secondary market in Shares.
U.S.
Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services, is
the administrator, fund accountant and transfer agent for the
Funds.
U.S.
Bank National Association is the custodian for the Funds.
Practus,
LLP, 11300 Tomahawk Creek Parkway, Suite 310, Leawood, Kansas 66211, serves as
legal counsel to the Trust.
Tait,
Weller & Baker, LLP, 50 South 16th
Street, Suite 2900, Philadelphia, PA 19102, serves as the Funds’ independent
registered public accounting firm. The independent registered public accounting
firm is responsible for auditing the annual financial statements of the
Funds.
THE
EXCHANGE
Shares
of the Funds are not sponsored, endorsed, or promoted by its respective
Exchange, as listed below. The Exchange is not responsible for, nor has it
participated, in the determination of the timing of, prices of, or quantities of
Shares of a Fund to be issued, nor in the determination or calculation of the
equation by which the Shares are redeemable. The Exchange has no obligation or
liability to owners of the Shares of the Funds in connection with the
administration, marketing or trading of the Shares of the Funds. Without
limiting any of the foregoing, in no event shall the Exchange have any liability
for any direct, indirect, special, punitive, consequential or any other damages
(including lost profits) even if notified of the possibility of such
damages.
BUYING
AND
SELLING
FUND
SHARES
Shares
will be issued or redeemed by each Fund at NAV per Share only in Creation Units
as follows:
|
|
|
|
|
|
|
|
|
Fund |
Creation
Units |
Exchange |
Strive
500 ETF |
10,000 |
NYSE
Arca, Inc. |
Strive
1000 Growth ETF |
10,000 |
The
NASDAQ Stock Market, LLC |
Strive
1000 Value ETF |
10,000 |
The
NASDAQ Stock Market, LLC |
Strive
Small-Cap ETF |
10,000 |
The
NASDAQ Stock Market, LLC |
Strive
1000 Dividend Growth ETF |
10,000 |
The
NASDAQ Stock Market, LLC |
Strive
Emerging Markets Ex-China ETF |
100,000 |
NYSE
Arca, Inc. |
Strive
U.S. Energy ETF |
10,000 |
NYSE
Arca, Inc. |
Strive
U.S. Semiconductor ETF |
10,000 |
NYSE
Arca, Inc. |
Strive
FAANG 2.0 ETF |
10,000 |
NYSE
Arca, Inc. |
Shares
will trade on the secondary market, however, which is where most retail
investors will buy and sell Shares. It is expected that only a limited number of
institutional investors, called Authorized Participants or “APs,” will purchase
and redeem Shares directly from the Funds. APs may acquire Shares directly from
the Funds, and APs may tender their Shares for redemption directly to the Funds,
at NAV per Share only in large blocks, or Creation Units. Purchases and
redemptions directly with the Funds must follow the Funds’ procedures, which are
described in the SAI.
Except
when aggregated in Creation Units, Shares are not redeemable with the
Funds.
BUYING
AND
SELLING
SHARES
ON
THE
SECONDARY
MARKET
Most
investors will buy and sell Shares in secondary market transactions through
brokers and, therefore, must have a brokerage account to buy and sell Shares.
Shares can be bought or sold through your broker throughout the trading day like
shares of any publicly traded issuer. The Trust does not impose any redemption
fees or restrictions on redemptions of Shares in the secondary market. When
buying or selling Shares through a broker, you will incur customary brokerage
commissions and charges, and you may pay some or all of the spread between the
bid and the offered prices in the secondary market for Shares. The price at
which you buy or sell Shares (i.e.,
the market price) may be more or less than the NAV of the Shares. Unless imposed
by your broker, there is no minimum dollar amount you must invest in a Fund and
no minimum number of Shares you must buy.
Shares
of each Fund are listed on the Exchange under the following symbol:
|
|
|
|
|
|
Fund |
Trading
Symbol |
Strive
500 ETF |
STRV |
Strive
1000 Growth ETF |
STXG |
Strive
1000 Value ETF |
STXV |
Strive
Small-Cap ETF |
STXK |
Strive
1000 Dividend Growth ETF |
STXD |
Strive
Emerging Markets Ex-China ETF |
STXE |
Strive
U.S. Energy ETF |
DRLL |
Strive
U.S. Semiconductor ETF |
SHOC |
Strive
FAANG 2.0 ETF |
FWTO |
The
Exchange is generally open Monday through Friday and is closed for weekends and
the following holidays: New Year’s Day, Martin Luther King, Jr. Day,
Washington’s Birthday, Good Friday, Memorial Day, Juneteenth Independence Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
For
information about buying and selling Shares on the Exchange or in the secondary
markets, please contact your broker or dealer.
Book
Entry. Shares
are held in book entry form, which means that no stock certificates are issued.
The Depository Trust Company (“DTC”), or its nominee, will be the registered
owner of all outstanding Shares of the Funds and is recognized as the owner of
all Shares. Participants in DTC include securities brokers and dealers, banks,
trust companies, clearing corporations and other institutions that directly or
indirectly maintain a custodial relationship with DTC. As a beneficial owner of
Shares, you are not entitled to receive physical delivery of stock certificates
or to have Shares registered in your name, and you are not considered a
registered owner of Shares. Therefore, to exercise any right as an owner of
Shares, you must rely on the procedures of DTC and its participants. These
procedures are the same as those that apply to any stocks that you hold in book
entry or “street name” through your brokerage account. Your account information
will be maintained by your broker, which will provide you with account
statements, confirmations of your purchases and sales of Shares, and tax
information.
Your
broker also will be responsible for distributing income dividends and capital
gain distributions and for ensuring that you receive shareholder reports and
other communications from each Fund.
Share
Trading Prices. The
trading prices of a Fund’s Shares may differ from the Fund’s daily NAV and can
be affected by market forces of supply and demand for a Fund’s Shares, the
prices of a Fund’s portfolio securities, economic conditions and other
factors.
The
Exchange through the facilities of the Consolidated Tape Association or another
market information provider intends to disseminate the approximate value of a
Fund’s portfolio every fifteen seconds during regular U.S. trading hours. This
approximate value should not be viewed as a “real-time” update of the NAV of a
Fund because the approximate value may not be calculated in the same manner as
the NAV, which is computed once a day. The quotations for certain investments
may not be updated during U.S. trading hours if such holdings do not trade in
the U.S., except such quotations may be updated to reflect currency
fluctuations. The Funds are not involved in, or responsible for, the calculation
or dissemination of the approximate values and make no warranty as to the
accuracy of these values.
Continuous
Offering. The
method by which Creation Units of Shares are created and traded may raise
certain issues under applicable securities laws. Because new Creation Units of
Shares are issued and sold by a Fund on an ongoing basis, a “distribution,” as
such term is used in the Securities Act of 1933 (the “Securities Act”), may
occur at any point. Broker-dealers and other persons are cautioned that some
activities on their part may, depending on the circumstances, result in their
being deemed participants in a distribution in a manner which could render them
statutory underwriters and subject them to the prospectus delivery requirements
and liability provisions of the Securities Act. For example, a broker-dealer
firm or its client may be deemed a statutory underwriter if it takes Creation
Units after placing an order with the Distributor, breaks them down into
constituent Shares and sells the Shares directly to customers or if it chooses
to couple the creation of a supply of new Shares with an active selling effort
involving solicitation of secondary market demand for Shares. A determination of
whether one is an underwriter for purposes of the Securities Act must take into
account all the facts and circumstances pertaining to the activities of the
broker-dealer or its client in the particular case, and the examples mentioned
above should not be considered a complete description of all the activities that
could lead to a characterization as an underwriter.
Broker-dealer
firms should also note that dealers who are not “underwriters” but are effecting
transactions in Shares, whether or not participating in the distribution of
Shares, are generally required to deliver a prospectus. This is because the
prospectus delivery exemption in Section 4(a)(3) of the Securities Act is
not available in respect of such transactions as a result of Section 24(d)
of the Investment Company Act of 1940, as amended (the “Investment Company
Act”). As a result, broker-dealer firms should note that dealers who are not
“underwriters” but are participating in a distribution (as contrasted with
engaging in ordinary secondary market transactions) and thus dealing with the
Shares that are part of an overallotment within the meaning of
Section 4(a)(3)(C) of the Securities Act, will be unable to take advantage
of the prospectus delivery exemption provided by Section 4(a)(3) of the
Securities Act. For delivery of prospectuses to exchange members, the prospectus
delivery mechanism of Rule 153 under the Securities Act is only available
with respect to transactions on a national exchange.
ACTIVE
INVESTORS
AND
MARKET
TIMING
The
Board has evaluated the risks of market timing activities by the Funds’
shareholders. The Board noted that the Funds’ Shares can be purchased and
redeemed directly from a Fund only in Creation Units by APs and that the vast
majority of trading in the Funds’ Shares occurs on the secondary market. Because
the secondary market trades do not directly involve the Funds, it is unlikely
those trades would cause the harmful effects of market timing, including
dilution,
disruption of portfolio management, increases in the Funds’ trading costs and
the realization of capital gains. With regard to the purchase or redemption of
Creation Units directly with a Fund, to the extent effected in-kind (i.e., for
securities), the Board noted that those trades do not cause the harmful effects
(as previously noted) that may result from frequent cash trades. To the extent
trades are effected in whole or in part in cash, the Board noted that those
trades could result in dilution to a Fund and increased transaction costs, which
could negatively impact the Funds’ ability to achieve its investment objective,
although in certain circumstances (e.g., in conjunction with a rebalance of a
Fund’s underlying index), such trades may benefit Fund shareholders by
increasing the tax efficiency of a Fund. The Board also noted that direct
trading by APs is critical to ensuring that a Fund’s Shares trade at or close to
NAV. In addition, the Funds may impose transaction fees on purchases and
redemptions of Shares to cover the custodial and other costs incurred by a Fund
in effecting trades. Given this structure, the Board determined that it is not
necessary to adopt policies and procedures to detect and deter market timing of
the Funds’ Shares.
DISTRIBUTION
AND
SERVICE
PLAN
Each
Fund has adopted the Plan pursuant to Rule 12b-1 under the Investment
Company Act. Under the Plan, a Fund may be authorized to pay distribution fees
of up to 0.25% of its average daily net assets each year to the Distributor and
other firms that provide distribution and shareholder services (“Service
Providers”). As of the date of this Prospectus, the maximum amount payable under
the Plan is set at 0% until further action by the Board. In the event 12b-1 fees
are charged, over time they would increase the cost of an investment in a Fund
because they would be paid on an ongoing basis.
Payments
to Certain Employee Benefit Plan Financial Intermediaries.
The Sub-Adviser may provide compensation to certain employee benefit plan
financial intermediaries with respect to the Funds. These payments may be made,
at the discretion of the Sub-Adviser, for shareholder recordkeeping or other
administrative services provided to eligible defined contribution employee
benefit plans holding a Fund’s Shares, either directly or indirectly. The level
of payments made to such a qualifying employee benefit plan Financial
Intermediary in any given year may vary depending on the market value of a
Fund’s Shares serviced by the Financial Intermediary. A number of factors will
be considered in determining whether compensation should be paid to a Financial
Intermediary, including the qualifying Financial Intermediary’s willingness to
enter into a recordkeeping agreement (or something equivalent) that calls for
recordkeeping, reporting, or other services to be provided, and the quality of
the relationship with the Fund. The Sub-Adviser will make these payments to help
defray the costs incurred by qualifying financial intermediaries in connection
with efforts to maintain employee benefit plan accounts for participants in a
cost-efficient manner; however, the Sub-Adviser does not audit the financial
intermediaries to verify the extent or nature of services provided. The
Sub-Adviser will, on a periodic basis, determine the advisability of continuing
these payments. These payments may be more or less than the payments received by
financial intermediaries with respect to other funds and may influence your
Financial Intermediary to make available a Fund over other funds. You should ask
your Financial Intermediary about these differing and divergent interests and
how it is compensated for administering your investment in a Fund’s
Shares.
NET
ASSET
VALUE
The
NAV of Shares is calculated each business day as of the close of regular trading
on the New York Stock Exchange (“NYSE”), generally 4:00 p.m., Eastern
time.
Each
Fund calculates its NAV per Share by:
•Taking
the current market value of its total assets,
•Subtracting
any liabilities, and
•Dividing
that amount by the total number of Shares owned by shareholders.
If
you buy or sell Shares on the secondary market, you will pay or receive the
market price, which may be higher or lower than NAV. Your transaction will be
priced at NAV only if you purchase or redeem your Shares in Creation
Units.
Because
securities listed on foreign exchanges may trade on weekends or other days when
a Fund does not price its Shares, the NAV of the Fund, to the extent it may hold
foreign securities, may change on days when shareholders will not be able to
purchase or sell Shares. In particular, where all or a portion of the Fund’s
underlying securities trade in a market that is closed when the market in which
the Fund’s shares are listed and trading in that market is open, there may be
changes between the last quote from its closed foreign market and the value of
such security during the Fund’s
domestic
trading day. In addition, please note that this in turn could lead to
differences between the market price of the Fund’s shares and the underlying
value of those shares.
Equity
securities that are traded on a national securities exchange, except those
listed on the NASDAQ Global Market®
(“NASDAQ”) are valued at the last reported sale price on the exchange on which
the security is principally traded. Securities traded on NASDAQ will be valued
at the NASDAQ Official Closing Price (“NOCP”). If, on a particular day, an
exchange-traded or NASDAQ security does not trade, then the most recent quoted
bid for exchange traded or the mean between the most recent quoted bid and ask
price for NASDAQ securities will be used. Equity securities that are not traded
on a listed exchange are generally valued at the last sale price in the
over-the-counter market. If a nonexchange traded security does not trade on a
particular day, then the mean between the last quoted closing bid and asked
price will be used.
The
value of assets denominated in foreign currencies is converted into U.S. dollars
using exchange rates deemed appropriate by the Fund.
Redeemable
securities issued by open-end investment companies are valued at the investment
company’s applicable net asset value, with the exception of exchange-traded
open-end investment companies which are priced as equity
securities.
If
a market price is not readily available or is deemed not to reflect market
value, the relevant Fund will determine the price of the security held by it
based on a determination of the security’s fair value pursuant to policies and
procedures approved by the Board.
To
the extent a Fund holds securities that may trade infrequently, fair valuation
may have the effect of reducing stale pricing arbitrage opportunities presented
by the pricing of Shares. However, when a Fund uses fair valuation to price
securities, it may value those securities higher or lower than another fund
would have priced the security. Also, the use of fair valuation may cause the
Shares’ NAV performance to diverge from the Shares’ market price and from the
performance of various benchmarks used to compare a Fund’s performance because
benchmarks generally do not use fair valuation techniques. Because of the
judgment involved in fair valuation decisions, there can be no assurance that
the value ascribed to a particular security is accurate.
FUND
WEBSITE
AND
DISCLOSURE
OF
PORTFOLIO
HOLDINGS
The
Sub-Adviser maintains a website for each Fund at www.strivefunds.com. Among
other things, the website includes this Prospectus and the SAI, the Funds’
holdings, the Funds’ last annual
and semi-annual
reports (when available). The website will show each Fund’s daily NAV per share,
market price, and premium or discount, each as of the prior business day. The
website will also show the extent and frequency of each Fund’s premiums and
discounts. Further, the website will include each Fund’s median bid-ask spread
over the most recent thirty calendar days.
Each
day a Fund is open for business, the Trust publicly disseminates each Fund’s
full portfolio holdings as of the close of the previous day through its website
at www.strivefunds.com. A description of the Trust’s policies and procedures
with respect to the disclosure of the Funds’ portfolio holdings is available in
the Funds’ SAI.
INVESTMENTS
BY
OTHER
INVESTMENT
COMPANIES
For
purposes of the Investment Company Act, Shares are issued by a registered
investment company and purchases of such Shares by registered investment
companies and companies relying on Section 3(c)(1) or 3(c)(7) of the
Investment Company Act are subject to the restrictions set forth in
Section 12(d)(1) of the Investment Company Act, except as permitted by
Rule 6c-11, Rule 12d1-4, or an exemptive order of the
SEC.
DIVIDENDS,
DISTRIBUTIONS,
AND
TAXES
As
with any investment, you should consider how your investment in Shares will be
taxed. The tax information in this Prospectus is provided as general
information. You should consult your own tax professional about the tax
consequences of an investment in Shares.
Unless
your investment in Shares is made through a tax-exempt entity or tax-deferred
retirement account, such as an IRA plan, you need to be aware of the possible
tax consequences when:
•Your
Fund makes distributions,
•You
sell your Shares listed on the Exchange, and
•You
purchase or redeem Creation Units.
Dividends
and Distributions
Dividends
and Distributions.
Each Fund has elected and intends to qualify each year as a regulated investment
company under the Internal Revenue Code of 1986, as amended. As a regulated
investment company, a Fund generally pays no federal income tax on the income
and gains it distributes to you. Each Fund expects to declare and to distribute
its net investment income, if any, to shareholders as dividends quarterly. Each
Fund will distribute net realized capital gains, if any, at least annually. A
Fund may distribute such income dividends and capital gains more frequently, if
necessary, in order to reduce or eliminate federal excise or income taxes on a
Fund. The amount of any distribution will vary, and there is no guarantee a Fund
will pay either an income dividend or a capital gains distribution.
Distributions may be reinvested automatically in additional whole Shares only if
the broker through whom you purchased Shares makes such option
available.
Avoid
“Buying a Dividend.”
At the time you purchase Shares of a Fund, the Fund’s NAV may reflect
undistributed income, undistributed capital gains, or net unrealized
appreciation in value of portfolio securities held by a Fund. For taxable
investors, a subsequent distribution to you of such amounts, although
constituting a return of your investment, would be taxable. Buying Shares of a
Fund just before it declares an income dividend or capital gains distribution is
sometimes known as “buying a dividend.”
Taxes
Tax
Considerations.
Each Fund expects, based on its investment objective and strategies, that its
distributions, if any, will be taxable as ordinary income, capital gain, or some
combination of both. This is true whether you reinvest your distributions in
additional Shares or receive them in cash. For federal income tax purposes, Fund
distributions of short-term capital gains are taxable to you as ordinary income.
Fund distributions of long-term capital gains are taxable to you as long-term
capital gain no matter how long you have owned your Shares. A portion of income
dividends reported by a Fund may be qualified dividend income eligible for
taxation by individual shareholders at long-term capital gain rates provided
certain holding period requirements are met.
Taxes
on Sales of Shares.
A sale or exchange of Shares is a taxable event and, accordingly, a capital gain
or loss will generally be recognized. Currently, any capital gain or loss
realized upon a sale of Shares generally is treated as long-term capital gain or
loss if the Shares have been held for more than one year and as short-term
capital gain or loss if the Shares have been held for one year or less. The
ability to deduct capital losses may be limited.
Medicare
Tax.
An additional 3.8% Medicare tax is imposed on certain net investment income
(including ordinary dividends and capital gain distributions received from a
Fund and net gains from redemptions or other taxable dispositions of Shares) of
U.S. individuals, estates and trusts to the extent that such person’s “modified
adjusted gross income” (in the case of an individual) or “adjusted gross income”
(in the case of an estate or trust) exceeds a threshold amount. This Medicare
tax, if applicable, is reported by you on, and paid with, your federal income
tax return.
Backup
Withholding.
By law, if you do not provide a Fund with your proper taxpayer identification
number and certain required certifications, you may be subject to backup
withholding on any distributions of income, capital gains or proceeds from the
sale of your Shares. A Fund also must withhold if the Internal Revenue Service
(“IRS”) instructs it to do so. When withholding is required, the amount will be
24% of any distributions or proceeds paid.
State
and Local Taxes.
Fund distributions and gains from the sale or exchange of your Shares generally
are subject to state and local taxes.
Taxes
on Purchase and Redemption of Creation Units.
An AP who exchanges equity securities for Creation Units generally will
recognize a gain or a loss. The gain or loss will be equal to the difference
between the market value of the Creation Units at the time of purchase and the
exchanger’s aggregate basis in the securities surrendered and the cash amount
paid. A person who exchanges Creation Units for equity securities generally will
recognize a gain or loss equal to the difference between the exchanger’s basis
in the Creation Units and the aggregate market value of the securities received
and the cash amount received. The IRS, however, may assert that a loss realized
upon an exchange of securities for Creation Units cannot be deducted currently
under the rules governing “wash sales,” or on the basis that there has been no
significant change in economic position. Persons exchanging securities should
consult their own tax advisor with respect to whether the wash sale rules apply
and when a loss might be deductible.
Under
current federal tax laws, any capital gain or loss realized upon redemption of
Creation Units is generally treated as long-term capital gain or loss if the
Shares have been held for more than one year and as a short-term capital gain or
loss if the Shares have been held for one year or less.
If
a Fund redeems Creation Units in cash, it may recognize more capital gains than
it will if it redeems Creation Units in-kind.
Foreign
Tax Credits.
If a Fund qualifies to pass through to you the tax benefits from foreign taxes
it pays on its investments, and elects to do so, then any foreign taxes it pays
on these investments may be passed through to you as a foreign tax
credit.
Non-U.S.
Investors.
Non-U.S. investors may be subject to U.S. withholding tax at a 30% or lower
treaty rate and U.S. estate tax and are subject to special U.S. tax
certification requirements to avoid backup withholding and claim any treaty
benefits. An exemption from U.S. withholding tax is provided for capital gain
dividends paid by a Fund from long-term capital gains, if any. The exemptions
from U.S. withholding for interest-related dividends paid by a Fund from its
qualified net interest income from U.S. sources and short-term capital gain
dividends have expired for taxable years of a Fund that begin on or after
January 1, 2014. It is unclear as of the date of this prospectus whether
Congress will reinstate the exemptions for interest-related and short-term
capital gain dividends or, if reinstated, whether such exemptions would have
retroactive effect. However, notwithstanding such exemptions from U.S.
withholding at the source, any such dividends and distributions of income and
capital gains will be subject to backup withholding at a rate of 24% if you fail
to properly certify that you are not a U.S. person.
Other
Reporting and Withholding Requirements.
Under the Foreign Account Tax Compliance Act (FATCA), a Fund will be required to
withhold a 30% tax on (a) income dividends paid by a Fund, and (b) certain
capital gain distributions and the proceeds arising from the sale of Shares paid
by a Fund, to certain foreign entities, referred to as foreign financial
institutions or non-financial foreign entities, that fail to comply (or be
deemed compliant) with extensive new reporting and withholding requirements
designed to inform the U.S. Department of the Treasury of U.S.-owned foreign
investment accounts. A Fund may disclose the information that it receives from
its shareholders to the IRS, non-U.S. taxing authorities or other parties as
necessary to comply with FATCA. Withholding also may be required if a foreign
entity that is a shareholder of a Fund fails to provide the Fund with
appropriate certifications or other documentation concerning its status under
FATCA.
Possible
Tax Law Changes.
At the time that this prospectus is being prepared, various administrative and
legislative changes to the federal tax laws are under consideration, but it is
not possible at this time to determine whether any of these changes will be made
or what the changes might entail.
This
discussion of “Dividends, Distributions and Taxes” is not intended or written to
be used as tax advice. Because everyone’s tax situation is unique, you should
consult your tax professional about federal, state, local or foreign tax
consequences before making an investment in a Fund.
The
financial highlights tables are intended to help you understand each Fund’s
financial performance for the period of such Fund’s operations. Certain
information reflects financial results for a single Share. The total returns in
the table represent the rate that an investor would have gained (or lost) on an
investment in a Fund (assuming reinvestment of all dividends and distributions).
This information has been derived from the financial statements audited by Tait,
Weller & Baker LLP, an independent registered public accounting firm, whose
report, along with the Funds’ financial statements, is included in the Funds’
Annual
Report,
which is available upon request.
(for
a share outstanding throughout each period indicated)
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Net
Asset Value, Beginning of Period |
|
Net
Investment Income (Loss)(1) |
|
Net
Realized and Unrealized Gain (Loss) on Investments |
|
Net
Increase in Net Asset Value Resulting from Operations |
|
Distributions
from Net Investment Income |
|
Total
Distributions |
|
Net
Asset Value, End of Period |
|
Total
Return(2) |
|
Net
Assets End of Period (000's) |
|
Net
Expenses(3) |
|
Net
Investment Income (Loss)(3) |
|
Portfolio
Turnover Rate (4)(6) |
Strive
U.S. Energy ETF |
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August
9, 2022(5)
to July 31, 2023 |
$25.12 |
|
0.84 |
|
4.20 |
|
5.04 |
|
(0.78) |
|
(0.78) |
|
$29.38 |
|
20.22% |
|
$360,203 |
|
0.41% |
|
3.04% |
|
6% |
Strive
500 ETF |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
15, 2022(5)
to July 31, 2023 |
$25.10 |
|
0.35 |
|
4.10 |
|
4.45 |
|
(0.26) |
|
(0.26) |
|
$29.29 |
|
17.85% |
|
$251,869 |
|
0.05% |
|
1.52% |
|
3% |
Strive
U.S. Semiconductor ETF |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October
6, 2022(5)
to July 31, 2023 |
$25.07 |
|
0.22 |
|
11.53 |
|
11.75 |
|
(0.19) |
|
(0.19) |
|
$36.63 |
|
47.03% |
|
$36,626 |
|
0.40% |
|
0.92% |
|
10% |
Strive
Emerging Markets Ex-China ETF |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January
31, 2023(5)
to July 31, 2023 |
$25.17 |
|
0.29 |
|
1.59 |
|
1.88 |
|
(0.08) |
|
(0.08) |
|
$26.97 |
|
7.49% |
|
$153,727 |
|
1.29% |
|
2.28% |
|
39% |
Strive
1000 Dividend Growth ETF |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November
10, 2022(5)
to July 31, 2023 |
$24.59 |
|
0.30 |
|
3.35 |
|
3.65 |
|
(0.22) |
|
(0.22) |
|
$28.02 |
|
14.90% |
|
$22,415 |
|
0.35% |
|
1.56% |
|
18% |
Strive
1000 Growth ETF |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November
10, 2022(5)
to July 31, 2023 |
$24.51 |
|
0.16 |
|
7.64 |
|
7.80 |
|
(0.11) |
|
(0.11) |
|
$32.20 |
|
31.88% |
|
$28,978 |
|
0.18% |
|
0.74% |
|
2% |
Strive
1000 Value ETF |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November
10, 2022(5)
to July 31, 2023 |
$24.45 |
|
0.47 |
|
1.72 |
|
2.19 |
|
(0.33) |
|
(0.33) |
|
$26.31 |
|
9.03% |
|
$17,101 |
|
0.18% |
|
2.62% |
|
4% |
Strive
Small-Cap ETF |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November
10, 2022(5)
to July 31, 2023 |
$24.32 |
|
0.25 |
|
3.67 |
|
3.92 |
|
(0.19) |
|
(0.19) |
|
$28.05 |
|
16.20% |
|
$23,840 |
|
0.18% |
|
1.34% |
|
20% |
(1) Net
investment income per share represents net investment income divided by the
daily average shares of beneficial interest outstanding throughout the
period.
(2) All
returns reflect reinvested dividends, if any, but do not reflect the impact of
taxes. Total return for a period of less than one year is not
annualized.
(3) For
periods of less than one year, these ratios are annualized.
(4) Portfolio
turnover is not annualized and is calculated without regard to short-term
securities having a maturity of less than one year.
(5) Commencement
of operations.
(6) Excludes
the impact of in-kind transactions.
ANNUAL/SEMI-ANNUAL
REPORTS
TO
SHAREHOLDERS
Additional
information about each Fund is available in its annual
and semi-annual
reports to shareholders (when available). In the annual report, you will find a
discussion of the market conditions and investment strategies that affected each
Fund’s performance.
STATEMENT
OF
ADDITIONAL
INFORMATION
The
SAI dated November 30, 2023 (as supplemented December 8, 2023),
which
contains more details about the Funds, is incorporated by reference in its
entirety into this Prospectus, which means that it is legally part of this
Prospectus.
To
receive a free copy of the latest annual or semi-annual report or the SAI, or to
request additional information about the Funds, please contact us as
follows:
|
|
|
|
|
|
Call: |
(215)
882-9983 |
|
|
Write: |
19
East Eagle Road Havertown, PA 19083 |
|
|
Visit: |
www.strivefunds.com |
PAPER
COPIES
Please
note that paper copies of the Funds’ shareholder reports will generally not be
sent, unless you specifically request paper copies of the Funds’ reports from
your financial intermediary, such as a broker-dealer or bank. Instead, the
reports will be made available on the Funds’ website, and you will be notified
by mail each time a report is posted and provided with a website link to access
the report.
You
may elect to receive all future Fund reports in paper free of charge. Please
contact your financial intermediary to inform them that you wish to continue
receiving paper copies of Fund shareholder reports and for details about whether
your election to receive reports in paper will apply to all funds held with your
financial intermediary.
INFORMATION
PROVIDED
BY
THE
SECURITIES
AND
EXCHANGE
COMMISSION
Information
about the Funds, including their reports and the SAI, has been filed with the
SEC. It can be reviewed on the EDGAR database on the SEC’s internet site
(http://www.sec.gov). You can also request copies of these materials, upon
payment of a duplicating fee, by electronic request at the SEC’s e-mail address
([email protected]) or by calling the SEC at (202) 551-8090.
Investment
Company Act File No. 811-22961.