Dated
March 2, 2023
The
information herein is not complete and may be changed. We may not sell these
securities until the registration statement filed with the Securities and
Exchange Commission is effective. This Prospectus is not an offer to sell these
securities and is not soliciting an offer to buy these securities in any
jurisdiction in which the offer or sale is not permitted.
Aptus
International Enhanced Yield ETF (IDUB)
(formerly,
International Drawdown Managed Equity ETF)
Listed
on the Cboe BZX Exchange, Inc.
PROSPECTUS
[
], 2023
The
U.S. Securities and Exchange Commission (“SEC”) has not approved or disapproved
of these securities or passed upon the accuracy or adequacy of this Prospectus.
Any representation to the contrary is a criminal offense.
TABLE
OF CONTENTS
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Aptus
International Enhanced Yield ETF |
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Investment
Objective |
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Fees
and Expenses of the Fund |
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Expense
Example |
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Portfolio
Turnover |
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Principal
Investment Strategy |
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Principal
Investment Risks |
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Performance |
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Portfolio
Management |
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Purchase
and Sale of Shares |
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Tax
Information |
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Financial
Intermediary Compensation |
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Additional
Information About the Fund |
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Investment
Objective |
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Principal
Investment Strategy |
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Principal
Investment Risks |
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Portfolio
Holdings Information |
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Portfolio
Management |
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Investment
Adviser |
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Portfolio
Managers |
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How
to Buy and Sell Shares |
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Book
Entry |
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Frequent
Purchases and Redemptions of Shares |
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Determination
of Net Asset Value (NAV) |
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Fair
Value Pricing |
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Investments
by Registered Investment Companies |
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Delivery
of Shareholder Documents — Householding |
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Dividends,
Distributions, and Taxes |
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Distribution |
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Premium/Discount
Information |
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Additional
Notices |
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Financial
Highlights |
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The
Aptus International Enhanced Yield ETF (the “Fund”) seeks capital appreciation
and current income.
The
following table describes the fees and expenses you may pay if you buy, hold,
and sell shares of the Fund (“Shares”). You
may pay other fees, such as brokerage commissions and other fees to financial
intermediaries, which are not reflected in the table and Example
below.
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Annual
Fund Operating Expenses (expenses that you pay each year as a
percentage of the value of your investment) |
Management
Fees1 |
0.39% |
Distribution
and/or Service (12b-1) Fees |
0.00% |
Other
Expenses |
0.00% |
Acquired
Fund Fees and Expenses |
0.04% |
Total
Annual Fund Operating Expenses |
0.43% |
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1
Restated
to reflect the Fund’s contractual management fee effective May 1, 2023.
This
Example is intended to help you compare the cost of investing in the Fund with
the cost of investing in other funds. The Example assumes that you invest
$10,000 in the Fund for the time periods indicated and then redeem all of your
Shares at the end of those periods. The Example also assumes that your
investment has a 5% return each year and that the Fund’s operating expenses
remain the same. Although your actual costs may be higher or lower, based on
these assumptions your costs would be:
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1 Year |
3
Years |
5
Years |
10
Years |
$44 |
$138 |
$241 |
$542 |
The
Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when 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 July 22, 2021 (commencement of operations) through
April 30, 2022, the Fund’s portfolio turnover rate was 2% of the average
value of its portfolio.
The
Fund is an actively managed exchange-traded fund (“ETF”) that seeks to achieve
its objective through a hybrid equity and equity-linked note (“ELN”) strategy.
The Fund invests primarily in a portfolio of other ETFs that invest in equity
securities of non-U.S. (international) companies in developed and emerging
markets throughout the world (the “Equity Strategy”), and invests the remainder
of its assets in equity-linked notes (“ELNs”) to generate income (the “ELN”
strategy).
The
Fund may also invest in depositary receipts representing individual equity
securities of non-U.S. companies of any size, although such depositary receipts
will generally comprise less than 20% of the Fund’s net assets.
Equity
Strategy
Through
its Equity Strategy, under normal circumstances, the Fund invests approximately
90% of its assets in other ETFs that invest in the equity securities of non-U.S.
companies. The Fund may also invest in common stocks and depositary receipts as
part of its Equity Strategy.
Aptus
Capital Advisors, LLC, the Fund’s investment adviser (“Aptus” or the “Adviser”),
generally expects to allocate approximately 40–80% of the Fund’s exposure to
developed markets and approximately 10–40% to emerging markets. Aptus
selects the ETFs in which the Fund invests based on a variety of
characteristics, including the particular geographic exposure provided by the
portfolio of securities held by the ETF, the cost to invest in and trade the
ETF’s shares, and the size of the ETF, among others. Aptus selects the
individual depositary receipts in which the Fund invests based on a company’s
fundamental and momentum characteristics to try to identify attractive
opportunities for growth.
ELN
Strategy
In
order to generate income, the Fund typically invests approximately 10% of its
net assets in ELNs. ELNs are investment products structured as notes that are
issued by counterparties, including banks, broker-dealers or their affiliates,
and designed to offer a return linked to the underlying instruments within the
ELN.
ELNs
in which the Fund invests are derivative instruments that are specially designed
to combine the economic characteristics of a non-U.S. equity ETF, non-U.S.
equity index, or individual non-U.S. equity securities (the “Underlying
Instruments”) and option spreads in a single note form. Option spreads consist
of (i) writing (selling) call options on the Underlying Instruments, while (ii)
simultaneously reinvesting a portion of such premium to buy call options on the
Underlying Instrument.
The
ELNs provide recurring cash flow to the Fund based on the premiums from the call
options the ELNs write and are an important source of the Fund’s return.
Generally, when purchasing an ELN, the Fund pays the counterparty the current
value of the ELN’s Underlying Instruments plus the cost to structure the ELN.
Upon the maturity of the note, the Fund generally receives the par value of the
note, plus interest, plus or minus a return based on the appreciation or
depreciation of the Underlying Instruments.
The
Fund invests in ELNs to enhance the Fund’s yield ( i.e.
,
for income generation from premiums on options sold and capital appreciation
potential). When the Fund invests in ELNs, the Fund receives cash but this
limits the Fund’s opportunity to profit from an increase in the market value of
the instrument because of the limits relating to the call options written within
the particular ELN.
The
ELNs in which the Fund invests generate interest, which is paid following the
maturity of the ELN. The ELNs in which the Fund invests are highly customizable,
individually negotiated, bilateral instruments that typically have a maturity
between one week and six months. The Fund caps its exposure to ELNs with a
single counterparty at 5% of the Fund’s assets. The ELNs in which the Fund
invests may not be sold to third parties. In order to redeem an ELN, the Adviser
would sell back the ELN to the issuing counterparty and unwind the components of
the ELN ( i.e.
,
the Underlying Instruments and the options spread).
In
selecting ELNs for the Fund, the Adviser considers the potential income the
Underlying Instruments will generate and the potential gains or losses that
could be experienced by the Underlying Instruments, as well as the liquidity of
the Underlying Instruments and the maturity of the ELN.
The
Fund is 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. Additionally, the Adviser may actively and
frequently purchase and sell securities for the Fund.
The
principal risks of investing in the Fund are summarized below. The principal
risks are presented in alphabetical order to facilitate finding particular risks
and comparing them with other funds. Each risk summarized below is considered a
“principal risk” of investing in the Fund, regardless of the order in which it
appears. As with any investment, there is a risk that you could lose all or a
portion of your investment in the Fund.
Some
or all of these risks may adversely affect the Fund’s net asset value per share
(“NAV”), trading price, yield, total return and/or ability to meet its
objectives. For more information about the risks of investing in the Fund, see
the section in the Fund’s Prospectus titled “Additional Information About the
Fund.”
•Capital
Controls and Sanctions Risk.
Economic conditions, such as volatile currency exchange rates and interest
rates, political events, military action and other conditions may, without prior
warning, lead to foreign government intervention (including intervention by the
U.S. government with respect to foreign governments, economic sectors, foreign
companies and related securities and interests) and the imposition of capital
controls and/or sanctions, which may also include retaliatory actions of one
government against another government, such as seizure of assets. Capital
controls and/or sanctions include the prohibition of, or restrictions on, the
ability to transfer currency, securities or other assets. Capital controls
and/or sanctions may also impact the ability of the Fund to buy, sell or
otherwise transfer securities or currency, negatively impact the value and/or
liquidity of such instruments, adversely affect the trading market and price for
Shares, and cause the Fund to decline in value.
•
Counterparty
Risk. Counterparty
risk includes the possibility that a party to a transaction involving the Fund
will fail to meet its obligations. This could cause the Fund to lose the benefit
of the transaction or prevent the Fund from selling or buying other securities
to implement its investment strategy.
•Currency
Exchange Rate Risk.
The Fund invests primarily in other ETFs that have exposure to securities
denominated in non-U.S. currencies or in securities that provide exposure to
such currencies. Changes in currency exchange rates and the relative value of
non-U.S. currencies will affect the value of the Fund’s investment and the value
of your Shares. Currency exchange rates can be very volatile and can change
quickly and unpredictably. As a result, the value of an investment in the Fund
may change quickly and without warning and you may lose money.
•Depositary
Receipt Risk.
Depositary
Receipts involve risks similar to those associated with investments in foreign
securities, such as changes in political or economic conditions of other
countries and changes in the exchange rates of foreign currencies. Depositary
Receipts listed on U.S. exchanges are issued by banks or trust companies and
entitle the holder to all dividends and capital gains that are paid out on the
underlying foreign shares (“Underlying Shares”). When the Fund invests in
Depositary Receipts as a substitute for an investment directly in the Underlying
Shares, the Fund is exposed to the risk that the Depositary Receipts may not
provide a return that corresponds precisely with that of the Underlying Shares.
•
ELNs
Risk. Investing
in ELNs may be more costly to a Fund than if the Fund had invested in the
Underlying Instruments directly. Investments in ELNs often have risks similar to
the Underlying Instruments, which include market risk, foreign securities risk,
and currency risk. The Underlying Instruments of the ELN involve the use of
options under the terms defined in the ELN itself. Due to the utilization of
options and depending on the terms of the ELN, the ELN may be sensitive to
leverage risk. That leverage risk is limited to the change in the value of the
ELN and its terms. Investments in ELNs allow for enhanced yield but are subject
to limited upside appreciation potential based on movements of a single
underlying reference asset, basket of stocks, or index of equity securities. The
Fund’s losses from investing in an ELN is limited to the principal amount that
the Fund invested in such ELN. In addition, since ELNs are in note form, ELNs
are also subject to certain debt securities risks, such as credit or
counterparty risk. Should the prices of the Underlying Instruments move in an
unexpected manner, a Fund may not achieve the anticipated benefits of an
investment in an ELN, and may realize losses, which could be significant and
could include the entire principal investment. Investments in ELNs are also
subject to liquidity risk, meaning that ELNs may be difficult to sell and value.
A lack of liquidity of an ELN may also cause the value of the ELN to decline. In
addition, ELNs may exhibit price behavior that does not correlate with the
Underlying Instruments. ELN investments are subject to the risk that issuers
and/or counterparties will fail to make payments when due or default completely.
Prices of these investments may be adversely affected if any of the issuers or
counterparties it is invested in are subject to an actual or perceived
deterioration in their credit quality. Unlike a direct investment in equity
securities, ELNs typically involve a term or expiration date, potentially
increasing the Fund’s turnover rate, transaction costs and tax liability.
•Emerging
Markets Risk.
Investments in securities and instruments traded in developing or emerging
markets, or that provide exposure to such securities or markets, can involve
additional risks relating to political, economic, or regulatory conditions not
associated with investments in U.S. securities and instruments or investments in
more developed international markets. Such conditions 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. Less
information may be available about companies in emerging markets than in
developed markets because such emerging markets companies may not be subject to
accounting, auditing, and financial reporting standards or to other regulatory
practices required by U.S. companies. Additionally, limitations on the
availability of financial and business information about companies in emerging
markets may affect the Index Provider’s ability to accurately determine the
companies that meet the Index’s criteria.
◦
Geopolitical
Risk. Some
countries and regions in which the Fund invests have experienced security
concerns, war or threats of war and aggression, terrorism, economic uncertainty,
natural and environmental disasters and/or systemic market dislocations that
have led, and in the future may lead, to increased short-term market volatility
and may have adverse long-term effects on the U.S. and world economies and
markets generally. Such geopolitical and other events may also disrupt
securities markets and, during such market disruptions, the Fund’s exposure to
the other risks described herein will likely increase. Each of the foregoing may
negatively impact the Fund’s investments.
•ETF
Risks.
The
Fund is an ETF, and, as a result of an ETF’s structure, it is exposed to the
following 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, 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.
•Costs
of Buying or Selling Shares.
Due to the costs of buying or selling Shares, including brokerage commissions
imposed by brokers and bid-ask spreads, frequent trading of Shares may
significantly reduce investment results and an investment in Shares may not be
advisable for investors who anticipate regularly making small investments.
•Shares
May Trade at Prices Other Than NAV. As
with all ETFs, Shares may be bought and sold in the secondary market at market
prices. Although it is expected that the market price of Shares will approximate
the Fund’s NAV, there may be times when the market price of Shares is more than
the NAV intra-day (premium) or less than the NAV intra-day (discount) due to
supply and demand of Shares or during periods of market volatility. This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for Shares in the secondary
market, in which case such premiums or discounts may be significant. Because the
Fund’s investments have exposure to securities that may trade on foreign
exchanges that are closed when the Fund’s primary listing exchange is open,
there are likely to be deviations between the current price of a security and
the security’s last quoted price from the closed foreign market. This may result
in premiums and discounts that are greater than those experienced by domestic
ETFs.
•Trading. Although
Shares are listed for trading on Cboe BZX Exchange, Inc. (the “Exchange”) and
may be traded on U.S. exchanges other than the Exchange, there can be no
assurance that Shares will trade with any volume, or at all, on any stock
exchange. In stressed market conditions, the liquidity of Shares may begin to
mirror the liquidity of the Fund’s underlying portfolio holdings, which can be
significantly less liquid than Shares, and this could lead to differences
between the market price of the Shares and the underlying value of those Shares.
•Foreign
Investment Risk.
Investments in non-U.S. securities involve certain 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. Investments in non-U.S. securities also
may be subject to withholding or other taxes and may be subject to additional
trading, settlement, custodial, and operational risks. These and other factors
can make investments in the Fund more volatile and potentially less liquid than
other types of investments. Companies in many foreign markets are not subject to
the same degree of regulatory requirements, accounting standards or auditor
oversight as companies in the U.S., and as a result, information about the
securities in which the Fund invests may be less reliable or complete. Foreign
markets often have less reliable securities valuations and greater risk
associated with the custody of securities than the U.S. There may be significant
obstacles to obtaining information necessary for investigations into or
litigation against companies and shareholders may have limited legal
remedies.
•
Geographic
Investment Risk.
To the extent the Fund invests a significant portion of its assets in the
securities of companies of a single country or region, it is more likely to be
impacted by events or conditions affecting that country or region.
•Limited
Operating History.
The 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.
•Management
Risk. The
Fund is actively managed and may not meet its investment objective based on the
Adviser’s success or failure to implement investment strategies for the Fund.
•
Market
Risk. The
trading prices of the securities held by the Fund, as well as the Underlying
Instruments of the ELNs, fluctuate in response to a variety of factors. These
factors include events impacting the entire market or specific market segments,
such as political, market and economic developments, as well as events that
impact specific issuers. The Fund’s NAV and market price, like security and
commodity prices generally, may fluctuate significantly in response to these and
other factors. Local, regional or global events such as war, including Russia’s
invasion of Ukraine, acts of terrorism, spread of infectious diseases or other
public health issues, recessions, rising inflation, or other events could have a
significant negative impact on the Fund and its investments. For example, the
global pandemic caused by COVID-19, a novel coronavirus, and the aggressive
responses taken by many governments, including closing borders, restricting
international and domestic travel, and the imposition of prolonged quarantines
or similar restrictions, has had negative impacts, and in many cases severe
impacts, on markets worldwide. The COVID-19 pandemic has caused prolonged
disruptions to the normal business operations of companies around the world and
the impact of such disruptions is hard to predict. Such events may affect
certain geographic regions, countries, sectors and industries more significantly
than others. Such events could adversely affect the prices and liquidity of the
Fund’s portfolio securities or other instruments and could result in disruptions
in the trading markets. As a result, an investor could lose money over short or
long periods of time.
•
Market
Capitalization Risk.
•
Large-Capitalization
Investing .
The securities of large-capitalization companies may be relatively mature
compared to smaller companies and therefore subject to slower growth during
times of economic expansion. Large-capitalization companies may also be unable
to respond quickly to new competitive challenges, such as changes in technology
and consumer tastes. The Fund’s performance may be adversely affected if
securities of large cap companies outperform the market as a whole because the
Fund invests in ELNs with short call option spreads on large cap equities.
Because ELNs generate income from premiums on options sold and are subject to
limited upside appreciation given their use of short call option spreads on
large cap equities, the outperformance of, or volatility related to, large cap
companies may adversely impact the ELN’s performance, which in turn may
adversely impact Fund performance.
•
Mid-Capitalization
Investing. The
securities of mid-capitalization companies may be more vulnerable to adverse
issuer, market, political, or economic developments than securities of
large-capitalization
companies,
but they may also be subject to slower growth than small-capitalization
companies during times of economic expansion. The securities of
mid-capitalization companies generally trade in lower volumes and are subject to
greater and more unpredictable price changes than large capitalization stocks or
the stock market as a whole, but they may also be nimbler and more responsive to
new challenges than large-capitalization companies. Some mid-capitalization
companies have limited product lines, markets, financial resources, and
management personnel and tend to concentrate on fewer geographical markets
relative to large-capitalization companies. The Fund’s performance may be
adversely affected if securities of mid cap companies outperform the market as a
whole because the Fund invests in ELNs with short call option spreads on mid cap
equities. Because ELNs generate income from premiums on options sold and are
subject to limited upside appreciation given their use of short call option
spreads on mid cap equities, the outperformance of, or volatility related to,
mid cap companies may adversely impact the ELN’s performance, which in turn may
adversely impact Fund performance.
•Non-Diversification
Risk. The
Fund is 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. As a result, the Fund may be more exposed to
the risks associated with and developments affecting an individual issuer or a
smaller number of issuers than a fund that invests more widely. This may
increase the Fund’s volatility and cause the performance of a relatively smaller
number of issuers to have a greater impact on the Fund’s
performance.
•
Options
Risk. The
Fund invests in ELNs that utilize call options. Purchasing and selling (writing)
options are speculative activities and entail greater than ordinary investment
risks. The use of options can lead to losses because of adverse movements in the
price or value of the reference asset, which may be magnified by certain
features of the options. Purchasing options involves the payment of premiums,
which may adversely affect the ELNs, and, consequently, the Fund’s performance.
Purchased options may expire worthless resulting in the ELN’s loss of the
premium it paid for the option. When selling an option, the ELN will receive a
premium; however, this premium may not be enough to offset a loss incurred by
the ELN if the price of the underlying asset is above the strike price by an
amount equal to or greater than the premium. In addition, to the extent a
written option that is part of an option spread strategy is exercised, the
corresponding option purchased by the ELN to mitigate losses as part of an
option spread strategy is not expected to offset all losses from the written
option.
•Other
Investment Companies Risk. The
risks of investing in other ETFs typically reflect the risks associated with the
investment strategies of the other ETFs and the types of instruments in which
the other ETFs invest. By investing in another ETF, the Fund becomes a
shareholder of that ETF and bears its proportionate share of the fees and
expenses of the other ETF. The Fund may be subject to statutory limits with
respect to the amount it can invest in other ETFs, which may adversely affect
the Fund’s ability to achieve its investment objective. Investments in ETFs are
also subject to the “ETF Risks” described above.
The
following performance information indicates some of the risks of investing in
the Fund. The bar chart shows the Fund’s performance for the calendar year ended
December 31. The table illustrates how the Fund’s average annual returns for the
1-year and since inception periods compared with those of a broad measure of
market performance. The Fund’s past performance, before and after taxes, does
not necessarily indicate how it will perform in the future. Updated performance
information is also available on the Fund’s website at www.aptusetfs.com.
Effective
[ ], 2023, the Fund no longer pursues a strategy by which the Fund purchases
and/or writes call or put options on broad-based, non-US equity indexes or ETFs
to limit downside risk, create equity exposure, and/or generate premiums from
writing call options; rather, the Fund pursues a hybrid equity and ELN strategy.
Consequently, performance for periods prior to [ ], 2023, does not reflect the
Fund’s current investment objective and principal investment strategy. The
Fund’s performance may have differed if the Fund’s current strategy had been in
place.
[Bar
Chart]
For
the year-to-date period ended March 31, 2023, the Fund’s total return was [ ]%.
During the period of time shown in the bar chart, the Fund’s highest quarterly
return was [ ]% for the quarter ended [ ], and the lowest quarterly return was [
]% for the quarter ended [ ].
Average
Annual Total Returns for the Period Ended December 31, 2022
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|
Aptus
International Enhanced Yield ETF |
1
Year |
Since
Inception
(July 22,
2021) |
Return
Before Taxes |
[
]% |
[
]% |
Return
After Taxes on Distributions |
[
]% |
[
]% |
Return
After Taxes on Distributions and Sale of Shares |
[
]% |
[
]% |
MSCI
AC World Index ex USA Net
(reflects
no deduction for fees, expenses, or taxes) |
[
]% |
[
]% |
After-tax
returns are calculated using the historical highest individual federal marginal
income tax rates during the period covered by the table above and do not reflect
the impact of state and local taxes. Actual after-tax returns depend on an
investor’s tax situation and may differ from those shown. After-tax returns
shown are not relevant to investors who hold their Shares through tax-deferred
arrangements such as an individual retirement account (“IRA”) or other
tax-advantaged accounts.
Portfolio
Management
Investment
Adviser
Aptus
Capital Advisors, LLC serves as investment adviser to the Fund.
Portfolio
Managers
Each
of the following individuals has been a portfolio manager of the Fund since its
inception in July 2021:
John
D. (“JD”) Gardner, Chief Investment Officer and Managing Member at the
Adviser
John
Luke Tyner, Portfolio Manager and Equity Analyst at the Adviser
David
Wagner III, CFA, Portfolio Manager and Analyst at the Adviser
Brad
Rapking, CFA, Portfolio Manager and Analyst at the Adviser
Mark
Callahan, Portfolio Manager and Head of Trading at the Adviser
Shares
are listed on the Exchange, and individual Shares may only be bought and sold in
the secondary market through brokers at market prices, rather than NAV. Because
Shares trade at market prices rather than NAV, Shares may trade at a price
greater than NAV (premium) or less than NAV (discount).
The
Fund issues and redeems Shares at NAV only in large blocks known as “Creation
Units,” which only APs (typically, broker-dealers) may purchase or redeem. The
Fund generally issues and redeems Creation Units in exchange for a portfolio of
securities and/or a designated amount of U.S. cash.
Investors
may incur costs attributable to the difference between the highest price a buyer
is willing to pay to purchase Shares (bid) and the lowest price a seller is
willing to accept for Shares (ask) when buying or selling Shares in the
secondary market (the “bid-ask spread”). Recent information about the Fund,
including its NAV, market price, premiums and discounts, and bid-ask spreads is
available on the Fund’s website at www.aptusetfs.com/idub/.
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an IRA
or other tax-advantaged account. Distributions on investments made through
tax-deferred arrangements may be taxed later upon withdrawal of assets from
those accounts.
If
you purchase Shares through a broker-dealer or other financial intermediary
(such as a bank) (an “Intermediary”), the Adviser or its affiliates may pay
Intermediaries for certain activities related to the Fund, including
participation in activities that are designed to make Intermediaries more
knowledgeable about exchange traded products, including the Fund, or for other
activities, such as marketing, educational training or other initiatives related
to the sale or promotion of Shares. These payments may create a conflict of
interest by influencing the Intermediary and your salesperson to recommend the
Fund over another investment. Any such arrangements do not result in increased
Fund expenses. Ask your salesperson or visit the Intermediary’s website for more
information.
The
Fund’s investment objective has been adopted as a non-fundamental investment
policy and may be changed without shareholder approval upon written notice to
shareholders.
Principal
Investment Strategy
The
ELNs in which the Fund invests are prepaid at the time they are assumed by the
Fund. There is no continuing payment obligation for the Fund.
The
Fund considers a country or region to be a developed or emerging market based on
the classifications systems used by the ETFs in which the Fund invests.
Temporary
Defensive Positions
To
respond to adverse market, economic, political, or other conditions, the Fund
may invest up to 100% of its assets in a temporary defensive manner by holding
all or a substantial portion of its assets in cash, cash equivalents, or other
high quality short-term investments. Examples of temporary defensive investments
include short-term U.S. government securities, commercial paper, bank
obligations, repurchase agreements, money market fund shares, and other money
market instruments. The Fund also may invest in these types of defensive
investments or hold cash while looking for suitable investment opportunities or
to maintain liquidity. In these circumstances, the Fund may be unable to achieve
its investment objective.
This
section provides additional information regarding the principal risks described
in the Fund Summary. As in the Fund Summary, the principal risks below are
presented in alphabetical order to facilitate finding particular risks and
comparing them with other funds. Each risk described below is considered a
“principal risk” of investing in the Fund, regardless of the order in which it
appears. Each of the factors below could have a negative impact on the Fund’s
performance and trading prices.
•Capital
Controls and Sanctions Risk.
Economic conditions, such as volatile currency exchange rates and interest
rates, political events, military action and other conditions may, without prior
warning, lead to foreign government intervention (including intervention by the
U.S. government with respect to foreign governments, economic sectors, foreign
companies and related securities and interests) and the imposition of capital
controls and/or sanctions, which may also include retaliatory actions of one
government against another government, such as seizure of assets. Capital
controls and/or sanctions include the prohibition of, or restrictions on, the
ability to transfer currency, securities or other assets. Capital controls
and/or sanctions may also impact the ability of the Fund to buy, sell or
otherwise transfer securities or currency, negatively impact the value and/or
liquidity of such instruments, adversely affect the trading market and price for
Shares, and cause the Fund to decline in value.
•
Counterparty
Risk. Counterparty
risk includes the possibility that a party to a transaction involving the Fund
will fail to meet its obligations. This could cause the Fund to lose the benefit
of the transaction or prevent the Fund from selling or buying other securities
to implement its investment strategy.
•Currency
Exchange Rate Risk. Changes
in currency exchange rates and the relative value of non-U.S. currencies will
affect the value of the Fund’s investments and the value of your Shares. Because
the Fund’s NAV is determined on the basis of U.S. dollars, the U.S. dollar value
of your investment in the Fund may go down if the value of the local currency of
the non-U.S. markets in which the Fund invests depreciates against the U.S.
dollar. This is true even if the local currency value of securities in the
Fund’s holdings goes up. Conversely, the dollar value of your investment in the
Fund may go up if the value of the local currency appreciates against the U.S.
dollar. The value of the U.S. dollar measured against other currencies is
influenced by a variety of factors. These factors include: national debt levels
and trade deficits, changes in balances of payments and trade, domestic and
foreign interest and inflation rates, global or regional political, economic or
financial events, monetary policies of governments, actual or potential
government intervention, and global energy prices. Political instability, the
possibility of government intervention and restrictive or opaque business and
investment policies may also reduce the value of a country’s currency.
Government monetary policies and the buying or selling of currency by a
country’s government may also influence exchange rates. Currency exchange rates
can be very volatile and can change quickly and unpredictably. As a result, the
value of an investment in the Fund may change quickly and without warning, and
you may lose money.
•Depositary
Receipt Risk.
The Fund may hold the securities of non-U.S. companies in the form of ADRs. ADRs
are negotiable certificates issued by a U.S. financial institution that
represent a specified number of shares in a foreign stock and trade on a U.S.
national securities exchange, such as the Exchange. Sponsored ADRs are issued
with the support of the issuer of the foreign stock underlying the ADRs and
carry all of the rights of common shares, including voting rights. The
underlying issuers of certain ADRs are under no obligation to distribute
shareholder communications to the holders of such receipts, or to pass through
to them any voting rights with respect to the deposited securities. The
underlying securities of the ADRs in the Fund’s portfolio are usually
denominated or quoted in currencies other than the U.S. dollar. As a result,
changes in foreign currency exchange rates may affect the value of the Fund’s
portfolio. In addition, because the underlying securities of ADRs trade on
foreign exchanges at times when the U.S. markets are not open for trading, the
value of the securities underlying the ADRs may change materially at times when
the U.S. markets are not open for trading, regardless of whether there is an
active U.S. market for Shares.
•
ELNs
Risk. Investing
in ELNs may be more costly to a Fund than if the Fund had invested in the
Underlying Instruments directly. Investments in ELNs often have risks similar to
the Underlying Instruments, which include market risk and, as applicable,
foreign securities and currency risk. The Underlying Instruments of the ELN
involve the use of options under the terms defined in the ELN itself. Due to the
utilization of options and depending on the terms of the ELN, the ELN may be
sensitive to leverage risk. That leverage risk is limited to the change in the
value of the ELN and its terms. The Fund’s losses from investing in an ELN is
limited to the principal amount that the Fund invested in such ELN. In addition,
since ELNs are in note form, ELNs are also subject to certain debt securities
risks, such as credit or counterparty risk. Should the prices of the Underlying
Instruments move in an unexpected manner, a Fund may not achieve the anticipated
benefits of an investment in an ELN, and may realize losses, which could be
significant and could include the entire principal investment. Investments in
ELNs are also subject to liquidity risk, which may make ELNs difficult to sell
and value. A lack of liquidity may also cause the value of the ELN to decline.
In addition, ELNs may exhibit price behavior that does not correlate with the
Underlying Instruments. ELN investments are subject to the risk that issuers
and/or counterparties will fail to make payments when due or default completely.
Prices of these investments may be adversely affected if any of the issuers or
counterparties it is invested in are subject to an actual or perceived
deterioration in their credit quality. If the ELN is held to maturity, the
issuer would pay to the purchaser the Underlying Instrument’s value at maturity
with any necessary adjustments. The holder of an ELN that is linked to a
particular underlying security or instrument may be entitled to receive
dividends paid in connection with that underlying equity security, but typically
does not receive voting rights as it would if it directly owned the underlying
equity security. Unlike a direct investment in equity securities, ELNs typically
involve a term or expiration date, potentially increasing the Fund’s turnover
rate, transaction costs and tax liability. Investments in ELNs allow for
enhanced yield but are subject to limited upside appreciation
potential
based on movements of a single underlying reference asset, basket of stocks, or
index of equity securities.
•Emerging
Markets Risk.
Investments
in securities and instruments traded in developing or emerging markets, or that
provide exposure to such 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) fewer investor rights
and limited legal or practical remedies available to investors against emerging
market companies, (viii) restrictions on the transfer of securities or
currency, and (ix) 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.
In
addition, investors in emerging market companies may have limited rights
relative to investors in U.S. companies. Investors may also have limited avenues
of recourse against emerging market companies in the form of shareholder claims,
such as class action lawsuits and fraud claims, which may be difficult or
impossible to pursue in emerging markets as a matter of law or
practicality.
•Geopolitical
Risk. Some
countries and regions in which the Fund invests have experienced security
concerns, war or threats of war and aggression, terrorism, economic uncertainty,
natural and environmental disasters and/or systemic market dislocations that
have led, and in the future may lead, to increased short-term market volatility
and may have adverse long-term effects on the U.S. and world economies and
markets generally. Such geopolitical and other events may also disrupt
securities markets and, during such market disruptions, the Fund’s exposure to
the other risks described herein will likely increase. Each of the foregoing may
negatively impact the Fund’s investments.
•ETF
Risks. The
Fund is an ETF, and, as a result of an ETF’s structure, it is exposed to the
following 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.
◦Costs
of Buying or Selling Shares.
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 at which an investor is willing to buy 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 the spread is generally lower
if Shares have more trading volume and market liquidity and higher if Shares
have little trading volume and market liquidity. Further, a relatively small
investor base in the Fund, asset swings in the Fund, and/or increased market
volatility may cause increased bid-ask spreads. Due to the costs of buying or
selling Shares, including bid-ask spreads, frequent trading of Shares may
significantly reduce investment results and an investment in Shares may not be
advisable for investors who anticipate regularly making small investments.
◦
Shares
May Trade at Prices Other Than NAV. As
with all ETFs, Shares may be bought and sold in the secondary market at market
prices. Although it is expected that the market price of Shares will approximate
the Fund’s NAV, there may be times when the market price of Shares is more than
the NAV
intra-day
(premium) or less than the NAV intra-day (discount) due to supply and demand of
Shares or during periods of market volatility. This risk is heightened in times
of market volatility or periods of steep market declines. The market price of
Fund shares during the trading day, like the price of any exchange-traded
security, includes a “bid-ask” spread charged by the exchange specialist, market
makers or other participants that trade the Fund shares. In times of severe
market disruption, the bid-ask spread can increase significantly. At those
times, Fund shares are most likely to be traded at a discount to NAV, and the
discount is likely to be greatest when the price of Fund shares is falling
fastest, which may be the time that you most want to sell your Fund shares. The
Adviser believes that, under normal market conditions, large market price
discounts or premiums to NAV will not be sustained because of arbitrage
opportunities. Because the Fund’s investments have exposure to securities that
may trade on foreign exchanges that are closed when the Fund’s primary listing
exchange is open, there are likely to be deviations between the current price of
a security and the security’s last quoted price from the closed foreign market.
This may result in premiums and discounts that are greater than those
experienced by domestic ETFs.
◦
Trading
.
Although Shares are listed for trading on the Exchange and may be listed or
traded on U.S. and non-U.S. stock exchanges other than the Exchange, there can
be no assurance that an active trading market for such Shares will develop or be
maintained. Trading in Shares may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to Exchange “circuit breaker”
rules, which temporarily halt trading on the Exchange when a decline in the
S&P 500 ®
Index
during a single day reaches certain thresholds ( e.g.
,
7%, 13%, and 20%). Additional rules applicable to the Exchange may halt trading
in Shares when extraordinary volatility causes sudden, significant swings in the
market price of Shares. There can be no assurance that Shares will trade with
any volume, or at all, on any stock exchange. In stressed market conditions, the
liquidity of Shares may begin to mirror the liquidity of the Fund’s underlying
portfolio holdings, which can be significantly less liquid than Shares, and this
could lead to differences between the market price of the Shares and the
underlying value of those Shares.
◦
Foreign
Investment Risk. The
Fund
may be exposed to foreign securities indirectly by investing in Underlying ETFs
that invest in foreign securities, by investing in ADRs, or directly by
investing in non-U.S. companies. Changes in foreign economies and political
climates are more likely to affect the Fund than a fund that invests exclusively
in U.S. companies. Foreign issuers may be subject to different accounting,
auditing, financial reporting and investor protection standards than U.S.
issuers. Investments in foreign securities may be subject to additional trading,
settlement, custodial, and operational risks. With respect to certain countries,
there is the possibility of government intervention and expropriation or
nationalization of assets. There may also be less government supervision of
foreign markets, resulting in non-uniform accounting practices and less publicly
available information. The value of foreign investments may be affected by
changes in exchange control regulations, application of foreign tax laws
(including withholding tax), changes in governmental administration or economic
or monetary policy (in this country or abroad) or changed circumstances in
dealings between nations. Investments in foreign issues could be affected by
other factors not present in the United States, including expropriation, armed
conflict, confiscatory taxation, and potential difficulties in enforcing
contractual obligations. 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 Shares. Conversely, Shares may trade on days when foreign exchanges are
closed. Each of these factors can make investments in the Fund more volatile and
potentially less liquid than other types of investments. Foreign markets often
have less reliable securities valuations and greater risk associated with the
custody of securities than the U.S. There may be significant obstacles to
obtaining information necessary for investigations into or litigation against
companies and shareholders may have limited legal remedies. Each of these
factors can make investments in the Fund more volatile and potentially less
liquid than other types of investments.
•Geographic
Investment Risk. To
the extent that the Fund invests a significant portion of its assets in the
securities of companies of a single country or region, it is more likely to be
impacted by events or conditions affecting that country or region. For example,
political and economic conditions and changes in regulatory, tax, or economic
policy in a country could significantly affect the market in that country and in
surrounding or related countries and have a negative impact on the Fund’s
performance. Currency developments or restrictions, political and social
instability, and changing economic conditions have resulted in significant
market volatility.
•Limited
Operating History.
The 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.
•Management
Risk. The
Fund is actively managed and may not meet its investment objective based on the
Adviser’s success or failure to implement investment strategies for the Fund.
•
Market
Risk. The
trading prices of the securities held by the Fund, as well as the Underlying
Instruments of the ELNs, fluctuate in response to a variety of factors. These
factors include events impacting the entire market or specific market segments,
such as political, market and economic developments, as well as events that
impact specific issuers. The Fund’s NAV and market price, like security and
commodity prices generally, may fluctuate significantly in response to these and
other factors. Local, regional or global events such as war, including Russia’s
invasion of Ukraine, acts of terrorism, spread of infectious diseases or other
public health issues, recessions, rising inflation, or other events could have a
significant negative impact on the Fund and its investments. For example, the
global pandemic caused by COVID-19, a novel coronavirus, and the aggressive
responses taken by many governments, including closing borders, restricting
international and domestic travel, and the imposition of prolonged quarantines
or similar restrictions, has had negative impacts, and in many cases severe
impacts, on markets worldwide. The COVID-19 pandemic has caused prolonged
disruptions to the normal business operations of companies around the world and
the impact of such disruptions is hard to predict. Such events may affect
certain geographic regions, countries, sectors and industries more significantly
than others. Such events could adversely affect the prices and liquidity of the
Fund’s portfolio securities or other instruments and could result in disruptions
in the trading markets. As a result, an investor could lose money over short or
long periods of time.
Beginning
in the first quarter of 2020, financial markets in the United States and around
the world experienced extreme and in many cases unprecedented volatility and
severe losses due to the global pandemic caused by COVID-19, a novel
coronavirus. The pandemic has resulted in a wide range of social and economic
disruptions, including closed borders, voluntary or compelled quarantines of
large populations, stressed healthcare systems, reduced or prohibited domestic
or international travel, supply chain disruptions, and so-called “stay-at-home”
orders throughout much of the United States and many other countries. The
fall-out from these disruptions has included the rapid closure of businesses
deemed “non-essential” by federal, state, or local governments and rapidly
increasing unemployment, as well as greatly reduced liquidity for certain
instruments at times. Some sectors of the economy and individual issuers have
experienced particularly large losses. Such disruptions may continue for an
extended period of time or reoccur in the future to a similar or greater extent.
In response, the U.S. government and the Federal Reserve have taken
extraordinary actions to support the domestic economy and financial markets,
resulting in very low interest rates and in some cases negative yields. It is
unknown how long circumstances related to the pandemic will persist, whether
they will reoccur in the future, whether efforts to support the economy and
financial markets will be successful, and what additional implications may
follow from the pandemic. The impact of these events and other epidemics or
pandemics in the future could adversely affect Fund performance.
•Market
Capitalization Risk.
•
Large-Capitalization
Investing .
The securities of large cap companies may be relatively mature compared to
smaller companies and therefore subject to slower growth during times of
economic expansion. Large-capitalization companies may also be unable to respond
quickly to new competitive challenges, such as changes in technology and
consumer tastes. The Fund’s performance may be adversely affected if
securities
of large cap companies outperform the market as a whole because the Fund invests
in ELNs with short call option spreads on large cap equities. Because ELNs
generate income from premiums on options sold and are subject to limited upside
appreciation given their use of short call option spreads on large cap equities,
the outperformance of, or volatility related to, large cap companies may
adversely impact the ELN’s performance, which in turn may adversely impact Fund
performance.
•
Mid-Capitalization
Investing). The
securities of mid-capitalization companies may be more vulnerable to adverse
issuer, market, political, or economic developments than securities of
large-capitalization companies, but they may also be subject to slower growth
than small-capitalization companies during times of economic expansion. The
securities of mid-capitalization companies generally trade in lower volumes and
are subject to greater and more unpredictable price changes than large
capitalization stocks or the stock market as a whole, but they may also be
nimbler and more responsive to new challenges than large-capitalization
companies. Some mid-capitalization companies have limited product lines,
markets, financial resources, and management personnel and tend to concentrate
on fewer geographical markets relative to large-capitalization companies. The
Fund’s performance may be adversely affected if securities of mid cap companies
outperform the market as a whole because the Fund invests in ELNs with short
call option spreads on mid cap equities. Because ELNs generate income from
premiums on options sold and are subject to limited upside appreciation given
their use of short call option spreads on mid cap equities, the outperformance
of, or volatility related to, mid cap companies may adversely impact the ELN’s
performance, which in turn may adversely impact Fund performance.
•Non-Diversification
Risk.
The
Fund is 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. As a result, the Fund may be more exposed to
the risks associated with and developments affecting an individual issuer or a
smaller number of issuers than a fund that invests more widely. This may
increase the Fund’s volatility and cause the performance of a relatively smaller
number of issuers to have a greater impact on the Fund’s performance. However,
the Fund intends to satisfy the diversification requirements for qualifying as a
regulated investment company (a “RIC”) under Subchapter M of the Internal
Revenue Code of 1986, as amended (the “Code”).
•
Options
Risk. The
Fund invests in ELNs that utilize call options. Purchasing and selling (writing)
options are speculative activities and entail greater than ordinary investment
risks. The use of options can lead to losses because of adverse movements in the
price or value of the reference asset, which may be magnified by certain
features of the options. Purchasing options involves the payment of premiums,
which may adversely affect the ELNs, and, consequently, the Fund’s performance.
Purchased options may expire worthless resulting in the ELN’s loss of the
premium it paid for the option. When selling an option, the ELN will receive a
premium; however, this premium may not be enough to offset a loss incurred by
the ELN if the price of the underlying asset is above the strike price by an
amount equal to or greater than the premium. In addition, to the extent a
written option that is part of an option spread strategy is exercised, the
corresponding option purchased by the ELN to mitigate losses as part of an
option spread strategy is not expected to offset all losses from the written
option.
•
Other
Investment Companies Risk. The
risks of investing in other ETFs typically reflect the risks associated with the
investment strategies of the other ETFs and the types of instruments in which
the other ETFs invest. By investing in another ETF, the Fund becomes a
shareholder of that ETF and bears its proportionate share of the fees and
expenses of the other ETF. The Fund may be subject to statutory limits with
respect to the amount it can invest in other ETFs, which may adversely affect
the Fund’s ability to achieve its investment objective. Investments in ETFs are
also subject to the “ETF Risks” described above.
Information
about the Fund’s daily portfolio holdings will be available at
www.aptusetfs.com/idub. A complete description of the Fund’s policies and
procedures with respect to the disclosure of the Fund’s portfolio holdings is
available in the Fund’s Statement of Additional Information (“SAI”).
Aptus
serves as the Fund’s investment adviser and has overall responsibility for the
general management of the Fund. Aptus is a registered investment adviser with
offices located at 265 Young Street Fairhope, Alabama 36532. Aptus provides
investment advisory services to separately managed accounts, as well as to the
Fund. Aptus also arranges for transfer agency, custody, fund administration, and
all other related services necessary for the Fund to operate. For the services
it provides to the Fund, the Fund pays the Adviser a unified management fee,
which is calculated daily and paid monthly, at an annual rate of 0.39% based on
the Fund’s average daily net assets. Prior to May 1, 2023, the Adviser received
management fees equal to 0.59% of the Fund’s average daily net assets.
Under
the Investment Advisory Agreement, the Adviser has agreed to pay all expenses of
the Fund except for the fee paid to the Adviser pursuant to the Investment
Advisory Agreement, interest charges on any borrowings, taxes, brokerage
commissions and other expenses incurred in placing orders for the purchase and
sale of securities and other investment instruments, acquired fund fees and
expenses, accrued deferred tax liability, extraordinary expenses, and
distribution fees and expenses paid by the Trust under any distribution plan
adopted pursuant to Rule 12b-1 under the 1940 Act.
The
basis for the Board of Trustees’ (the “Board”) approval of the Fund’s Investment
Advisory Agreement is available in the Fund’s Annual
Report to
Shareholders dated April 30, 2022.
Mark
Callahan is a Portfolio Manager and the Head of Trading at Aptus and has been
with Aptus since 2019. In his role as Portfolio Manager, Mr. Callahan has been
focused on derivative management, timing, hedging, and trading. Prior to joining
Aptus, Mr. Callahan enjoyed a nearly 12-year career on the Sell-Side as an
Institutional Equity and Derivatives Trader, as well as a Transition Manager.
Mr. Callahan holds a BBA in Finance from the University of Oklahoma, and a MSc.
of Real Estate from the University of Texas at Arlington.
JD
Gardner, CFA, CMT, is the Managing Member and Chief Investment Officer at Aptus
and has been with Aptus since founding the firm in 2013. Prior to Aptus, Mr.
Gardner was a research analyst at Cornerstone Investment Management and an
Associated Person for a commodity trading advisor. Mr. Gardner previously held
roles in wealth and asset management for UBS and Morgan Stanley.
Brad
Rapking, CFA, is a Portfolio Manager and Analyst at Aptus and joined the firm in
2020. In his role as Portfolio Manager, Mr. Rapking is focused on portfolio
construction, fundamental research, idea generation and buy/sell decisions. Mr.
Rapking graduated from Xavier University in 2015 with a BSBA in Finance. Mr.
Rapking is a CFA Charterholder and a member of the CFA Institute and CFA Society
of Alabama. Prior to joining Aptus, Mr. Rapking was an Equity Analyst for the
Driehaus Capital Value Equities team responsible for fundamental research and
idea generation in the Small Cap Value, Micro Cap Value, and International Small
Cap Value strategies. Mr. Rapking has more than five years of experience in
institutional equity research, trading and operations.
John
Luke Tyner, CFA, is a Portfolio Manager and Analyst at Aptus and he has been
with Aptus since 2019. In his role as Portfolio Manager, Mr. Tyner has been
focused on custom research, and he was heavily involved in the Fund’s strategy.
In addition, he also builds and maintains asset allocation models for individual
investors in separately managed accounts. Mr. Tyner is CFA Charterholder. Prior
to joining Aptus, Mr. Tyner worked in Industrial Sales at Duncan-Williams, Inc.
since 2015. He earned a B.A. in Accounting from the University of Memphis and
was a member of the golf team.
David
Wagner III, CFA, is a Portfolio Manager and Analyst at Aptus and joined the firm
in 2020. In his role as Portfolio Manager, he is responsible for portfolio
construction, risk management, and buy/sell decisions. Additionally, he is
responsible for implementation of the investment philosophy and idea generation,
as well as the evaluation of macro-level trends and the market environment.
Mr. Wagner began his career at Opus Capital
Management
in 2013 as an equity research analyst. He was most recently employed by Driehaus
Capital Management as an Assistant Portfolio Manager where he was responsible
for conducting research and analysis for various small and microcap strategies.
Mr. Wagner is a CFA Charterholder and a member of the CFA Society of Cincinnati.
He earned his BS in Accounting and BBA in Finance from the University of
Kentucky. He also earned his MBA specialized in Finance from Xavier University
in Cincinnati, Ohio.
The
Fund’s SAI provides additional information about the Portfolio Managers’
compensation structure, other accounts managed by the Portfolio Managers, and
the Portfolio Managers’ ownership of Shares.
The
Fund issues and redeems Shares at NAV only in Creation Units. Only APs may
acquire Shares directly from the Fund, and only APs may tender their Shares for
redemption directly to the Fund, at NAV. APs must be a member or participant of
a clearing agency registered with the SEC and must execute a Participant
Agreement that has been agreed to by the Distributor (defined below), and that
has been accepted by the Fund’s transfer agent, with respect to purchases and
redemptions of Creation Units. Once created, Shares trade in the secondary
market in quantities less than a Creation Unit.
Most
investors buy and sell Shares in secondary market transactions through brokers.
Shares are listed for trading on the secondary market on the Exchange and can be
bought and sold throughout the trading day like other publicly traded
securities.
When
buying or selling Shares through a broker, you will incur customary brokerage
commissions and charges, and you may pay some or all of the bid-ask spread on
your transactions. In addition, because secondary market transactions occur at
market prices, you may pay more than NAV when you buy Shares and receive less
than NAV when you sell those Shares.
Shares
are held in book-entry form, which means that no stock certificates are issued.
The Depository Trust Company (“DTC”) or its nominee is the record owner of all
outstanding Shares.
Investors
owning Shares are beneficial owners as shown on the records of DTC or its
participants. DTC serves as the securities depository for all Shares. DTC’s
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and other institutions that directly or indirectly
maintain a custodial relationship with DTC. As a beneficial owner of Shares, you
are not entitled to receive physical delivery of stock certificates or to have
Shares registered in your name, and you are not considered a registered owner of
Shares. Therefore, to exercise any right as an owner of Shares, you must rely
upon the procedures of DTC and its participants. These procedures are the same
as those that apply to any other securities that you hold in book entry or
“street name” through your brokerage account.
The
Fund imposes no restrictions on the frequency of purchases and redemptions of
Shares. In determining not to approve a written, established policy, the Board
evaluated the risks of market timing activities by Fund shareholders. Purchases
and redemptions by APs, who are the only parties that may purchase or redeem
Shares directly with the Fund, are an essential part of the ETF process and help
keep Share trading prices in line with NAV. As such, the Fund accommodates
frequent purchases and redemptions by APs. However, the Board has also
determined that frequent purchases and redemptions for cash may increase
tracking error and portfolio transaction costs and may lead to the realization
of capital gains. To minimize these potential consequences of frequent purchases
and redemptions, the Fund employs fair value pricing and may impose transaction
fees on purchases and redemptions of Creation Units to cover the custodial and
other costs incurred by the Fund in effecting trades. In addition, the Fund and
the Adviser reserve the right to reject any purchase order at any time.
The
Fund’s NAV is calculated as of the scheduled close of regular trading on the New
York Stock Exchange (“NYSE”), generally 4:00 p.m. Eastern time, each day
the NYSE is open for business. The NAV is calculated by dividing the Fund’s net
assets by its Shares outstanding.
In
calculating its NAV, each Fund generally values its assets on the basis of
market quotations, last sale prices, or estimates of value furnished by a
pricing service or brokers who make markets in such instruments. Debt
obligations with maturities of 60 days or less are valued at amortized
cost. The values of non-U.S. dollar denominated securities are converted to U.S.
dollars using foreign currency exchange rates generally determined as of 4:00
p.m., London time. If the foregoing information is not available for a security
held by a Fund or is determined to be unreliable, the security will be valued by
the Adviser at fair value pursuant to procedures established by the Adviser and
approved by the Board (as described below).
The
Adviser has been designated by the Board as the valuation designee for the Fund
pursuant to Rule 2a-5 under the 1940 Act. In its capacity as valuation designee,
the Adviser has adopted procedures and methodologies to fair value Fund
securities whose market prices are not “readily available” or are deemed to be
unreliable. For example, such circumstances may arise when: (i) a security has
been de-listed or has had its trading halted or suspended; (ii) a security’s
primary pricing source is unable or unwilling to provide a price; (iii) a
security’s primary trading market is closed during regular market hours; or (iv)
a security’s value is materially affected by events occurring after the close of
the security’s primary trading market. The Board has appointed the Adviser as
the Fund’s valuation designee to perform all fair valuations of the Fund’s
portfolio investments, subject to the Board’s oversight. Accordingly, the
Adviser has established procedures for its fair valuation of the Fund’s
portfolio investments. Generally, when fair valuing a security held by the Fund,
the Adviser will take into account all reasonably available information that may
be relevant to a particular valuation including, but not limited to, fundamental
analytical data regarding the issuer, information relating to the issuer’s
business, recent trades or offers of the security, general and/or specific
market conditions and the specific facts giving rise to the need to fair value
the security. Fair value determinations are made in good faith and in accordance
with the fair value methodologies established by the Adviser. Due to the
subjective and variable nature of determining the fair value of a security or
other investment, there can be no assurance that the Adviser’s fair value will
match or closely correlate to any market quotation that subsequently becomes
available or the price quoted or published by other sources. In addition, the
Fund may not be able to obtain the fair value assigned to the security upon the
sale of such security.
Section 12(d)(1)
of the 1940 Act restricts investments by registered investment companies in the
securities of other investment companies, including Shares. Registered
investment companies are permitted to invest in the Fund beyond the limits set
forth in section 12(d)(1) subject to certain terms and conditions set forth in
Rule 12d1-4 under the 1940 Act, including that such investment companies enter
into an agreement with the Fund. The relief from Section 12(d)(1), however, is
not available for investments in the Fund because the Fund invests significantly
in other ETFs.
Householding
is an option available to certain investors of the Fund. Householding is a
method of delivery, based on the preference of the individual investor, in which
a single copy of certain shareholder documents can be delivered to investors who
share the same address, even if their accounts are registered under different
names. Householding for the Fund is available through certain broker-dealers. If
you are interested in enrolling in householding and receiving a single copy of
prospectuses and other shareholder documents, please contact your broker-dealer.
If you are currently enrolled in householding and wish to change your
householding status, please contact your broker-dealer.
Dividends
and Distributions
The
Fund intends to pay out dividends, if any, and distribute any net realized
capital gains to its shareholders at least annually. The Fund will declare and
pay capital gain distributions in cash. Distributions in cash may be reinvested
automatically in additional whole Shares only if the broker through whom you
purchased Shares makes such option available. Your broker is responsible for
distributing the income and capital gain distributions to you.
Taxes
The
following discussion is a summary of some important U.S. federal income tax
considerations generally applicable to investments in the Fund. Your investment
in the Fund may have other tax implications. Please consult your tax advisor
about the tax consequences of an investment in Shares, including the possible
application of foreign, state, and local tax laws. This summary does not apply
to Shares held in an IRA or other tax-qualified plans, which are generally not
subject to current tax. Transactions relating to Shares held in such accounts
may, however, be taxable at some time in the future. This summary is based on
current tax laws, which may change.
The
Fund intends to elect and qualify each year for treatment as a regulated
investment company (“RIC”) under the Code. If it meets certain minimum
distribution requirements, a RIC is not subject to tax at the fund level on
income and gains from investments that are timely distributed to shareholders.
However, the Fund’s failure to qualify as a RIC or to meet minimum distribution
requirements would result (if certain relief provisions were not available) in
fund-level taxation and, consequently, a reduction in income available for
distribution to shareholders.
Unless
your investment in Shares is made through a tax-exempt entity or tax-advantaged
account, such as an IRA, you need to be aware of the possible tax consequences
when the Fund makes distributions, when you sell your Shares listed on the
Exchange, and when you purchase or redeem Creation Units (APs only).
Taxes
on Distributions
The
Fund intends to distribute, at least annually, substantially all of its net
investment income and net capital gains. For federal income tax purposes,
distributions of investment income are generally taxable as ordinary income or
qualified dividend income. Taxes on distributions of capital gains (if any) are
determined by how long the Fund owned the investments that generated them,
rather than how long a shareholder has owned his or her Shares. Sales of assets
held by the Fund for more than one year generally result in long-term capital
gains and losses, and sales of assets held by the Fund for one year or less
generally result in short-term capital gains and losses. Distributions of the
Fund’s net capital gain (the excess of net long-term capital gains over net
short-term capital losses) that are reported by the Fund as capital gain
dividends (“Capital Gain Dividends”) will be taxable as long-term capital gains,
which for non-corporate shareholders are subject to tax at reduced rates of up
to 20% (lower rates apply to individuals in lower tax brackets). Distributions
of short-term capital gain will generally be taxable as ordinary income.
Dividends and distributions are generally taxable to you whether you receive
them in cash or reinvest them in additional Shares.
Distributions
reported by the Fund as “qualified dividend income” are generally taxed to
non-corporate shareholders at rates applicable to long-term capital gains,
provided holding period and other requirements are met. “Qualified dividend
income” generally is income derived from dividends paid by U.S. corporations or
certain foreign corporations that are either incorporated in a U.S. possession
or eligible for tax benefits under certain U.S. income tax treaties. In
addition, dividends that the Fund received in respect of stock of certain
foreign corporations may be qualified dividend income if that stock is readily
tradable on an established U.S. securities market. Dividends received by the
Fund from an ETF, or an underlying fund taxable as a RIC may be treated as
qualified dividend income generally only to the extent so reported by such ETF
or underlying fund. Corporate shareholders may be entitled to a dividends
received deduction for the portion of dividends they receive from the Fund that
are attributable to dividends received by the Fund from U.S. corporations,
subject to certain limitations.
Dividends
received by the Fund from an ETF or underlying fund taxable as a RIC may be
treated as qualified dividend income generally only to the extent so reported by
such ETF or underlying fund.
Shortly
after the close of each calendar year, you will be informed of the amount and
character of any distributions received from the Fund.
U.S.
individuals with income exceeding specified thresholds are subject to a 3.8% tax
on all or a portion of their “net investment income,” which includes interest,
dividends, and certain capital gains (generally including capital gains
distributions and capital gains realized on the sale of Shares). This 3.8% tax
also applies to all or a portion of the undistributed net investment income of
certain shareholders that are estates and trusts.
In
general, your distributions are subject to federal income tax for the year in
which they are paid. Certain distributions paid in January, however, may be
treated as paid on December 31 of the prior year. Distributions are generally
taxable even if they are paid from income or gains earned by the Fund before
your investment (and thus were included in the Shares’ NAV when you purchased
your Shares).
You
may wish to avoid investing in the Fund shortly before a dividend or other
distribution, because such a distribution will generally be taxable even though
it may economically represent a return of a portion of your investment.
If
the Fund’s distributions exceed its earnings and profits, all or a portion of
the distributions made for a taxable year may be recharacterized as a return of
capital to shareholders. A return of capital distribution will generally not be
taxable, but will reduce each shareholder’s cost basis in Shares and result in a
higher capital gain or lower capital loss when the Shares are sold. After a
shareholder’s basis in Shares has been reduced to zero, distributions in excess
of earnings and profits in respect of those Shares will be treated as gain from
the sale of the Shares.
If
you are neither a resident nor a citizen of the United States or if you are a
foreign entity, distributions (other than Capital Gain Dividends) paid to you by
the Fund will generally be subject to a U.S. withholding tax at the rate of 30%,
unless a lower treaty rate applies. Gains from the sale or other disposition of
Shares by non-U.S. shareholders generally are not subject to U.S. taxation,
unless you are a nonresident alien individual who is physically present in the
U.S. for 183 days or more per year. The Fund may, under certain circumstances,
report all or a portion of a dividend as an “interest-related dividend” or a
“short-term capital gain dividend,” which would generally be exempt from this
30% U.S. withholding tax, provided certain other requirements are met.
Different tax consequences may result if you are a foreign shareholder engaged
in a trade or business within the United States or if a tax treaty applies.
The
Fund (or a financial intermediary, such as a broker, through which a shareholder
owns Shares) generally is required to withhold and remit to the U.S. Treasury a
percentage (currently 24%) of the taxable distributions and sale proceeds paid
to any shareholder who fails to properly furnish a correct taxpayer
identification number, who has underreported dividend or interest income, or who
fails to certify that the shareholder is not subject to such withholding.
Taxes
When Shares are Sold on the Exchange
Provided
that a shareholder holds Shares as capital assets, any capital gain or loss
realized upon a sale of Shares generally is treated as a long-term capital gain
or loss if Shares have been held for more than one year and as a short-term
capital gain or loss if Shares have been held for one year or less. However, any
capital loss on a sale of Shares held for six months or less is treated as
long-term capital loss to the extent of Capital Gain Dividends paid with respect
to such Shares. Any loss realized on a sale will be disallowed to the extent
Shares of the Fund are acquired, including through reinvestment of dividends,
within a 61-day period beginning 30 days before and ending 30 days after the
disposition of Shares. The ability to deduct capital losses may be limited.
The
cost basis of Shares of the Fund acquired by purchase will generally be based on
the amount paid for the Shares and then may be subsequently adjusted for other
applicable transactions as required by the Code. The difference between the
selling price and the cost basis of Shares generally determines the amount of
the capital gain or loss realized on the sale or exchange of Shares. Contact the
broker through whom you purchased your Shares to obtain information with respect
to the available cost basis reporting methods and elections for your account.
Taxes
on Purchases and Redemptions of Creation Units
An
AP having the U.S. dollar as its functional currency for U.S. federal income tax
purposes who exchanges securities for Creation Units generally recognizes a gain
or a loss. The gain or loss will be equal to the difference between the value of
the Creation Units at the time of the exchange and the exchanging AP’s aggregate
basis in the securities delivered, plus the amount of any cash paid for the
Creation Units. An AP who exchanges Creation Units for securities will generally
recognize a gain or loss equal to the difference between the exchanging AP’s
basis in the Creation Units and the aggregate U.S. dollar market value of the
securities received, plus any cash received for such Creation Units. The
Internal Revenue Service may assert, however, that a loss that is realized upon
an exchange of securities for Creation Units may not be currently deducted under
the rules governing “wash sales” (for an AP who does not mark-to-market its
holdings), or on the basis that there has been no significant change in economic
position. APs exchanging securities should consult their own tax advisor with
respect to whether the wash sales rule applies and when a loss might be
deductible.
The
Fund may include a payment of cash in addition to, or in place of, the delivery
of a basket of securities upon the redemption of Creation Units. The Fund may
sell portfolio securities to obtain the cash needed to distribute redemption
proceeds. This may cause the Fund to recognize investment income and/or capital
gains or losses that it might not have recognized if it had completely satisfied
the redemption in-kind. As a result, the Fund may be less tax efficient if it
includes such a cash payment in the proceeds paid upon the redemption of
Creation Units.
Taxation
of Complex Investments
Certain
of the Fund’s investments may be subject to complex provisions of the Code that,
among other things, may affect the Fund’s ability to qualify as a RIC, affect
the character of gains and losses realized by the Fund ( e.g.
,
may affect whether gains or losses are ordinary or capital), accelerate
recognition of income to the Fund and defer losses. These rules could therefore
affect the character, amount and timing of distributions to shareholders. These
provisions also may require the Fund to mark to market certain types of
positions in its portfolio ( i.e.
,
treat them as if they were closed out) which may cause the Fund to recognize
income without the Fund receiving cash with which to make distributions in
amounts sufficient to enable the Fund to satisfy the RIC distribution
requirements for avoiding income and excise taxes. The Fund intends to monitor
its transactions, intends to make appropriate tax elections, and intends to make
appropriate entries in its books and records to mitigate the effect of these
rules and preserve the Fund’s qualification for treatment as a RIC. To the
extent the Fund invests in an ETF or underlying fund that is taxable as a RIC,
the rules applicable to the tax treatment of complex securities will also apply
to such ETF or underlying fund that also invests in such complex securities and
investments.
Foreign
Taxes
Dividends
and interest received by the Fund from sources within foreign countries may be
subject to withholding and other taxes imposed by such countries. Tax treaties
between certain countries and the U.S. may reduce or eliminate such taxes.
Foreign tax credits, if any, received by the Fund as a result of an investment
in another RIC (including an ETF which is taxable as a RIC) will not be passed
through to you unless the Fund qualifies as a “qualified fund-of-funds” under
the Code. If the Fund is a “qualified fund-of-funds” it will be eligible to file
an election with the Internal Revenue Service that will enable the Fund to pass
along these foreign tax credits to its shareholders. The Fund will be treated as
a “qualified fund-of-funds” under the Code if at least 50% of the value of the
Fund’s total assets (at the close of each quarter of the Fund’s taxable year) is
represented by interests in other RICs. Each Fund does not expect to satisfy the
requirements for passing through to its shareholders any share of foreign taxes
paid by the Fund, with the result that shareholders will not include such taxes
in their gross incomes and will not be entitled to a tax deduction or credit for
such taxes on their own tax returns.
Net
Investment Income Tax
U.S.
individuals with income exceeding specified thresholds are subject to a 3.8% tax
on all or a portion of their “net investment income,” which includes interest,
dividends, and certain capital gains (generally including capital gains
distributions and capital gains realized on the sale of Shares). This 3.8% tax
also applies to all or a portion of the undistributed net investment income of
certain shareholders that are estates and trusts.
The
foregoing discussion summarizes some of the possible consequences under current
federal tax law of an investment in each Fund. It is not a substitute for
personal tax advice. You also may be subject to state and local tax on Fund
distributions and sales of Shares. Consult your personal tax advisor about the
potential tax consequences of an investment in Shares
under
all applicable tax laws. For more information, please see the section entitled
“Federal Income Taxes” in the SAI.
The
Distributor, Quasar Distributors, LLC, a wholly owned subsidiary of Foreside
Financial Group, LLC (d/b/a ACA Group), is a broker-dealer registered with the
SEC. The Distributor distributes Creation Units for the Fund on an agency basis
and does not maintain a secondary market in Shares. The Distributor has no role
in determining the policies of the Fund or the securities that are purchased or
sold by the Fund. The Distributor’s principal address is 111 East Kilbourn
Avenue, Suite 2200, Milwaukee, Wisconsin 53202.
The
Board has adopted a Distribution and Service Plan (the “Plan”) pursuant to Rule
12b-1 under the 1940 Act. In accordance with the Plan, the Fund is authorized to
pay an amount up to 0.25% of its average daily net assets each year for certain
distribution-related activities and shareholder services.
No
Rule 12b-1 fees are currently paid by the Fund, and there are no plans to impose
these fees. However, in the event Rule 12b-1 fees are charged in the future,
because the fees are paid out of the Fund’s assets, over time these fees will
increase the cost of your investment and may cost you more than certain other
types of sales charges.
Information
regarding how often Shares traded on the Exchange at a price above (
i.e.
,
at a premium) or below ( i.e.
,
at a discount) the NAV per Share is available, free of charge, on the Funds’
website at www.aptusetfs.com.
Shares
of the Trust are not sponsored, endorsed, or promoted by the Exchange. The
Exchange makes no representation or warranty, express or implied, to the owners
of the shares of the Fund. The Exchange is not responsible for, nor has it
participated in, the determination of the timing of, prices of, or quantities of
the shares of the Fund to be issued, or 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 Fund in
connection with the administration, marketing, or trading of the shares of the
Fund. Without limiting any of the foregoing, in no event shall the Exchange have
any liability for any lost profits or indirect, punitive, special, or
consequential damages even if notified of the possibility thereof.
The
Adviser and the Fund make no representation or warranty, express or implied, to
the owners of shares of the Fund or any members of the public regarding the
advisability of investing in securities generally or in the Fund
particularly.
The
financial highlights tables are intended to help you understand the Fund’s
financial performance for the Fund’s five most recent fiscal years (or the life
of the Fund, if shorter). Certain information reflects financial results for a
single Share. The total returns in the tables represent the rate that an
investor would have earned or lost on an investment in the Fund (assuming
reinvestment of all dividends and distributions). This information has been
audited by [ ], the Fund’s independent registered public accounting firm, whose
report, along with the Fund’s financial statements, is included in the Fund’s
annual report, which is available upon request.
Aptus
International Enhanced Yield ETF
(formerly,
International Drawdown Managed Equity ETF)
FINANCIAL
HIGHLIGHTS
For
a capital share outstanding throughout each period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six-Months Ended October
31, 2022 (Unaudited) |
|
Period
Ended
April
30,
2022(1) |
|
Net
asset value, beginning of period |
$ |
21.34 |
|
|
$ |
25.00 |
|
|
|
|
|
|
|
INCOME
(LOSS) FROM INVESTMENT OPERATIONS: |
|
|
|
|
Net
investment income (loss) (2)(3) |
0.33 |
|
|
0.36 |
|
|
Net
realized and unrealized gain (loss) on investments |
(3.33) |
|
|
(3.68) |
|
|
Total
from investment operations |
(3.00) |
|
|
(3.32) |
|
|
|
|
|
|
|
DISTRIBUTIONS
TO SHAREHOLDERS: |
|
|
|
|
From
net investment income |
(0.28) |
|
|
(0.34) |
|
|
Total
distributions to shareholders |
(0.28) |
|
|
(0.34) |
|
|
|
|
|
|
|
Net
asset value, end of period |
$ |
18.06 |
|
|
$ |
21.34 |
|
|
|
|
|
|
|
Total
return |
-15.22 |
% |
(4) |
-13.46 |
% |
(4) |
|
|
|
|
|
SUPPLEMENTAL
DATA: |
|
|
|
|
Net
assets at end of period (000’s) |
$ |
115,606 |
|
|
$ |
141,909 |
|
|
|
|
|
|
|
RATIOS
TO AVERAGE NET ASSETS: |
|
|
|
|
Expenses
to average net assets (5) |
0.59 |
% |
(6) |
0.59 |
% |
(6) |
Net
investment income (loss) to average net assets (3) |
3.31 |
% |
(6) |
1.93 |
% |
(6) |
Portfolio
turnover rate (7) |
24 |
% |
(4) |
2 |
% |
(4) |
(1)
Commencement
of operations on July 22, 2021.
(2)
Calculated
based on average shares outstanding during the period.
(3)
Recognition
of net investment income by the Fund is affected by the timing of the
declaration of dividends by the underlying investment companies in which the
Fund invests. The ratio does not include net investment income of the underlying
investment companies in which the Fund invests.
(4)
Not
annualized.
(5)
Does
not include expenses of the investment companies in which the Fund
invests.
(6)
Annualized.
(7)
Excludes
the impact of in-kind transactions.
APTUS
INTERNATIONAL ENHANCED YIELD ETF
|
|
|
|
|
|
|
|
|
|
|
|
Adviser |
Aptus
Capital Advisors, LLC
265
Young Street
Fairhope,
Alabama 36532 |
Custodian |
U.S.
Bank National Association
1555
North Rivercenter Drive, Suite 302
Milwaukee,
Wisconsin 53212 |
Administrator
and Transfer Agent |
U.S.
Bancorp Fund Services, LLC
615
East Michigan Street
Milwaukee,
Wisconsin 53202 |
Distributor |
Quasar
Distributors, LLC
111
East Kilbourn Avenue, Suite 2200
Milwaukee,
Wisconsin 53202 |
Independent
Registered Public Accounting Firm |
[
]
|
Legal
Counsel |
Morgan,
Lewis & Bockius LLP
1111
Pennsylvania Avenue, NW
Washington,
DC 20004-2541 |
Investors
may find more information about the Fund in the following documents:
Statement
of Additional Information. The
Fund’s SAI provides additional details about the investments and techniques of
the Fund and certain other additional information. A current SAI dated [ ], 2023
is on file with the SEC and is herein incorporated by reference into this
Prospectus. It is legally considered a part of this Prospectus.
Annual/Semi-Annual
Reports: Additional
information about the Fund’s investments will be available in the Fund’s annual
and semi-annual reports to shareholders. In the annual report, when available,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund’s performance after the first fiscal year
the Fund is in operation.
You
can obtain free copies of these documents, request other information or make
general inquiries about the Fund by contacting the Fund at c/o U.S. Bank Global
Fund Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701 or by calling
1-800-617-0004.
Shareholder
reports and other information about the Fund are available:
•
Free of charge from the SEC’s EDGAR database on the SEC’s website at
http://www.sec.gov; or
•
Free
of charge from the Fund’s website at www.aptusetfs.com; or