Gabelli Love Our Planet & People ETF
Annual Report — December 31, 2022
(Y)our Portfolio Management Team
Christopher J. Marangi | Timothy M. Winter, CFA | Melody Prenner Bryant |
Co-Chief Investment Officer | Portfolio Manager | Portfolio Manager |
BA, Williams College | BA, Rollins College | BA, Binghamton University |
MBA, Columbia Business School | MBA, University of | |
Notre Dame |
To Our Shareholders,
For the year ended December 31, 2022, the net asset value (NAV) total return of Gabelli Love Our Planet & People ETF (the Fund) was (15.1)% compared with a total return of (17.7)% for the Standard & Poor’s (S&P) 500 ESG Index. The total return based on the Fund’s Market Price was (15.0)% The Fund’s NAV per share was $24.58, while the price of the publicly traded shares closed at $24.58 on the New York Stock Exchange (NYSE) Arca. See page 4 for additional performance information.
Enclosed are the financial statements, including the schedule of investments, for the Fund’s annual report as of December 31, 2022.
As permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s annual and semiannual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website www.gabelli.com/funds/etfs, and you will be notified by mail each time a report is posted and provided with a website link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. To elect to receive all future reports on paper free of charge, please contact your financial intermediary, or, if you invest directly with the Fund, you may call 800-422-3554 or send an email request to [email protected]. |
Investment Objective and Strategy (Unaudited)
The Fund’s investment objective is capital appreciation. The Fund seeks to achieve its objective by investing substantially all, and in any case no less than 80%, of its assets in U.S. exchange-listed common and preferred stocks of companies that meet the Fund’s guidelines for social responsibility at the time of investment. The Fund may also invest in foreign securities by investing in American Depositary Receipts. Under normal market conditions, the Fund invests its assets in stocks that are listed on a national securities exchange or similar market, such as the National Market System of the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Fund focuses on investments in companies whose securities are trading at a material discount to their private market value (“PMV”). PMV is the value the Adviser believes informed investors would be willing to pay for a company.
Socially Responsible Criteria. The Fund combines a differentiated, value oriented investment philosophy with social screens and a holistic ESG (Environmental, Social, Governance) analysis to deliver returns in a socially responsive manner. The Adviser employs a social screening overlay process at the time of investment to identify companies that meet the Fund’s social guidelines. In determining the social responsiveness of a particular company the investment team looks for companies that have initiated and implemented internal policies with respect to certain social issues such as inequality in the workspace and/ or fair treatment of workers.
The Fund relies primarily on proprietary research conducted by the Adviser to reach a judgment on the social responsiveness of each investment candidate but may also employ third party data services. The Adviser will look to MSCI Inc. to provide third party data services along with internal research in reaching the final judgment on the social responsiveness of an issuer. Pursuant to the guidelines, the Fund will not invest in publicly traded fossil fuel (coal, oil, and gas) companies, the top 50 defense/weapons contractors, or in companies that derive more than 5% of their revenues from the following areas: tobacco, alcohol, gaming, and defense/weapons production.
After identifying companies that satisfy these social criteria, the Adviser then will invest in securities of companies that the Adviser believes are trading at a material discount to Private Market Value (“PMV”). The Adviser will monitor each holding on a regular basis to ensure its compliance with the Fund’s guidelines. Securities that no longer meet these guidelines will be sold within a reasonable period of time after the Adviser makes such a determination. Securities may also be sold if the Adviser believes the securities no longer appear to be underpriced relative to their PMV, or if there is a change to an underlying industry or company that the Adviser believes may negatively affect the value of such securities.
Performance Discussion (Unaudited)
The first quarter of 2022 saw a rise in oil prices exacerbated by the war in Ukraine and emphasized the need to find more secure and sustainable sources of energy. Higher crop prices, driven in part by the war, leading to higher farm income. Surging input prices and the increased probability of recession generally hurt our industrial holdings. With its sustainability focus, LOPP has only modest exposure to commodities. However, in the second quarter of 2022 a selloff hit the energy complex, while weakness in corn, beans, and wheat weighed on agricultural machinery manufacturers.
In the second quarter of the year, equipment and packaging suppliers declined in part on fears that higher input costs (including energy) would hurt margins, while pharmaceutical firms improving the lives of “people” added positively to returns.
2
While the fiscal third quarter was difficult for the market, the Fund had a diverse group of positive contributors thanks in part from efforts to harden the electrical grid; continued demand for Lithium, necessary for electric vehicle batteries; and exposure to outsourced solar manufacturing.
In the fourth quarter of 2022, the Fund benefited from the growth in demand for agricultural and irrigation equipment providers and continued high profits in the energy industry. However, the market continued to face pressure from the Federal Reserve’s aggressive interest rate hikes and de-stocking and slowdown in new housing demand.
The largest contributor to returns for 2022 was Hubbell Inc. (4.5% of net assets as of December 31, 2022, +15%), which benefited from efforts to extend and harden the nation’s electrical grid. Other top contributors included Deere & Co. (3.0%, +27%), Flex (3.4%, +17%), Valmont (1.9%, +33%), and Archaea (1.3%, +42%), for reasons discussed above. Cummins Inc. (2.9%, +14%) also supported returns, in part due to prospects for its hydrogen fuel technologies. Among the largest detractors for the year were Ardagh Metal Packaging (2.7%, -43%), which, despite the market’s continued shift to 100% recyclable aluminum cans, fell short of demand expectations due to a slowdown in alcohol seltzer sales; Ranpack Holdings (0.5%, -91%), whose paper-based packaging ran into a slowdown in e-commerce driven growth; General Motors (2.1%, -39%), which continues to make progress in electric vehicles but faced an overall slackening of demand for automobiles; and Alphabet (3.1%, -39%), where a reduction in advertising growth and an increase in personnel costs overwhelmed energy conservation efforts.
We appreciate your investment in the Gabelli Love Our Planet and People ETF.
Thank you for your confidence and trust.
The views expressed reflect the opinions of the Fund’s portfolio managers and Gabelli Funds, LLC, the Adviser, as of the date of this report and are subject to change without notice based on changes in market, economic, or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results. |
3
Comparative Results
Average Annual Returns through December 31, 2022
Total returns and average annual returns reflect changes in share price, reinvestment of distributions, and are net of expenses.
Since | ||||||||
Inception | ||||||||
1 Year | (1/29/21) (a) | |||||||
Gabelli Love Our Planet & People ETF (LOPP) | ||||||||
NAV Total Return | (15.08 | )% | 1.57 | % | ||||
Investment Total Return (b) | (15.02 | ) | 1.57 | |||||
S&P 500 ESG Index (c) | (17.67 | ) | 9.32 |
(a) | LOPP first issued shares January 29, 2021, and shares commenced trading on the NYSE Arca February 1, 2021. |
(b) | Investment total returns are based on the closing market price on the NYSE Arca at the end of the period. |
(c) | The S&P 500 ESG Index is a broad based index of large capitalization stocks meeting sustainability criteria, while maintaining similar overall industry weights as the S&P 500. Dividends are considered reinvested, except for the S&P 500 ESG Index. You cannot invest directly in an index. |
In the current prospectus of Gabelli Love Our Planet & People ETF dated April 29, 2022, the gross expense ratio for the Fund is 0.90%. The net expense ratio for the Fund after contractual expense waiver by Gabelli Funds, LLC (the Adviser) is 0.00%. The waiver is in effect through April 30, 2023. Investors should carefully consider the investment objectives, risks, charges, and expenses of the Fund before investing. The prospectus contains information about these and other matters and should be read carefully before investing. To obtain a prospectus, please visit our website at www.gabelli.com/funds/etfs.
Returns represent past performance and do not guarantee future results. Investment returns and the principal value of an investment will fluctuate. When shares are sold or redeemed they may be worth more or less than their original cost. Current performance may be lower or higher than the performance data presented. Visit www.gabelli.com/funds/etfs for performance information as of the most recent month end.
4
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN GABELLI LOVE OUR PLANET &
PEOPLE ETF AND S&P 500 INDEX (Unaudited)
Average Annual Total Returns* | ||
Since | ||
1 Year | Inception | |
Investment | (15.02)% | 1.57% |
* Past performance is not predictive of future results. The performance tables and graph do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption/sale of Fund shares.
** Since Fund’s inception on 1/29/21.
5
Discount & Premium Information
Information regarding how often shares of the Fund traded on the New York Stock Exchange Arca at a price above, i.e., at a premium, or below, i.e., at a discount, the NAV can be found at www.gabelli.com/funds/etfs.
Information showing the Fund’s net asset value, market price, premiums and discounts, and bid-ask spreads for various time periods is available by visiting the Fund’s website at www.gabelli.com/funds/etfs.
This ETF is different from traditional ETFs. Traditional ETFs tell the public what assets they hold each day. This ETF will not. This may create additional risks for your investment. For example:
● | You may have to pay more money to trade the ETF’s shares. This ETF will provide less information to traders, who tend to charge more for trades when they have less information. |
● | The price you pay to buy ETF shares on an exchange may not match the value of the ETF’s portfolio. The same is true when you sell shares. These price differences may be greater for this ETF compared with other ETFs because it provides less information to traders. |
● | These additional risks may be even greater in bad or uncertain market conditions. |
The differences between this ETF and other ETFs may also have advantages. By keeping certain information about the ETF secret, this ETF may face less risk that other traders can predict or copy its investment strategy. This may improve the ETF’s performance. If other traders are able to copy or predict the ETF’s investment strategy, however, this may hurt the ETF’s performance. For additional information regarding the unique attributes and risks of the ETF, see the Active Shares prospectus/registration statement.
6
Gabelli Love Our Planet & People ETF
Disclosure of Fund Expenses (Unaudited)
For the Six Months Period from July 1, 2022 through December 31, 2022 | Expense Table |
We believe it is important for you to understand the impact of fees and expenses regarding your investment. All funds have operating expenses. As a shareholder of a fund, you incur two types of costs, transaction costs, which include brokerage commissions on purchases and sales of fund shares, and ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of a fund. When a fund’s expenses are expressed as a percentage of its average net assets, this figure is known as the expense ratio. The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with those of other funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.
The Expense Table below illustrates your Fund’s costs in two ways:
Actual Fund Return: This section provides information about actual account values and actual expenses. You may use this section to help you to estimate the actual expenses that you paid over the period after any fee waivers and expense reimbursements. The “Ending Account Value” shown is derived from the Fund’s actual return during the past six months ended December 31, 2022, and the “Expenses Paid During Period” shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period.
To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your Fund under the heading “Expenses Paid During Period” to estimate the expenses you paid during this period.
Hypothetical 5% Return: This section provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio. It assumes a hypothetical annualized return of 5% before expenses during the period shown. In this case – because the hypothetical return used is not the Fund’s actual return – the results do
not apply to your investment and you cannot use the hypothetical account value and expense to estimate the actual ending account balance or expenses you paid for the period. This example is useful in making comparisons of the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs such as sales charges (loads), redemption fees, or exchange fees, if any, which would be described in the Prospectus. If these costs were applied to your account, your costs would be higher. Therefore, the 5% hypothetical return is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. The “Annualized Expense Ratio” represents the actual expenses for the last six months and may be different from the expense ratio in the Financial Highlights which is for the period ended December 31, 2022.
|
Beginning Account Value 07/01/22 |
Ending Account Value 12/31/22 |
Annualized Expense Ratio |
Expenses Paid During Period* |
Gabelli Love Our Planet & People ETF | ||||
Actual Fund Return | ||||
$1,000.00 | $1,088.70 | 0.00% | $0.00 | |
Hypothetical 5% Return | ||||
$1,000.00 | $1,025.21 | 0.00% | $0.00 |
* | Expenses are equal to the Fund’s annualized expense ratio for the last six months multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (184 days), then divided by 365. |
7
Summary of Portfolio Holdings (Unaudited)
The following table presents portfolio holdings as a percent of net assets as of December 31, 2022:
GABELLI LOVE OUR PLANET & PEOPLE ETF
Energy and Utilities | 15.5 | % | |
Environmental Services | 11.6 | % | |
Equipment and Supplies | 9.6 | % | |
U.S. Government Obligations | 9.2 | % | |
Machinery | 9.0 | % | |
Financial Services | 6.0 | % | |
Electronics | 5.7 | % | |
Building and Construction | 5.7 | % | |
Health Care | 5.6 | % | |
Specialty Chemicals | 4.7 | % | |
Diversified Industrial | 4.3 | % | |
Automotive Parts and Accessories | 4.0 | % | |
Real Estate Investment Trust | 3.1 | % | |
Technology Services | 2.1 | % | |
Consumer Products | 1.7 | % | |
Business Services | 1.7 | % | |
Metals and Mining | 1.2 | % | |
Banking | 1.1 | % | |
Other Assets and Liabilities (Net) | (1.8 | )% | |
100.0 | % |
The Fund files a complete schedule of portfolio holdings with the Securities and Exchange Commission (the SEC) for the first and third quarters of each fiscal year on Form N-PORT. Shareholders may obtain this information at www.gabelli.com or by calling the Fund at 800-GABELLI (800-422-3554). The Fund’s Form N-PORT is available on the SEC’s website at www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330.
Proxy Voting
The Fund files Form N-PX with its complete proxy voting record for the twelve months ended June 30, no later than August 31 of each year. A description of the Fund’s proxy voting policies, procedures, and how each Fund voted proxies relating to portfolio securities is available without charge, upon request, by (i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC’s website at www.sec.gov.
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Gabelli Love Our Planet & People ETF
Schedule of Investments — December 31, 2022
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS – 92.6% | ||||||||||||
Automotive Parts and Accessories – 4.0% | ||||||||||||
1,505 | Cummins Inc. | $ | 343,573 | $ | 364,646 | |||||||
9,000 | Dana Inc. | 174,324 | 136,170 | |||||||||
517,897 | 500,816 | |||||||||||
Banking – 1.1% | ||||||||||||
22,273 | Banco Bilbao Vizcaya | |||||||||||
Argentaria SA, ADR | 123,914 | 133,861 | ||||||||||
Building and Construction – 5.7% | ||||||||||||
2,500 | Carrier Global Corp. | 107,648 | 103,125 | |||||||||
5,300 | Gibraltar Industries Inc.† | 253,113 | 243,164 | |||||||||
5,700 | Johnson Controls International plc† | 303,977 | 364,800 | |||||||||
664,738 | 711,089 | |||||||||||
Business Services – 1.7% | ||||||||||||
13,000 | Resideo Technologies Inc.† | 307,466 | 213,850 | |||||||||
Consumer Products – 1.7% | ||||||||||||
4,302 | Unilever plc, ADR | 232,540 | 216,606 | |||||||||
Diversified Industrial – 4.3% | ||||||||||||
12,750 | ABB Ltd., ADR | 372,652 | 388,365 | |||||||||
3,800 | AZZ Inc. | 160,657 | 152,760 | |||||||||
533,309 | 541,125 | |||||||||||
Electronics – 5.7% | ||||||||||||
6,000 | Chargepoint Holdings Inc.† | 51,109 | 57,180 | |||||||||
20,000 | Flex Ltd.† | 348,807 | 429,200 | |||||||||
35,000 | Mirion Technologies Inc.† | 291,176 | 231,350 | |||||||||
691,092 | 717,730 | |||||||||||
Energy and Utilities – 15.5% | ||||||||||||
1,632 | American Water Works Co. Inc. | 262,600 | 248,750 | |||||||||
6,007 | Avangrid Inc. | 279,729 | 258,181 | |||||||||
8,900 | Brookfield Renewable Corp., Cl. A | 402,396 | 245,106 | |||||||||
6,422 | Enviva Inc. | 351,192 | 340,173 | |||||||||
3,665 | NextEra Energy Inc. | 286,973 | 306,394 | |||||||||
5,700 | NextEra Energy Partners LP | 448,700 | 399,513 | |||||||||
2,138 | Xcel Energy Inc. | 140,204 | 149,895 | |||||||||
2,171,794 | 1,948,012 | |||||||||||
Environmental Services – 11.6% | ||||||||||||
37,000 | Ardagh Metal Packaging SA† | 342,301 | 177,970 | |||||||||
3,000 | Darling Ingredients, Inc.† | 206,150 | 187,770 |
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
6,414 | Evoqua Water Technologies Corp.† | $ | 202,510 | $ | 253,994 | |||||||
2,756 | Republic Services Inc. | 284,863 | 355,497 | |||||||||
3,600 | Waste Connections Inc. | 381,301 | 477,216 | |||||||||
1,417,125 | 1,452,447 | |||||||||||
Equipment and Supplies – 9.6% | ||||||||||||
1,700 | Crown Holdings Inc. | 148,364 | 139,757 | |||||||||
2,400 | Hubbell Inc. | 422,864 | 563,232 | |||||||||
400 | Preformed Line Products Co. | 35,369 | 33,316 | |||||||||
3,070 | The Timken Co. | 222,836 | 216,957 | |||||||||
750 | Valmont Industries Inc. | 169,995 | 248,002 | |||||||||
999,428 | 1,201,264 | |||||||||||
Financial Services – 6.0% | ||||||||||||
5,488 | Franklin Resources Inc. | 156,343 | 144,774 | |||||||||
6,500 | ING Groep NV, ADR | 59,220 | 79,105 | |||||||||
5,104 | Janus Henderson Group plc† | 165,476 | 120,046 | |||||||||
1,200 | S&P Global Inc. | 433,118 | 401,928 | |||||||||
814,157 | 745,853 | |||||||||||
Health Care – 5.6% | ||||||||||||
4,500 | Baxter International Inc. | 328,414 | 229,365 | |||||||||
635 | BioMarin Pharmaceutical Inc.† | 49,818 | 65,716 | |||||||||
2,850 | Bristol-Myers Squibb Co. | 176,809 | 205,058 | |||||||||
550 | Illumina Inc.† | 152,554 | 111,210 | |||||||||
900 | Royalty Pharma plc, Cl. A† | 38,356 | 35,568 | |||||||||
171 | Vertex Pharmaceuticals Inc.† | 38,341 | 49,381 | |||||||||
784,292 | 696,298 | |||||||||||
Machinery – 9.0% | ||||||||||||
21,000 | CNH Industrial NV† | 251,362 | 337,260 | |||||||||
875 | Deere & Co. | 292,434 | 375,165 | |||||||||
3,750 | Xylem Inc. | 369,409 | 414,637 | |||||||||
913,205 | 1,127,062 | |||||||||||
Metals and Mining – 1.2% | ||||||||||||
7,800 | Livent Corp.† | 179,905 | 154,986 | |||||||||
Real Estate Investment Trust – 3.1% | ||||||||||||
12,500 | Weyerhaeuser Co. | 443,174 | 387,500 | |||||||||
Specialty Chemicals – 4.7% | ||||||||||||
1,200 | Air Products and Chemicals Inc. | 300,769 | 369,912 | |||||||||
7,000 | American Vanguard Corp. | 137,453 | 151,970 |
See accompanying notes to financial statements.
9
Gabelli Love Our Planet & People ETF
Schedule of Investments (Continued) — December 31, 2022
Market | ||||||||||||
Shares | Cost | Value | ||||||||||
COMMON STOCKS (Continued) | ||||||||||||
Specialty Chemicals (Continued) | ||||||||||||
600 | Rogers Corp.† | $ | 71,504 | $ | 71,604 | |||||||
509,726 | 593,486 | |||||||||||
Technology Services – 2.1% | ||||||||||||
3,000 | Alphabet Inc., Cl. C† | 321,021 | 266,190 | |||||||||
TOTAL COMMON STOCKS | 11,624,783 | 11,608,175 |
Principal | ||||||||||||
Amount | ||||||||||||
U.S. GOVERNMENT OBLIGATIONS – 9.2% | ||||||||||||
$ | 1,160,000 | U.S. Treasury Bills, 3.67% to 4.20%††, 01/12/23 to 03/30/23 | 1,152,716 | 1,152,924 | ||||||||
TOTAL INVESTMENTS — 101.8% | $ | 12,777,499 | 12,761,099 | |||||||||
Other Assets and Liabilities (Net) — (1.8)% | (225,010 | ) | ||||||||||
NET ASSETS — 100.0% | $ | 12,536,089 |
† | Non-income producing security. |
†† | Represents annualized yields at dates of purchase. |
ADR | American Depositary Receipt |
See accompanying notes to financial statements.
10
Gabelli Love Our Planet & People ETF
Statement of Assets and Liabilities
December 31, 2022
Assets: | ||||
Investments at value (cost $12,777,499) | $ | 12,761,099 | ||
Cash | 10,461 | |||
Dividends receivable | 16,036 | |||
Total Assets | 12,787,596 | |||
Liabilities: | ||||
Distributions payable | 251,507 | |||
Total Liabilities | 251,507 | |||
Net Assets | $ | 12,536,089 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 13,278,905 | ||
Total accumulated loss | (742,816 | ) | ||
Net Assets | $ | 12,536,089 | ||
Shares of Beneficial Interest issued and outstanding, no par value; unlimited number of shares authorized | 510,000 | |||
Net Asset Value per share: | $ | 24.58 |
Statement of Operations
For the Year Ended December 31, 2022
Investment Income: | ||||
Dividends (net of foreign withholding taxes of $10,532) | $ | 245,613 | ||
Interest | 13,406 | |||
Total Investment Income | 259,019 | |||
Expenses: | ||||
Investment advisory fees | 112,333 | |||
Total Expenses | 112,333 | |||
Less: | (112,333 | ) | ||
Expenses waived by Adviser (See Note 3) | (112,333 | ) | ||
Net Expenses | — | |||
Net Investment Income | 259,019 | |||
Net Realized and Unrealized Gain/(Loss) on Investments | ||||
Net realized loss on investments | (740,098 | ) | ||
Net change in unrealized depreciation on investments | (1,420,760 | ) | ||
Net Realized and Unrealized (Loss) on Investments | (2,160,858 | ) | ||
Net Decrease in Net Assets Resulting from Operations | $ | (1,901,839 | ) |
See accompanying notes to financial statements.
11
Gabelli Love Our Planet & People ETF
Statement of Changes in Net Assets
Year Ended December 31, 2022 | For the Period Ended December 31, 2021(a) | |||||||
Operations: | ||||||||
Net investment income | $ | 259,019 | $ | 133,701 | ||||
Net realized loss on investments | (740,098 | ) | (5,497 | ) | ||||
Net change in unrealized appreciation/(depreciation) on investments | (1,420,760 | ) | 1,404,360 | |||||
Net Increase/(Decrease) in Net Assets Resulting from Operations | (1,901,839 | ) | 1,532,564 | |||||
Distributions to Shareholders: | ||||||||
Accumulated earnings | (234,171 | ) | (141,996 | ) | ||||
Return of capital | (17,336 | ) | — | |||||
Total Distributions to Shareholders | (251,507 | ) | (141,996 | ) | ||||
Shares of Beneficial Interest Transactions: | ||||||||
Proceeds from sales of shares (See Note 6) | 3,319,195 | 9,979,672 | ||||||
Net Increase in Net Assets from Shares of Beneficial Interest Transactions | 3,319,195 | 9,979,672 | ||||||
Net Increase in Net Assets | 1,165,849 | 11,370,240 | ||||||
Net Assets: | ||||||||
Beginning of period | 11,370,240 | — | ||||||
End of period | $ | 12,536,089 | $ | 11,370,240 | ||||
Changes in Shares Outstanding: | ||||||||
Shares outstanding, beginning of period | 385,000 | — | ||||||
Shares sold | 125,000 | 385,000 | ||||||
Shares outstanding, end of period | 510,000 | 385,000 |
(a) | The Fund commenced investment operations on February 1, 2021. |
See accompanying notes to financial statements.
12
Gabelli Love Our Planet & People ETF
Financial Highlights
Selected data for a share of beneficial interest outstanding throughout the period:
Year Ended December 31, 2022 | Period Ended December 31, 2021(a) | |||||||
Operating Performance: | ||||||||
Net Asset Value, Beginning of Period | $ | 29.53 | $ | 25.00 | ||||
Net Investment Income(b) | 0.53 | 0.39 | ||||||
Net Realized and Unrealized Gain/(Loss) on Investments | (4.99 | ) | 4.51 | |||||
Total from Investment Operations | (4.46 | ) | 4.90 | |||||
Distributions to Shareholders: | (0.46 | ) | (0.3688 | ) | ||||
Net Investment Income | (0.46 | ) | (0.37 | ) | ||||
Return of Capital | (0.03 | ) | — | |||||
Total Distributions | (0.49 | ) | (0.37 | ) | ||||
Net Asset Value, End of Period | $ | 24.58 | $ | 29.53 | ||||
NAV total return† | (15.08 | )% | 19.62 | % | ||||
Market price, End of Period | $ | 24.58 | $ | 29.51 | ||||
Investment total return† † | (15.02 | )% | 19.52 | % | ||||
Net Assets, End of Period (in 000’s) | $ | 12,536 | $ | 11,370 | ||||
Ratio to average net assets of: | ||||||||
Net Investment Income | 2.08 | % | 1.51 | %(c) | ||||
Operating Expenses Before Waiver | 0.90 | % | 0.90 | %(c) | ||||
Operating Expenses Net of Waiver | 0.00 | % | 0.00 | %(c) | ||||
Portfolio Turnover Rate | 19 | % | 13 | % |
† | Total return represents aggregate total return of a hypothetical investment at the beginning of the period and sold at the end of the period. Total return for a period of less than one year is not annualized. |
†† | Based on market price per share. Total return for a period of less than one year is not annualized. |
(a) | The Fund commenced investment operations on February 1, 2021. |
(b) | Per share data are calculated using the average shares outstanding method. |
(c) | Annualized. |
See accompanying notes to financial statements.
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Gabelli Love Our Planet & People ETF
Notes to Financial Statements
1. Organization. The Gabelli ETFs Trust (the Trust) was organized on July 26, 2018 as a Delaware statutory trust and Gabelli Love Our Planet & People ETF (the Fund) commenced investment operations on February 1, 2021. The Fund is a diversified open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act). The Fund is an actively managed ETF, whose investment objective is to provide capital appreciation.
2. Significant Accounting Policies. As an investment company, the Fund follows the investment company accounting and reporting guidance, which is part of U.S. generally accepted accounting principles (GAAP) that may require the use of management estimates and assumptions in the preparation of its financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
The global outbreak of the novel coronavirus disease, known as COVID-19, has caused adverse effects on many companies, sectors, nations, regions, and the markets in general, and may continue for an unpredictable duration. The effects of this pandemic may materially impact the value and performance of the Fund, its ability to buy and sell fund investments at appropriate valuations, and its ability to achieve its investment objectives.
Security Valuation. Portfolio securities listed or traded on a nationally recognized securities exchange or traded in the U.S. over-the-counter market for which market quotations are readily available are valued at the last quoted sale price or a market’s official closing price as of the close of business on the day the securities are being valued. If there were no sales that day, the security is valued at the average of the closing bid and asked prices or, if there were no asked prices quoted on that day, then the security is valued at the closing bid price on that day. If no bid or asked prices are quoted on such day, the security is valued at the most recently available price or, if the Board of Trustees (the Board) so determines, by such other method as the Board shall determine in good faith to reflect its fair market value. Portfolio securities traded on more than one national securities exchange or market are valued according to the broadest and most representative market, as determined by Gabelli Funds, LLC (the Adviser).
Securities and assets for which market quotations are not readily available are fair valued as determined by the Board. Fair valuation methodologies and procedures may include, but are not limited to: analysis and review of available financial and non-financial information about the company; comparisons with the valuation and changes in valuation of similar securities, including a comparison of foreign securities with the equivalent U.S. dollar value American Depositary Receipt securities at the close of the U.S. exchange; and evaluation of any other information that could be indicative of the value of the security.
The inputs and valuation techniques used to measure fair value of the Fund’s investments are summarized into three levels as described in the hierarchy below:
● | Level 1 — quoted prices in active markets for identical securities; |
● | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.); and |
● | Level 3 — significant unobservable inputs (including the Board’s determinations as to the fair value of investments). |
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input both individually and in the aggregate that is significant to the fair value measurement. The inputs or methodology
14
Gabelli Love Our Planet & People ETF
Notes to Financial Statements (Continued)
used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The summary of the Fund’s investments in securities by inputs used to value the Fund’s investments as of December 31, 2022 is as follows:
Valuation Inputs | ||||||||||||
INVESTMENTS IN SECURITIES: | Level 1 Quoted Prices | Level 2 Significant Unobservable Inputs | Total Market Value at 12/31/22 | |||||||||
ASSETS (Market Value): | ||||||||||||
Common Stocks (a) | $ | 11,608,175 | — | $ | 11,608,175 | |||||||
U.S. Government Obligations | — | $ | 1,152,924 | $ | 1,152,924 | |||||||
TOTAL INVESTMENTS IN SECURITIES – ASSETS | $ | 11,608,175 | $ | 1,152,924 | $ | 12,761,099 |
(a) | Please refer to the Schedule of Investments for the industry classifications of these portfolio holdings. |
There were no Level 3 investments held at December 31, 2022 or December 31, 2021.
Additional Information to Evaluate Qualitative Information
General. The Fund uses recognized industry pricing services – approved by the Board and unaffiliated with the Adviser to value most of its securities, and uses broker quotes provided by market makers of securities not valued by these and other recognized pricing sources. Several different pricing feeds are received to value domestic equity securities, international equity securities, preferred equity securities, and fixed income securities. The data within these feeds are ultimately sourced from major stock exchanges and trading systems where these securities trade. The prices supplied by external sources are checked by obtaining quotations or actual transaction prices from market participants. If a price obtained from the pricing source is deemed unreliable, prices will be sought from another pricing service or from a broker/dealer that trades that security or similar securities.
Fair Valuation. Fair valued securities may be common and preferred equities, warrants, options, rights, and fixed income obligations. Where appropriate, Level 3 securities are those for which market quotations are not available, such as securities not traded for several days, or for which current bids are not available, or which are restricted as to transfer. When fair valuing a security, factors to consider are recent prices of comparable securities that are publicly traded, reliable prices of securities not publicly traded, and the use of valuation models, current analyst reports, valuing the income or cash flow of the issuer, or cost if the preceding factors do not apply. A significant change in the unobservable inputs could result in a lower or higher value in Level 3 securities. The circumstances of Level 3 securities are frequently monitored to determine if fair valuation measures continue to apply.
The Adviser reports quarterly to the Board the results of the application of fair valuation policies and procedures. These may include back testing the prices realized in subsequent trades of these fair valued securities to fair values previously recognized.
Foreign Taxes. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests.
15
Gabelli Love Our Planet & People ETF
Notes to Financial Statements (Continued)
Securities Transactions and Investment Income. Securities transactions are accounted for on the trade date with realized gain/(loss) on investments determined by using the identified cost method. Interest income (including amortization of premium and accretion of discount) is recorded on an accrual basis. Premiums and discounts on debt securities are amortized using the effective yield to maturity method. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities that are recorded as soon after the ex-dividend date as the Fund becomes aware of such dividends.
Distributions to Shareholders. Distributions to shareholders are recorded on the ex-dividend date. Distributions to shareholders are based on income and capital gains as determined in accordance with federal income tax regulations, which may differ from income and capital gains as determined under GAAP. These differences are primarily due to differing treatments of income and gains on various investment securities held by a Fund and timing differences. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, adjustments are made to the appropriate capital accounts in the period when the differences arise. Permanent differences were primarily due to Return of capital and REIT adjustments. These reclassifications have no impact on the NAV of the Fund.
The tax character of distributions paid during the year ended December 31, 2022 was as follows:
Year Ended December 31, 2022 | Year Ended December 31, 2021 | |||||||
Distributions paid from: | ||||||||
Ordinary income | $ | 234,171 | $ | 141,996 | ||||
Return of capital | 17,336 | – | ||||||
Total distributions paid | $ | 251,507 | $ | 141,996 |
Provision for Income Taxes. The Fund qualifies as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code). It is the policy of the Fund to comply with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of the Fund’s net investment company taxable income and net capital gains on an annual basis. Therefore, no provision for federal income taxes is required.
At December 31, 2022, the components of accumulated earnings/losses on a tax basis were as follows:
Accumulated capital loss carryforwards | $ | (707,519 | ) | |
Unrealized depreciation on investments | (35,297 | ) | ||
Total accumulated losses | $ | (742,816 | ) |
At December 31, 2022, the Fund had net capital loss carryforwards for federal income tax purposes which are available to reduce future required distributions of net capital gains to shareholders. The Fund is permitted to carry capital losses forward for an unlimited period. Capital losses that are carried forward will retain their character as either short term or long term capital losses.
Short term capital loss carryforward with no expiration | $ | 228,226 | ||
Long term capital loss carryforward with no expiration | 479,293 | |||
Total Capital Loss Carryforward | $ | 707,519 |
At December 31, 2022, the temporary difference between book basis and tax basis net unrealized appreciation/depreciation on investments were primarily due to non-REIT return of capital and deferral of losses from wash sales for tax purposes.
16
Gabelli Love Our Planet & People ETF
Notes to Financial Statements (Continued)
The following summarizes the tax cost on investments and the net unrealized depreciation at December 31, 2022:
Gross | Gross | Net | ||||||||||||||||
Unrealized | Unrealized | Unrealized | ||||||||||||||||
Cost | Appreciation | Depreciation | Depreciation | |||||||||||||||
Investments | $ | 12,796,396 | $ | 1,131,752 | $ | (1,167,049 | ) | $ | (35,297 | ) |
The Fund is required to evaluate tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Income tax and related interest and penalties would be recognized by the Fund as tax expense in the Statement of Operations if the tax positions were deemed not to meet the more-likely-than-not threshold. For the year ended December 31, 2022, the Fund did not incur any income tax, interest, or penalties. The Fund’s federal and state tax returns will remain open and subject to examination for three years. On an ongoing basis, the Adviser will monitor the Fund’s tax positions to determine if adjustments to these conclusions are necessary.
3. Investment Advisory Agreement and Other Transactions. Pursuant to an Investment Advisory Agreement with the Trust, the Adviser manages the investment of the Fund’s assets. Under the Investment Advisory Agreement, the Fund will pay the Adviser a fee, computed daily and paid monthly, at the annual rate of 0.90% of the value of its average daily net assets and the Adviser is responsible for substantially all expenses of the Fund, except (i) interest and taxes; (ii) brokerage commissions and other expenses connected with the execution of portfolio transactions; (iii) distribution fees; (iv) the advisory fee payable to the Adviser; and (v) litigation expenses and any extraordinary expenses.
The Adviser has contractually agreed to waive its investment advisory fee of 0.90% on the first $100 million in net assets (the Fee Waiver). The Fee Waiver will continue until at least April 30, 2023, and shall not apply to any brokerage costs, acquired Fund fees and expenses, interest, taxes, and extraordinary expenses that the Fund may incur. This agreement may be terminated only by, or with the consent of, the Fund’s Board of Trustees.
During the year ended December 31, 2022, the Adviser waived expenses in the amount of $112,333.
4. Portfolio Securities. Purchases and sales of securities during the year ended December 31, 2022, other than short term securities and U.S. Government obligations, aggregated $2,190,692 and $2,807,112, respectively.
5. Capital Share Transactions. Capital shares are issued and redeemed by the Fund only in aggregations of a specified number of shares or multiples thereof (Creation Units) at NAV, in return for securities, other instruments, and/or cash (the Basket). Except when aggregated in Creation Units, shares of the Fund are not redeemable. Transactions in capital shares for the Fund are disclosed in detail in the Statement of Changes in Net Assets. Purchasers and redeemers of Creation Units are charged a transaction fee to cover the estimated cost to the Fund of processing the purchase or redemption, including costs charged to it by the NSCC (National
17
Gabelli Love Our Planet & People ETF
Notes to Financial Statements (Continued)
Securities Clearing Corporation) or DTC (Depository Trust Company), and the estimated transaction costs, e.g., brokerage commissions, bid-ask spread, and market impact trading costs, incurred in converting the Basket to or from the desired portfolio composition. The transaction fee is determined daily and will be limited to amounts approved by the Board and determined by the Adviser to be appropriate to defray the expenses that the Fund incurs in connection with the purchase or redemption. The purpose of transaction fees is to protect the Fund’s existing shareholders from the dilutive costs associated with the purchase and redemption of Creation Units. The amount of transaction fees will differ depending on the estimated trading costs for portfolio positions and Basket processing costs and other considerations. Transaction fees may include fixed amounts per creation or redemption transactions, amounts varying with the number of Creation Units purchased or redeemed, and varying amounts based on the time an order is placed. The Fund may impose higher transaction fees when cash is substituted for Basket instruments. Higher transaction fees may apply to purchases and redemptions through the DTC than through the NSCC.
6. Subscriptions–in–kind. When considered to be in the best interest of all shareholders, the Fund may accept portfolio securities as payment for the purchase of Fund shares (subscriptions-in-kind). For financial reporting and tax purposes, the cost basis of contributed securities is equal to the market value of the securities on the date of contribution. Subscriptions-in-kind result in no gain or loss and no tax consequences for the Fund. During the year ended December 31, 2022, the Fund accepted $3,319,195 of subscriptions in-kind, including cash of $89,592.
7. Transactions with Affiliates and Other Arrangements. During the year ended December 31, 2022, the Fund paid $987 in brokerage commissions on security trades to G.research, LLC, an affiliate of the Adviser.
The Adviser pays retainer and per meeting fees to Trustees not affiliated with the Adviser, plus specified amounts to the Lead Trustee and Audit Committee Chairman. Trustees are also reimbursed for out of pocket expenses incurred in attending meetings. Trustees who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Trust.
8. Significant Shareholder. As of December 31, 2022, the Fund’s Adviser and its affiliates beneficially owned 81.9% of the voting securities of the Fund.
9. Indemnifications. The Fund enters into contracts that contain a variety of indemnifications. The Fund’s maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts. Management has reviewed the Fund’s existing contracts and expects the risk of loss to be remote.
10. Subsequent Events. Management has evaluated the impact on the Fund of all subsequent events occurring through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.
18
Gabelli Love Our Planet & People ETF
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Gabelli ETFs Trust and Shareholders of Gabelli Love Our Planet & People ETF:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Gabelli Love Our Planet & People ETF (one of the funds constituting Gabelli ETFs Trust, referred to hereafter as the “Fund”) as of December 31, 2022, the related statement of operations for the year ended December 31, 2022, and the statement of changes in net assets and the financial highlights for the year ended December 31, 2022 and for the period February 1, 2021 (commencement of operations) through December 31, 2021, including the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2022, the results of its operations for the year ended December 31, 2022, and the changes in its net assets and the financial highlights for the year ended December 31, 2022 and for the period February 1, 2021 (commencement of operations) through December 31, 2021 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of December 31, 2022, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
New York, New York
March 1, 2023
We have served as the auditor of one or more investment companies in the Gabelli Fund Complex since 1986.
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Gabelli Love Our Planet & People ETF
Liquidity Risk Management Program (Unaudited)
In accordance with Rule 22e-4 under the 1940 Act, the Fund has established a liquidity risk management program (the LRM Program) to govern its approach to managing liquidity risk. The LRM Program is administered by the Liquidity Committee (the Committee), which is comprised of members of Gabelli Funds, LLC management. The Board has designated the Committee to administer the LRM Program.
The LRM Program’s principal objectives include supporting the Fund’s compliance with limits on investments in illiquid assets and mitigating the risk that the Fund will be unable to meet its redemption obligations in a timely manner. The LRM Program also includes elements that support the management and assessment of liquidity risk, including an annual assessment of factors that influence the Fund’s liquidity and the monthly classification and re-classification of certain investments that reflect the Committee’s assessment of their relative liquidity under current market conditions.
At a meeting of the Board held on August 16, 2022, the Board received a written report from the Committee regarding the design and operational effectiveness of the LRM Program. The Committee determined, and reported to the Board, that the LRM Program is reasonably designed to assess and manage the Fund’s liquidity risk and has operated adequately and effectively since its implementation. The Committee reported that there were no liquidity events that impacted the Fund or its ability to timely meet redemptions without dilution to existing shareholders. The Committee noted that the Fund is primarily invested in highly liquid securities and, accordingly, continues to be exempt from the requirement to determine a “highly liquid investment minimum” as defined in the Rule 22e-4. Because of that continued qualification for the exemption, the Fund has not adopted a “highly liquid investment minimum” amount. The Committee further noted that while changes to the LRM Program were made during the Review Period and reported to the Board, no material changes were made to the LRM Program as a result of the Committee’s annual review.
There can be no assurance that the LRM Program will achieve its objectives in the future. Please refer to the Fund’s Prospectus for more information regarding its exposure to liquidity risk and other principal risks to which an investment in the Fund may be subject.
20
Gabelli Love Our Planet & People ETF
Additional Fund Information (Unaudited)
The business and affairs of the Fund are managed under the direction of the Fund’s Board of Trustees. Information pertaining to the Trustees and officers of the Fund is set forth below. The Fund’s Statement of Additional Information includes additional information about the Fund’s Trustees and is available without charge, upon request, by calling 800-GABELLI (800-422-3554) or by writing to Gabelli Love Our Planet & People ETF at One Corporate Center, Rye, NY 10580-1422.
Name, Position(s) Address1 and Year of Birth | Term of Office and Length of Time Served2 | Number of Funds in Fund Complex Overseen by Trustee3 | Principal Occupation(s) During Past Five Years | Other Directorships Held by Trustee4 | ||||
INTERESTED TRUSTEES5: | ||||||||
Christopher J. Marangi Trustee 1974 | Since 2021 | 5 | Managing Director and Co-Chief Investment Officer of the Value team of GAMCO Investors, Inc.; Portfolio Manager for Gabelli Funds, LLC and GAMCO Asset Management Inc. | — | ||||
Agnes Mullady Trustee 1958 | Since 2021 | 13 | Senior Vice President of GAMCO Investors, Inc. (2008 - 2019); Executive Vice President of Associated Capital Group, Inc. (November 2016 - 2019); President and Chief Operating Officer of the Fund Division of Gabelli Funds, LLC (2010 - 2019); Vice President of Gabelli Funds, LLC (2006 - 2019); Chief Executive Officer of G.distributors, LLC (2011 - 2019); and an officer of all of the Gabelli/ Teton Funds (2006 - 2019) | — | ||||
INDEPENDENT TRUSTEES6: | ||||||||
John Birch Trustee 1950 | Since 2021 | 8 | Partner, The Cardinal Partners Global; Chief Operating Officer of Sentinel Asset Management and Chief Financial Officer and Chief Risk Officer of Sentinel Group Funds (2005-2015) | — | ||||
Anthony S. Colavita7 Trustee 1961 | Since 2021 | 22 | Attorney, Anthony S. Colavita, P.C., Supervisor, Town of Eastchester, NY | — | ||||
Michael J. Ferrantino7 Trustee 1971 | Since 2021 | 6 | Chief Executive Officer of InterEx Inc. | President, CEO, and Director of LGL Group; Director of LGL Systems Acquisition Corp. (Aerospace and Defense Communications) |
21
Gabelli Love Our Planet & People ETF
Additional Fund Information (Unaudited) (Continued)
Name, Position(s) Address1 and Year of Birth | Term of Office and Length of Time Served2 | Number of Funds in Fund Complex Overseen by Trustee3 | Principal Occupation(s) During Past Five Years | Other Directorships Held by Trustee4 | ||||
Leslie F. Foley7 Trustee 1968 |
Since 2021 | 15 | Attorney; Serves on the Boards of the Addison Gallery of American Art at Phillips Academy Andover, Vice President, Global Ethics & Compliance and Associate General Counsel for News Corporation (2008-2010) | — | ||||
Michael J. Melarkey Trustee 1949 |
Since 2021 | 23 | Of Counsel in the law firm of McDonald Carano Wilson LLP; Partner in the law firm of Avansino, Melarkey, Knobel, Mulligan & McKenzie (1980-2015) | Chairman of Southwest Gas Corporation (natural gas utility) | ||||
Kuni Nakamura Trustee 1968 |
Since 2021 | 36 | President of Advanced Polymer, Inc. (chemical manufacturing company); President of KEN Enterprises, Inc. (real estate); Trustee on Long Island University Board of Trustees; Trustee on Fordham Preparatory School Board of Trustees | — | ||||
Salvatore J. Zizza7,8 Trustee 1945 |
Since 2021 | 34 | President of Zizza & Associates Corp. (private holding company); Chairman of Bergen Cove Realty Inc. (residential real estate) | Director and Chairman of Trans-Lux Corporation (business services); Director and Chairman of Harbor Diversified Inc. (pharmaceuticals) (2009-2018); Retired Chairman of BAM (semiconductor and aerospace manufacturing) |
22
Gabelli Love Our Planet & People ETF
Additional Fund Information (Unaudited) (Continued)
Name, Position(s) Address1 and Year of Birth |
Term of Office and Length of Time Served2 |
Principal Occupation(s) During Past Five Years | ||
OFFICERS: | ||||
John C. Ball President 1976 |
Since 2021 | Officer of registered investment companies within the Gabelli Fund Complex since 2017; Vice President and Assistant Treasurer of AMG Funds, 2014-2017; Chief Executive Officer, G.distributors, LLC since December 2020 | ||
Peter Goldstein Secretary and Vice President 1953 |
Since 2021 | General Counsel, GAMCO Investors, Inc. and Chief Legal Officer, Associated Capital Group, Inc. since 2021; General Counsel and Chief Compliance Officer, Buckingham Capital Management, Inc. (2012-2020); Chief Legal Officer and Chief Compliance Officer, The Buckingham Research Group, Inc. (2012-2020) | ||
Chandler Iorio Treasurer 1986 |
Since 2021 | Vice President of GAMCO Investors, Inc. (since 2019); Assistant Treasurer for Gabelli NextShares (2016-2019); Senior Fund Administrator for Gabelli Fund Complex (2011-2016) | ||
Richard J. Walz Chief Compliance Officer 1959 |
Since 2021 | Chief Compliance Officer of registered investment companies within the Fund Complex since 2013 |
1 | Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted. |
2 | Each Trustee will hold office for an indefinite term until the earliest of (i) the next meeting of shareholders if any, called for the purpose of considering the election or re-election of such Trustee and until the election and qualification of his or her successor, if any, elected at such meeting, or (ii) the date a Trustee resigns or retires, or a Trustee is removed by the Board or shareholders, in accordance with the Company By-Laws and Declaration of Trust. For officers, includes time served in prior officer positions with the Trust. Each officer will hold office for an indefinite term or until the date he or she resigns or retires or until his or her successor is elected and qualified. |
3 | The “Fund Complex” or the “Gabelli Fund Complex” includes all the U.S. registered investment companies that are considered part of the same Fund complex as the Fund because they have common or affiliated investment advisers. |
4 | This column includes only directorships of companies required to report to the SEC under the Securities Exchange Act of 1934 (the “1934 Act”), as amended, i.e. public companies, or other investment companies registered under the 1940 Act. |
5 | “Interested persons” of a Fund as defined in the 1940 Act. Mr. Christopher J. Marangi and Ms. Agnes Mullady are considered to be “interested persons” because of their affiliation with the Trust’s Adviser. |
6 | Trustees who are not considered to be “interested persons” of a Fund as defined in the 1940 Act are considered to be Independent Trustees. |
7 | Mr. Colavita’s father, Anthony J. Colavita, and Ms. Foley’s father, Frank J. Fahrenkopf, Jr., serve as directors of other funds in the Gabelli Fund Complex. Mr. Ferrantino is the President, CEO and a Director of the LGL Group, Inc. and a Director of LGL Systems Acquisition Corp., Mr. Zizza is an independent director of Gabelli International Ltd., and Mr. Birch is a director of Gabelli Merger Plus+ Trust Plc, GAMCO International SICAV, Gabelli Associates Limited, and Gabelli Associates Limited IIE, all of which may be deemed to be controlled by Mario J. Gabelli and/or affiliates and in that event would be deemed to be under common control with the Fund’s Adviser. |
8 | Mr. Zizza is an independent director of Gabelli International Ltd., which may be deemed to be controlled by Mario J. Gabelli and/or affiliates and in that event would be deemed to be under common control with the Fund’s Adviser. On September 9, 2015, Mr. Zizza entered into a settlement with the SEC to resolve an inquiry relating to an alleged violation regarding the making of false statements or omissions to the accountants of a company concerning a related party transaction. The company in question is not an affiliate of, nor has any connection to, the Fund. Under the terms of the settlement, Mr. Zizza, without admitting or denying the SEC’s findings and allegation, paid $150,000 and agreed to cease and desist committing or causing any future violations of Rule 13b2-2 of the Securities Exchange Act of 1934, as amended. The Board has discussed this matter and has determined that it does not disqualify Mr. Zizza from serving as an independent director. |
23
Gabelli Love Our Planet & People ETF
2022 TAX NOTICE TO SHAREHOLDERS (Unaudited)
During the year ended December 31, 2022, the Fund paid distributions to shareholders totaling $0.49, comprised of ordinary income of $0.46 and return of capital of $0.03 per share. For the year ended December 31, 2022, 58.62% of the ordinary income distribution qualifies for the dividends received deduction available to corporations. The Fund designates 76.33% of the ordinary income distribution as qualified dividend income pursuant to the Jobs and Growth Tax Relief Reconciliation Act of 2003. The Fund designates 0% of the ordinary income distribution as qualified interest income pursuant to the Tax Relief, Unemployment Reauthorization, and Job Creation Act of 2010.
All designations are based on financial information available as of the date of this annual report and, accordingly, are subject to change. For each item, it is the intention of the Fund to designate the maximum amount permitted under the Internal Revenue Code and the regulations thereunder.
Gabelli Funds and Your Personal Privacy
Who are we?
The Gabelli Funds are investment companies registered with the Securities and Exchange Commission under the Investment Company Act of 1940. We are managed by Gabelli Funds, LLC that is affiliated with GAMCO Investors, Inc. that is a publicly held company with subsidiaries and affiliates that provide investment advisory services for a variety of clients.
What kind of non-public information do we collect about you if you become a fund shareholder?
If you apply to open an account directly with us, you will be giving us some non-public information about yourself. The non-public information we collect about you is:
● | Information you give us on your application form. This could include your name, address, telephone number, social security number, bank account number, and other information. |
● | Information about your transactions with us, any transactions with our affiliates, and transactions with the entities we hire to provide services to you. This would include information about the shares that you buy or redeem. If we hire someone else to provide services — like a transfer agent — we will also have information about the transactions that you conduct through them. |
What information do we disclose and to whom do we disclose it?
We do not disclose any non-public personal information about our customers or former customers to anyone other than our affiliates, our service providers who need to know such information, and as otherwise permitted by law. If you want to find out what the law permits, you can read the privacy rules adopted by the Securities and Exchange Commission. They are in volume 17 of the Code of Federal Regulations, Part 248. The Commission often posts information about its regulations on its website, www.sec.gov.
What do we do to protect your personal information?
We restrict access to non-public personal information about you to the people who need to know that information in order to provide services to you or the fund and to ensure that we are complying with the laws governing the securities business. We maintain physical, electronic, and procedural safeguards to keep your personal information.
GABELLI LOVE OUR PLANET & PEOPLE ETF
One Corporate Center
Rye, NY 10580-1422
Portfolio Management Team Biographies
Christopher J. Marangi has been primarily responsible for the day to day management of the Love Our Planet & People ETF since inception. Mr. Marangi joined GBL in 2003 and currently serves as a Managing Director and Co-Chief Investment Officer of its Value Team. Mr. Marangi is a portfolio manager of the Adviser, managing several funds within the Gabelli Fund Complex, and GAMCO, on its institutional and high net worth accounts team. Mr. Marangi graduated magna cum laude and Phi Beta Kappa with a BA in Political Economy from Williams College and holds an MBA degree with honors from Columbia Business School.
Timothy M. Winter, CFA, has been the portfolio manager of the Love Our Planet & People ETF since inception. Mr. Winter joined Gabelli & Company in April of 2009 and covers the utility industry. He has over 20 years’ experience as an equity research analyst covering this industry, including the years 1992-2007 at AG Edwards where he received industry recognition as a 3 time Wall Street Journal All-Star and was a senior member of the Institutional Investor (I.I.) #1 ranked Electric Utility Team for the years 2001, 2002, 2003, 2004 and 2005. He was most recently recognized in the 2017 Thomson Reuters US Analyst Awards as a “Top Stock Picker” in the gas utility industry. Mr. Winter received his BA in Economics from Rollins College and MBA in Finance from Notre Dame. Mr. Winter is also a portfolio manager of several funds in the Gabelli Fund Complex.
Melody Prenner Bryant joined GAMCO Investors, Inc. in September 2018 and has been jointly responsible for the day to day investment management of the Love Our Planet & People ETF since inception. She has almost thirty years of experience as a portfolio manager. Most recently, Ms. Prenner Bryant was a Managing Director and Chief Investment Officer for Trevor, Stewart, Burton & Jacobsen Inc., a New York based registered investment adviser, and has held senior and portfolio management positions at Neuberger Berman, LLC, John A. Levin & Co., and Kempner Asset Management. Ms. Prenner Bryant received her BA from Binghamton University. Ms. Prenner Bryant is also a portfolio manager of several funds in the Gabelli Fund Complex.
We have separated the portfolio managers’ commentary from the financial statements and investment portfolio due to corporate governance regulations stipulated by the Sarbanes-Oxley Act of 2002. We have done this to ensure that the contents of the portfolio managers’ commentary are unrestricted. Both the commentary and the financial statements, including the portfolios of investments, will be available on our website at www.gabelli.com. |
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