TABLE OF CONTENTS

 

 

Performance Overview 1
Disclosure of Fund Expenses 3
Schedule of Investments 4
Statement of Assets and Liabilities 9
Statement of Operations 10
Statements of Changes in Net Assets 11
Financial Highlights 12
Notes to Financial Statements 13
Additional Information 19
Liquidity Risk Management Program 21

     

 

Barron’s 400SM ETF

 

Performance Overview   May 31, 2022 (Unaudited)

 

Investment Objective

 

The Barron’s 400SM ETF (the “Fund” or “BFOR”) seeks investment results that correspond generally, before fees and expenses, to the performance of the Barron’s 400 IndexSM (the “Underlying Index”). The Underlying Index is a rules-based index intended to give investors a means of tracking the overall performance of high performing equity securities of U.S. companies. The Fund will invest at least 80% of its total assets in the equity securities which comprise the Underlying Index.

 

The Underlying Index generally consists of 400 stocks. The Underlying Index’s stocks are constituents of the MarketGrader U.S. Coverage Universe. In compiling the Underlying Index, MarketGrader Capital, LLC (the “Index Provider”) selects the 400 stocks from the MarketGrader U.S. Coverage Universe by using a methodology that selects components based on the strength of their fundamentals in growth, value, profitability and cash flow and then screens such potential Underlying Index components for certain criteria regarding concentration, market capitalization, and liquidity. The eligible stocks that are selected for inclusion in the Underlying Index’s portfolio are equally weighted. The Underlying Index is rebalanced by the Index Provider semiannually, on the third Friday of March and September each year.

 

Performance (as of May 31, 2022)

 

  6 Months 1 Year 5 Year Since Inception^
Barron’s 400SM ETF – NAV -8.41% -3.43% 9.71% 10.33%
Barron’s 400SM ETF – Market Price* -8.44% -3.47% 9.70% 10.33%
Barron’s 400 IndexSM -8.07% -2.79% 10.43% 11.07%

 

Total Expense Ratio (per the current prospectus) is 0.65%

 

Performance data quoted represents past performance. Past performance does not guarantee future results. Total return figures assume reinvestment of dividends and capital gains distributions, if any. The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data please visit www.alpsfunds.com or call 1.866.759.5679.

 

NAV is an exchange-traded fund’s per-share value. The per-share dollar amount of the Fund is derived by dividing the total value of all the securities in its portfolio, less any liabilities, by the number of Fund shares outstanding. Market Price is the price at which a share can currently be traded in the market. Information detailing the number of days the Market Price of the Fund was greater than the Fund’s NAV and the number of days it was less than the Fund’s NAV can be obtained at www.alpsfunds.com.

 

^ The Fund commenced Investment Operations on June 4, 2013.

 

* Market Price means the official closing price of a share or, if it more accurately reflects the market value of a share at the time as of which the Fund calculates current net asset value per share, the price that is the midpoint of the bid-ask spread as of that time. It does not represent the returns an investor would receive if shares were traded at other times.

 

The Barron’s 400 IndexSM, calculated by NYSE Arca or its affiliates, measures the performance of a diversified group of U.S. companies selected in part based on fundamentals-related rules-based criteria. The index includes companies that have scored highest according to fundamentals-related rankings calculated by MarketGrader Capital, LLC. Additional rules-based screening provides for sector and market cap diversification. The Underlying Index has been licensed by MarketGrader for use with the Barron’s 400SM ETF.

 

The index is not actively managed and does not reflect any deductions for fees, expenses or taxes. One cannot invest directly in an index. Index performance does not reflect Fund performance.

 

Funds that emphasize investments in small/mid cap companies will generally experience greater price volatility.

 

Barron’s 400SM ETF shares are not individually redeemable. Investors buy and sell shares of the Barron’s 400SM ETF on a secondary market. Only market makers or “authorized participants” may trade directly with the Fund, typically in blocks of 25,000 shares.

 

The Barron’s 400SM ETF is not suitable for all investors. Investments in the Fund are subject to investment risks, including possible loss of the principal amount invested.

 

ALPS Portfolio Solutions Distributor, Inc., a FINRA member, is the distributor for the Fund.

 

1 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Performance Overview May 31, 2022 (Unaudited)

 

Top 10 Holdings* (as of May 31, 2022)

San Juan Basin Royalty Trust 0.52%
SandRidge Energy, Inc. 0.44%
Citizens Financial Group, Inc. 0.41%
VAALCO Energy, Inc. 0.38%
Coterra Energy, Inc. 0.37%
Marathon Oil Corp. 0.37%
Devon Energy Corp. 0.36%
Civitas Resources, Inc. 0.35%
Golden Ocean Group, Ltd. 0.34%
Photronics, Inc. 0.34%
Total % of Top 10 Holdings 3.88%

 

* % of Total Investments (excluding investments purchased with collateral from securities loaned).

 

Future holdings are subject to change.

Sector Allocation* (as of May 31, 2022)

 

 

 

Growth of $10,000 (as of May 31, 2022)

Comparison of change in value of a $10,000 investment in the Fund and the Underlying Index

 

 

 

The chart above compares historical performance of a hypothetical investment of $10,000 in the Fund since inception with the performance of the Fund’s benchmark index. Results include the reinvestment of all dividends and capital gains distributions. Past performance does not guarantee future results. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

 

2 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Disclosure of Fund Expenses May 31, 2022 (Unaudited)

 

Shareholder Expense Example: As a shareholder of the Fund, you incur certain ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds. It is based on an investment of $1,000 invested at the beginning of the six month period and held through May 31, 2022.

 

Actual Return: The first line of the table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses attributable to your investment during this period.

 

Hypothetical 5% Return: The second line of the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

The expenses shown in the table are meant to highlight ongoing Fund costs only and do not reflect any transaction costs, such as brokerage commissions and other fees to financial intermediaries. Therefore, the second line is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these costs were included, your costs would have been higher.

 

    Beginning Account Value 12/1/21     Ending Account Value 5/31/22     Expense Ratio(a)     Expenses Paid During Period 12/1/21 - 5/31/22(b)  
Barron's 400 ETF                                
Actual   $ 1,000.00     $ 915.90       0.65 %   $ 3.10  
Hypothetical (5% return before expenses)   $ 1,000.00     $ 1,021.69       0.65 %   $ 3.28  

 

(a) Annualized, based on the Fund's most recent fiscal half year expenses.
(b) Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (182), divided by 365.

 

3 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Schedule of Investments May 31, 2022 (Unaudited)

 

Security Description   Shares     Value  
COMMON STOCKS (97.68%)            
Communication Services (1.92%)            
Activision Blizzard, Inc.     4,390     $ 341,893  
Alphabet, Inc., Class A(a)     137       311,708  
Entravision Communications                
Corp., Class A     56,080       293,298  
Fox Corp., Class A     8,839       313,873  
Interpublic Group of Cos., Inc.     10,015       322,783  
Omnicom Group, Inc.     4,316       322,017  
Paramount Global(b)     10,020       343,987  
World Wrestling
Entertainment, Inc., Class A(b)
    6,280       419,316  
Total Communication Services             2,668,875  
                 
Consumer Discretionary (16.60%)                
Academy Sports & Outdoors, Inc.(b)     9,744       326,521  
American Eagle Outfitters, Inc.     19,310       233,844  
Asbury Automotive Group, Inc.(a)     1,899       344,004  
AutoNation, Inc.(a)     3,024       361,549  
AutoZone, Inc.(a)     185       381,035  
Best Buy Co., Inc.     3,521       288,933  
Big 5 Sporting Goods Corp.(b)     21,646       275,987  
Boot Barn Holdings, Inc.(a)     3,903       314,972  
Boyd Gaming Corp.     5,279       310,247  
Brunswick Corp.     3,966       298,362  
Buckle, Inc.     9,657       317,329  
Build-A-Bear Workshop, Inc.     20,710       422,277  
Cavco Industries, Inc.(a)     1,260       279,922  
Children's Place, Inc.(a)     6,720       319,066  
Churchill Downs, Inc.     1,600       323,888  
Columbia Sportswear Co.     3,939       306,375  
Crocs, Inc.(a)     4,823       268,930  
Darden Restaurants, Inc.     2,815       351,875  
Dick's Sporting Goods, Inc.(b)     3,134       254,575  
Dillard's, Inc., Class A(b)     1,308       394,336  
Dollar General Corp.     1,640       361,358  
DR Horton, Inc.     4,336       325,850  
Ethan Allen Interiors, Inc.     13,360       310,754  
Etsy, Inc.(a)     2,790       226,325  
Five Below, Inc.(a)     2,266       295,917  
Harley-Davidson, Inc.(b)     9,250       325,415  
Home Depot, Inc.     1,060       320,915  
KB Home     9,490       327,310  
Lennar Corp., Class B     4,876       327,521  
Levi Strauss & Co.     18,865       342,588  
Lithia Motors, Inc., Class A     1,078       328,219  
LKQ Corp.     7,723       396,885  
Malibu Boats, Inc., Class A(a)     5,862       343,513  
MarineMax, Inc.(a)     7,776       322,004  
Marriott International, Inc., Class A     2,100       360,318  
MasterCraft Boat Holdings, Inc.(a)(b)     13,289       310,963  
Mattel, Inc.(a)     15,400       386,848  

Security Description   Shares     Value  
Consumer Discretionary (continued)            
Monarch Casino & Resort, Inc.(a)     4,112     $ 278,999  
Movado Group, Inc.     10,327       350,395  
Murphy USA, Inc.     1,865       464,609  
NVR, Inc.(a)     73       324,895  
OneWater Marine, Inc.     8,680       296,856  
O'Reilly Automotive, Inc.(a)     505       321,771  
Patrick Industries, Inc.     5,294       318,222  
Pool Corp.     775       308,931  
PulteGroup, Inc.     7,546       341,532  
Ralph Lauren Corp.     3,230       326,521  
Ruth's Hospitality Group, Inc.     15,700       289,351  
Shoe Carnival, Inc.     11,180       304,767  
Signet Jewelers, Ltd.     4,804       286,318  
Skechers U.S.A., Inc., Class A(a)     9,392       370,045  
Skyline Champion Corp.(a)     5,296       281,376  
Smith & Wesson Brands, Inc.     22,352       346,009  
Steven Madden, Ltd.     9,065       337,037  
Sturm Ruger & Co., Inc.     4,998       339,314  
Tapestry, Inc.     10,035       346,208  
Target Corp.     1,620       262,246  
Taylor Morrison Home Corp., Class A(a)     11,460       331,996  
Tempur Sealy International, Inc.     11,078       292,127  
Tesla, Inc.(a)     430       326,052  
Texas Roadhouse, Inc.     4,475       348,916  
Thor Industries, Inc.(b)     4,160       316,035  
Tilly's, Inc., Class A(b)     36,000       298,080  
TJX Cos., Inc.     5,695       362,031  
Tractor Supply Co.     1,540       288,534  
Ulta Beauty, Inc.(a)     942       398,560  
Vista Outdoor, Inc.(a)     9,708       374,146  
Whirlpool Corp.     1,845       339,923  
Williams-Sonoma, Inc.(b)     2,347       300,228  
Winnebago Industries, Inc.(b)     5,906       292,052  
Zumiez, Inc.(a)     8,484       278,360  
Total Consumer Discretionary             23,029,172  
                 
Consumer Staples (4.22%)                
Archer-Daniels-Midland Co.     4,215       382,806  
Bunge, Ltd.     3,251       384,658  
Church & Dwight Co., Inc.     3,520       317,011  
Coca-Cola Co.     5,888       373,181  
Costco Wholesale Corp.     645       300,712  
Darling Ingredients, Inc.(a)     4,930       394,745  
Estee Lauder Cos., Inc., Class A     1,348       343,268  
Hershey Co.     1,677       355,038  
Ingles Markets, Inc., Class A     3,875       345,107  
Inter Parfums, Inc.     4,252       313,798  
Kellogg Co.     5,690       396,821  
MGP Ingredients, Inc.     4,397       425,893  
Monster Beverage Corp.(a)     4,647       414,141  
Procter & Gamble Co.     2,341       346,187  
Sanderson Farms, Inc.     1,953       389,624  
Tyson Foods, Inc., Class A     4,073       364,982  
Total Consumer Staples             5,847,972  

 

4 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Schedule of Investments May 31, 2022 (Unaudited)

 

Security Description   Shares     Value  
Energy (11.58%)            
APA Corp.     9,570     $ 449,886  
Brigham Minerals, Inc., Class A     14,550       441,010  
California Resources Corp.     8,299       362,417  
Callon Petroleum Co.(a)     6,495       379,698  
Chesapeake Energy Corp.(b)     4,660       453,791  
Chevron Corp.     2,220       387,745  
Civitas Resources, Inc.     6,360       485,586  
ConocoPhillips     3,695       415,170  
Continental Resources, Inc.     6,180       420,673  
Coterra Energy, Inc.     14,970       513,920  
Denbury, Inc.(a)     5,090       372,283  
Devon Energy Corp.     6,635       496,961  
Diamondback Energy, Inc.     2,825       429,457  
EOG Resources, Inc.     3,066       419,919  
Exxon Mobil Corp.     4,560       437,760  
FLEX LNG, Ltd.(b)     16,865       452,319  
Halliburton Co.     10,115       409,658  
Hess Corp.     3,795       467,051  
Kimbell Royalty Partners LP     22,800       432,288  
Laredo Petroleum, Inc.(a)     5,165       434,738  
Magnolia Oil & Gas Corp., Class A     16,312       450,374  
Marathon Oil Corp.     16,235       510,266  
Matador Resources Co.     6,920       421,428  
Oasis Petroleum, Inc.     2,506       397,777  
Occidental Petroleum Corp.     6,450       447,050  
ONEOK, Inc.     5,473       360,397  
Ovintiv, Inc.     8,160       456,878  
PDC Energy, Inc.     5,400       427,356  
Pioneer Natural Resources Co.     1,540       428,028  
San Juan Basin Royalty Trust     56,370       726,609  
SandRidge Energy, Inc.(a)     26,070       614,470  
Targa Resources Corp.     5,410       389,628  
Texas Pacific Land Corp.     284       444,741  
VAALCO Energy, Inc.(b)     68,750       526,625  
Whiting Petroleum Corp.     4,434       392,232  
Williams Cos., Inc.     11,240       416,554  
Total Energy             16,072,743  
                 
Financials (17.27%)                
Allegiance Bancshares, Inc.     7,824       314,916  
Ally Financial, Inc.     8,475       373,239  
A-Mark Precious Metals, Inc.     5,105       388,133  
American Express Co.     1,995       336,796  
American International Group, Inc.     6,005       352,373  
Ameriprise Financial, Inc.     1,250       345,337  
Ameris Bancorp     7,466       340,375  
Associated Banc-Corp     15,180       314,226  
Atlantic Union Bankshares Corp.     8,925       314,695  
Atlanticus Holdings Corp.(a)     7,217       280,813  
BancFirst Corp.     4,345       394,222  
Bank OZK     8,009       332,133  
Banner Corp.     5,835       339,072  
Blackstone, Inc.     3,180       374,572  
Byline Bancorp, Inc.     13,174       329,087  
Capital One Financial Corp.     2,609       333,587  
Security Description   Shares     Value  
Financials (continued)            
Cathay General Bancorp     7,779     $ 319,795  
Central Pacific Financial Corp.     12,592       303,971  
Cincinnati Financial Corp.     2,685       343,304  
Citizens Financial Group, Inc.     13,844       572,850  
Cohen & Steers, Inc.     4,513       343,936  
ConnectOne Bancorp, Inc.     10,750       296,270  
Credit Acceptance Corp.(a)(b)     708       421,479  
Customers Bancorp, Inc.(a)     6,150       253,995  
Dime Community Bancshares, Inc.     10,370       326,033  
Eagle Bancorp, Inc.     5,985       296,617  
East West Bancorp, Inc.     4,600       338,284  
Enova International, Inc.(a)     9,940       313,905  
Enterprise Financial Services Corp.     7,110       329,264  
Evercore, Inc., Class A     3,106       354,705  
FactSet Research Systems, Inc.     842       321,459  
FB Financial Corp.     7,641       321,075  
Fidelity National Financial, Inc., Class A     7,260       307,098  
Fifth Third Bancorp     7,660       302,034  
First BanCorp     27,299       407,574  
First Foundation, Inc.     13,645       307,695  
Flagstar Bancorp, Inc.     8,001       308,279  
Flushing Financial Corp.     15,120       349,272  
Franklin Resources, Inc.     13,025       352,717  
Hamilton Lane, Inc., Class A     4,690       326,189  
Hanmi Financial Corp.     14,160       330,494  
HomeStreet, Inc.     6,860       276,527  
Horizon Bancorp, Inc.     17,545       315,284  
Houlihan Lokey, Inc.     3,571       306,892  
Independent Bank Corp.     14,958       296,318  
International Bancshares Corp.     8,235       345,294  
KeyCorp     14,712       293,652  
Kinsale Capital Group, Inc.     1,610       354,007  
Lakeland Bancorp, Inc.     19,950       309,624  
Live Oak Bancshares, Inc.     6,331       254,253  
Merchants Bancorp     12,507       318,803  
Mr Cooper Group, Inc.(a)     7,425       321,948  
OFG Bancorp     12,945       366,861  
Old Republic International Corp.     13,740       328,661  
Origin Bancorp, Inc.     7,965       311,272  
Pacific Premier Bancorp, Inc.     9,546       310,818  
Piper Sandler Cos.     2,810       370,330  
Popular, Inc.     4,345       355,030  
Premier Financial Corp.     10,950       297,511  
Regional Management Corp.     7,793       370,791  
Regions Financial Corp.     15,410       340,407  
SEI Investments Co.     6,070       354,670  
ServisFirst Bancshares, Inc.     3,879       323,353  
Signature Bank/New York NY     1,195       258,443  
SLM Corp.     20,015       392,094  
Stifel Financial Corp.     5,350       343,309  
Synovus Financial Corp.     7,282       310,577  
Towne Bank     11,325       333,861  
US Bancorp     6,465       343,098  
Western Alliance Bancorp     4,214       342,893  

 

5 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Schedule of Investments May 31, 2022 (Unaudited)

 

Security Description   Shares     Value  
Financials (continued)            
WSFS Financial Corp.     6,925     $ 296,251  
Zions Bancorp NA     5,377       306,704  
Total Financials             23,961,406  
                 
Health Care (9.94%)                
Abbott Laboratories     2,990       351,205  
AbbVie, Inc.     2,253       332,025  
Agilent Technologies, Inc.     2,680       341,861  
Amgen, Inc.     1,510       387,677  
AMN Healthcare Services, Inc.(a)     3,440       333,336  
Bio-Rad Laboratories, Inc., Class A(a)     637       342,572  
Bio-Techne Corp.     860       317,968  
Bristol-Myers Squibb Co.     5,045       380,645  
Catalent, Inc.(a)     3,630       374,108  
Catalyst Pharmaceuticals, Inc.(a)     46,261       333,079  
Cooper Cos, Inc.     893       313,211  
Corcept Therapeutics, Inc.(a)     14,635       304,993  
Cross Country Healthcare, Inc.(a)     16,870       297,755  
Danaher Corp.     1,291       340,592  
DaVita, Inc.(a)     3,181       310,116  
Doximity, Inc.(a)(b)     8,070       282,369  
Dynavax Technologies Corp.(a)(b)     33,585       398,318  
Edwards Lifesciences Corp.(a)     3,282       330,990  
HCA Healthcare, Inc.     1,314       276,466  
Henry Schein, Inc.(a)     4,043       346,243  
Hologic, Inc.(a)     4,949       372,511  
IDEXX Laboratories, Inc.(a)     694       271,784  
Innoviva, Inc.(a)     18,932       287,198  
Johnson & Johnson     1,992       357,624  
Laboratory Corp. of America Holdings     1,291       318,516  
Maravai LifeSciences Holdings, Inc., Class A(a)     9,071       282,562  
Merck & Co., Inc.     4,480       412,294  
Mettler-Toledo International, Inc.(a)     263       338,250  
Moderna, Inc.(a)     2,359       342,833  
PerkinElmer, Inc.     2,067       309,368  
Pfizer, Inc.     6,731       357,012  
Quest Diagnostics, Inc.     2,467       347,896  
QuidelOrtho Corp.(a)     3,360       319,301  
Regeneron Pharmaceuticals, Inc.(a)     528       350,983  
Thermo Fisher Scientific, Inc.     636       360,975  
Veeva Systems, Inc., Class A(a)     2,005       341,371  
Vertex Pharmaceuticals, Inc.(a)     1,414       379,871  
Vir Biotechnology, Inc.(a)     15,170       391,538  
Waters Corp.(a)     1,097       359,761  
West Pharmaceutical Services, Inc.     904       280,584  
Zoetis, Inc.     1,850       316,220  
Total Health Care             13,793,981  
Security Description   Shares     Value  
Industrials (15.30%)            
AGCO Corp.     2,763     $ 354,023  
Allison Transmission Holdings, Inc.     9,120       364,891  
AMETEK, Inc.     2,700       327,969  
AO Smith Corp.     5,304       318,876  
ArcBest Corp.     4,150       313,865  
Atkore, Inc.(a)     3,454       376,210  
Atlas Air Worldwide Holdings, Inc.(a)     4,139       288,530  
BlueLinx Holdings, Inc.(a)     3,996       330,309  
Boise Cascade Co.     4,487       346,935  
Builders FirstSource, Inc.(a)     4,800       312,432  
BWX Technologies, Inc.     6,625       339,200  
Carlisle Cos., Inc.     1,470       374,012  
CH Robinson Worldwide, Inc.     3,540       384,125  
Cintas Corp.     915       364,472  
Copart, Inc.(a)     2,905       332,710  
CSW Industrials, Inc.     2,959       314,009  
CSX Corp.     10,244       325,657  
Donaldson Co., Inc.     6,780       354,458  
Dover Corp.     2,296       307,457  
Eagle Bulk Shipping, Inc.     6,335       464,102  
Emerson Electric Co.     3,797       336,642  
Encore Wire Corp.     2,861       357,682  
Equifax, Inc.     1,514       306,706  
Expeditors International of Washington, Inc.     3,508       381,811  
Fastenal Co.     6,295       337,160  
Fortune Brands Home & Security, Inc.     4,140       287,109  
Franklin Electric Co., Inc.     4,220       311,098  
Genco Shipping & Trading, Ltd.     18,470       466,368  
Generac Holdings, Inc.(a)     1,220       301,438  
Golden Ocean Group, Ltd.(b)     31,725       468,261  
Graco, Inc.     5,054       319,918  
Heidrick & Struggles International, Inc.     8,800       304,128  
IDEX Corp.     1,810       346,706  
Insteel Industries, Inc.     9,348       387,101  
JB Hunt Transport Services, Inc.     1,756       303,050  
Knight-Swift Transportation Holdings, Inc.     6,610       321,510  
Korn Ferry     5,380       330,655  
Landstar System, Inc.     2,280       345,260  
Lockheed Martin Corp.     780       343,286  
Matson, Inc.     3,074       276,291  
Mueller Industries, Inc.     6,160       331,716  
Nordson Corp.     1,590       346,429  
Norfolk Southern Corp.     1,304       312,517  
Northrop Grumman Corp.     780       365,017  
Old Dominion Freight Line, Inc.     1,134       292,844  
Owens Corning     3,762       359,572  
PACCAR, Inc.     4,010       348,228  
Parker-Hannifin Corp.     1,252       340,757  
Republic Services, Inc.     2,720       364,045  
Robert Half International, Inc.     3,085       278,113  
Saia, Inc.(a)     1,350       266,747  

 

6 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Schedule of Investments May 31, 2022 (Unaudited)

 

Security Description   Shares     Value  
Industrials (continued)            
Schneider National, Inc., Class B     13,600     $ 328,304  
Simpson Manufacturing Co., Inc.     2,997       324,725  
Snap-on, Inc.     1,732       384,296  
TriNet Group, Inc.(a)     3,970       311,804  
Triton International, Ltd.     5,330       339,894  
UFP Industries, Inc.     4,071       314,281  
Union Pacific Corp.     1,342       294,945  
United Parcel Service, Inc., Class B     1,667       303,811  
United Rentals, Inc.(a)     1,070       319,053  
Watsco, Inc.     1,200       306,756  
Werner Enterprises, Inc.     8,190       332,268  
WW Grainger, Inc.     706       343,871  
Total Industrials             21,236,415  
                 
Information Technology (13.19%)                
Adobe, Inc.(a)     833       346,928  
Advanced Micro Devices, Inc.(a)     3,223       328,295  
Akamai Technologies, Inc.(a)     3,162       319,488  
Alpha & Omega Semiconductor, Ltd.(a)     7,170       314,978  
Amkor Technology, Inc.     16,353       334,255  
Amphenol Corp., Class A     4,754       336,868  
Apple, Inc.     2,268       337,569  
Applied Materials, Inc.     2,803       328,764  
Arista Networks, Inc.(a)     2,898       296,407  
Automatic Data Processing, Inc.     1,646       366,959  
Axcelis Technologies, Inc.(a)     5,410       335,744  
Badger Meter, Inc.     3,690       292,027  
Broadcom, Inc.     594       344,597  
Cadence Design Systems, Inc.(a)     2,468       379,406  
Ciena Corp.(a)     6,220       316,100  
Cisco Systems, Inc.     6,316       284,536  
Clearfield, Inc.(a)(b)     5,887       363,817  
Cognex Corp.     5,228       253,140  
Cognizant Technology Solutions Corp., Class A     3,957       295,588  
Corning, Inc.     9,612       344,302  
Diodes, Inc.(a)     4,143       319,052  
Entegris, Inc.     2,828       313,795  
Fair Isaac Corp.(a)     732       299,791  
FleetCor Technologies, Inc.(a)     1,523       378,938  
Fortinet, Inc.(a)     1,239       364,439  
Gartner, Inc.(a)     1,250       328,000  
Global Payments, Inc.     2,740       359,050  
GoDaddy, Inc., Class A(a)     4,585       344,104  
Intel Corp.     7,845       348,475  
Intuit, Inc.     796       329,910  
Jack Henry & Associates, Inc.     1,965       369,656  
Keysight Technologies, Inc.(a)     2,350       342,160  
KLA Corp.     1,049       382,728  
Mastercard, Inc., Class A     1,050       375,763  
Microchip Technology, Inc.     4,900       355,985  
Micron Technology, Inc.     4,815       355,540  
Microsoft Corp.     1,222       332,225  
Security Description   Shares     Value  
Information Technology (continued)            
MKS Instruments, Inc.     2,440     $ 301,340  
Monolithic Power Systems, Inc.     833       375,175  
NetApp, Inc.     4,282       308,090  
NVIDIA Corp.     1,559       291,096  
ON Semiconductor Corp.(a)     6,208       376,701  
Onto Innovation, Inc.(a)     4,476       359,781  
Paychex, Inc.     2,859       354,030  
Photronics, Inc.(a)     21,485       467,084  
Power Integrations, Inc.     3,999       337,436  
Qorvo, Inc.(a)     2,900       324,075  
QUALCOMM, Inc.     2,435       348,741  
SS&C Technologies Holdings, Inc.     4,590       293,714  
Synopsys, Inc.(a)     1,230       392,616  
Teledyne Technologies, Inc.(a)     820       332,223  
Texas Instruments, Inc.     2,037       360,060  
Visa, Inc., Class A, Class A     1,700       360,689  
Zebra Technologies Corp., Class A(a)     905       306,062  
Total Information Technology             18,308,292  
                 
Materials (6.74%)                
Alcoa Corp.     4,765       294,096  
Ball Corp.     3,843       272,430  
Celanese Corp.     2,537       397,091  
CF Industries Holdings, Inc.     3,705       365,943  
Cliffs Natural Resources, Inc.(a)     13,881       321,762  
Commercial Metals Co.     8,500       337,705  
Dow Chemical Co.     5,983       406,724  
Eagle Materials, Inc.     2,636       344,156  
FMC Corp.     2,755       337,708  
Freeport-McMoRan, Inc.     7,940       310,295  
Greif, Inc., Class A     5,870       349,089  
Hawkins, Inc.     7,690       278,070  
Huntsman Corp.     9,120       330,600  
Louisiana-Pacific Corp.     5,097       351,999  
Mesabi Trust(b)     13,620       370,873  
Mosaic Co.     5,971       374,083  
Nucor Corp.     2,577       341,350  
Olin Corp.     6,980       459,214  
Packaging Corp. of America     2,311       363,474  
Reliance Steel & Aluminum Co.     1,840       357,696  
Royal Gold, Inc.     2,566       290,163  
Schnitzer Steel Industries, Inc., Class A     7,330       297,745  
Southern Copper Corp.     5,141       317,611  
Steel Dynamics, Inc.     4,772       407,433  
TimkenSteel Corp.(a)     17,470       403,557  
United States Steel Corp.     10,880       272,762  
Westlake Corp.     3,030       400,293  
Total Materials             9,353,922  
                 
Real Estate (0.65%)                
CBRE Group, Inc., Class A(a)     3,980       329,703  
Marcus & Millichap, Inc.     7,590       317,869  

 

7 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Schedule of Investments May 31, 2022 (Unaudited)

 

Security Description   Shares     Value  
Real Estate (continued)            
Newmark Group, Inc.     22,680     $ 251,068  
Total Real Estate             898,640  
                 
Utilities (0.27%)                
CMS Energy Corp.     5,190       368,698  
                 
TOTAL COMMON STOCKS                
(Cost $126,162,372)             135,540,116  

 

Security Description   Shares     Value  
LIMITED PARTNERSHIPS (1.92%)            
Energy (1.38%)            
Cheniere Energy Partners LP     7,350       395,209  
Enterprise Products Partners LP     14,560       399,235  
KKR & Co., LP     6,701       367,282  
Magellan Midstream Partners LP     7,470       386,199  
MPLX LP     11,190       368,711  
Total Energy             1,916,636  
                 
Financials (0.23%)                
Carlyle Group, Inc.     8,147       313,904  
                 
Materials (0.31%)                
CVR Partners LP     3,310       429,307  
                 
TOTAL LIMITED PARTNERSHIPS                
(Cost $2,670,738)             2,659,847  

 

    7 Day Yield     Shares     Value  
SHORT TERM INVESTMENTS (1.98%)                  
Money Market Fund (0.29%)                  
State Street Institutional                  
Treasury Plus                  
Money Market Fund                  
 (Cost $399,804)     0.75 %     399,804       399,804  
                         
Investments Purchased with Collateral from Securities Loaned (1.69%)                        
State Street Navigator                        
Securities Lending                        
Government Money Market                        
Portfolio, 0.80%                        
(Cost $2,349,632)             2,349,632       2,349,632  
TOTAL SHORT TERM INVESTMENTS                        
(Cost $2,749,436)                     2,749,436  
                         
TOTAL INVESTMENTS (101.58%)                        
(Cost $131,582,546)                   $ 140,949,399  
LIABILITIES IN EXCESS OF OTHER ASSETS (-1.58%)                     (2,188,046 )
NET ASSETS - 100.00%                   $ 138,761,353  
(a) Non-income producing security.
(b) Security, or a portion of the security position is currently on loan. The total market value of securities on loan is $5,186,628.

 

See Notes to Financial Statements.

 

8 | May 31, 2022 

     

 

Barron’s 400SM ETF

 

Statement of Assets and Liabilities May 31, 2022 (Unaudited)

 

ASSETS:      
Investments, at value   $ 140,949,399  
Dividends receivable     235,621  
Total Assets     141,185,020  
         
LIABILITIES:        
Payable to adviser     74,035  
Payable for collateral upon return of securities loaned     2,349,632  
Total Liabilities     2,423,667  
NET ASSETS   $ 138,761,353  
         
NET ASSETS CONSIST OF:        
Paid-in capital   $ 176,748,941  
Total distributable earnings     (37,987,588 )
NET ASSETS   $ 138,761,353  
         
INVESTMENTS, AT COST   $ 131,582,546  
         
PRICING OF SHARES        
Net Assets   $ 138,761,353  
Shares of beneficial interest outstanding (Unlimited number of shares authorized, par value $0.01 per share)     2,450,000  
Net Asset Value, offering and redemption price per share   $ 56.64  

 

See Notes to Financial Statements.

 

9 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Statement of Operations For the Six Months Ended May 31, 2022 (Unaudited)

 

INVESTMENT INCOME:      
Dividends(a)   $ 1,309,801  
Securities Lending Income     4,462  
Total Investment Income     1,314,263  
         
EXPENSES:        
Investment adviser fees     472,369  
Net Expenses     472,369  
NET INVESTMENT INCOME     841,894  
         
REALIZED AND UNREALIZED GAIN:        
Net realized gain on investments(b)     7,670,296  
Net change in unrealized appreciation/(depreciation) on investments     (21,126,236 )
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS     (13,455,940 )
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS   $ (12,614,046 )

 

(a) Net of foreign tax withholding of $1,520.
(b) Includes realized gain or loss as a result of in-kind transactions (See Note 4 in Notes to Financial Statements).

 

See Notes to Financial Statements.

 

10 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Statements of Changes in Net Assets

 

    For the Six Months Ended May 31, 2022 (Unaudited)     For the Year Ended November 30, 2021  
OPERATIONS:            
Net investment income   $ 841,894     $ 1,264,631  
Net realized gain     7,670,296       35,081,287  
Net change in unrealized appreciation/depreciation     (21,126,236 )     2,133,972  
Net increase/(decrease) in net assets resulting from operations     (12,614,046 )     38,479,890  
                 
DISTRIBUTIONS TO SHAREHOLDERS:                
From distributable earnings     (1,433,725 )     (1,258,708 )
Total distributions     (1,433,725 )     (1,258,708 )
                 
CAPITAL SHARE TRANSACTIONS:                
Proceeds from sale of shares           94,843,165  
Cost of shares redeemed     (3,159,145 )     (94,389,197 )
Net increase/(decrease) from capital share transactions     (3,159,145 )     453,968  
Net increase/(decrease) in net assets     (17,206,916 )     37,675,150  
                 
NET ASSETS:                
Beginning of period     155,968,269       118,293,119  
End of period   $ 138,761,353     $ 155,968,269  
                 
OTHER INFORMATION:                
CAPITAL SHARE TRANSACTIONS:                
Beginning shares     2,500,000       2,500,000  
Shares sold           1,650,000  
Shares redeemed     (50,000 )     (1,650,000 )
Shares outstanding, end of period     2,450,000       2,500,000  

 

See Notes to Financial Statements.

 

11 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Financial Highlights For a Share Outstanding Throughout the Periods Presented

 

    For the Six Months Ended May 31, 2022 (Unaudited)     For the Year Ended November 30, 2021     For the Year Ended November 30, 2020     For the Year Ended November 30, 2019     For the Year Ended November 30, 2018     For the Year Ended November 30, 2017  
NET ASSET VALUE, BEGINNING OF PERIOD   $ 62.39     $ 47.32     $ 42.04     $ 40.42     $ 41.54     $ 34.35  
                                                 
INCOME FROM OPERATIONS:                                                
Net investment income(a)     0.34       0.52       0.43       0.44       0.40       0.29  
Net realized and unrealized gain/(loss)     (5.52 )     15.05       5.14       1.51       (1.27 )     7.17  
Total from investment operations     (5.18 )     15.57       5.57       1.95       (0.87 )     7.46  
                                                 
DISTRIBUTIONS:                                                
From net investment income     (0.57 )     (0.50 )     (0.29 )     (0.33 )     (0.25 )     (0.27 )
Total distributions     (0.57 )     (0.50 )     (0.29 )     (0.33 )     (0.25 )     (0.27 )
                                                 
NET INCREASE/(DECREASE) IN NET ASSET VALUE     (5.75 )     15.07       5.28       1.62       (1.12 )     7.19  
NET ASSET VALUE, END OF PERIOD   $ 56.64     $ 62.39     $ 47.32     $ 42.04     $ 40.42     $ 41.54  
TOTAL RETURN(b)     (8.41 )%     33.18 %     13.33 %     5.00 %     (2.12 )%     21.87 %
                                                 
RATIOS/SUPPLEMENTAL DATA:                                                
Net assets, end of period (in 000s)   $ 138,761     $ 155,968     $ 118,293     $ 147,150     $ 163,708     $ 205,601  
                                                 
RATIOS TO AVERAGE NET ASSETS                                                
Ratio of expenses to average net assets     0.65 %(c)     0.65 %     0.65 %     0.65 %     0.65 %     0.65 %
Ratio of net investment income to average net assets     1.16 %(c)     0.90 %     1.08 %     1.10 %     0.93 %     0.78 %
Portfolio turnover rate(d)     49 %     91 %     83 %     109 %     88 %     84 %

 

(a) Based on average shares outstanding during the period.
(b) Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period and redemption at the net asset value on the last day of the period and assuming all distributions are reinvested at the reinvestment prices. Total return calculated for a period of less than one year is not annualized.
(c) Annualized.
(d) Portfolio turnover for periods less than one year are not annualized and does not include securities received or delivered from processing creations or redemptions in-kind.

 

See Notes to Financial Statements.

 

12 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Notes to Financial Statements May 31, 2022 (Unaudited)

 

1. ORGANIZATION

 

ALPS ETF Trust (the “Trust”), a Delaware statutory trust, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As of May 31, 2022, the Trust consisted of nineteen separate portfolios. Each portfolio represents a separate series of the Trust. This report pertains solely to the Barron’s 400SM ETF (the “Fund”). The investment objective of the Fund is to seek investment results that correspond generally, before fees and expenses, to the performance of the Barron’s 400 IndexSM (the “Underlying Index”). The Fund has elected to qualify as a diversified series of the Trust under the 1940 Act.

 

The Fund’s Shares (“Shares”) are listed on the NYSE Arca, Inc. (the “NYSE Arca”). The Fund issues and redeems Shares at net asset value (“NAV”) in blocks of 25,000 Shares, each of which is called a “Creation Unit”. Creation Units are issued and redeemed principally in-kind for securities included in the Underlying Index. Except when aggregated in Creation Units, Shares are not redeemable securities of the Fund. On October 1, 2021, the Fund reduced its Creation Unit size from 50,000 to 25,000 shares.

 

Pursuant to the Trust’s organizational documents, its Officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.

 

2. SIGNIFICANT ACCOUNTING POLICIES

 

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of the financial statements. The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. The Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946.

 

A. Portfolio Valuation

The Fund’s NAV is determined daily, as of the close of regular trading on the New York Stock Exchange (the “NYSE”), normally 4:00 p.m. Eastern time, on each day the NYSE is open for trading. The NAV is computed by dividing the value of all assets of the Fund (including accrued interest and dividends), less all liabilities (including accrued expenses and dividends declared but unpaid), by the total number of shares outstanding.

 

Portfolio securities listed on any exchange other than the NASDAQ Stock Market LLC (“NASDAQ”) are valued at the last sale price on the business day as of which such value is being determined. If there has been no sale on such day, the securities are valued at the mean of the most recent bid and ask prices on such day. Securities traded on the NASDAQ are valued at the NASDAQ Official Closing Price as determined by NASDAQ. Portfolio securities traded on more than one securities exchange are valued at the last sale price on the business day as of which such value is being determined at the close of the exchange representing the principal market for such securities. Portfolio securities traded in the over-the-counter market, but excluding securities traded on the NASDAQ, are valued at the latest quoted sale price in such market.

 

The Fund’s investments are valued at market value or, in the absence of market value with respect to any portfolio securities, at fair value according to procedures adopted by the Trust’s Board of Trustees (the “Board”). When market quotations are not readily available or when events occur that make established valuation methods unreliable, securities of the Fund may be valued in good faith by or under the direction of the Board. These securities generally include, but are not limited to, restricted securities (securities which may not be publicly sold without registration under the Securities Act of 1933) for which a pricing service is unable to provide a market price; securities whose trading has been formally suspended; a security whose market price is not available from a pre-established primary pricing source or the pricing source is not willing to provide a price; a security with respect to which an event has occurred that is most likely to materially affect the value of the security after the market has closed but before the calculation of the Fund’s NAV or make it difficult or impossible to obtain a reliable market quotation; or a security whose price, as provided by the pricing service, does not reflect the security’s “fair value” due to the security being de-listed from a national exchange or the security’s primary trading market is temporarily closed at a time when, under normal conditions, it would be open. As a general principle, the current “fair value” of a security would be the amount which the owner might reasonably expect to receive from the sale on the applicable exchange or principal market. A variety of factors may be considered in determining the fair value of such securities.

 

13 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Notes to Financial Statements May 31, 2022 (Unaudited)

 

B. Fair Value Measurements

The Fund discloses the classification of its fair value measurements following a three-tier hierarchy based on the inputs used to measure fair value. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability; including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available.

 

Valuation techniques used to value the Fund's investments by major category are as follows:

 

Equity securities and Limited Partnerships, including restricted securities, for which market quotations are readily available, are valued at the last reported sale price or official closing price as reported by a third party pricing vendor on the primary market or exchange on which they are traded and are categorized as Level 1 in the hierarchy. In the event there were no sales during the day or closing prices are not available, securities are valued at the mean of the most recent quoted bid and ask prices on such day and are generally categorized as Level 2 in the hierarchy. Investments in open-end mutual funds are valued at their closing NAV each business day and are categorized as Level 1 in the hierarchy.

 

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy.

 

Various inputs are used in determining the value of the Fund’s investments as of the end of the reporting period. When inputs used fall into different levels of the fair value hierarchy, the level in the hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The designated input levels are not necessarily an indication of the risk or liquidity associated with these investments.

 

These inputs are categorized in the following hierarchy under applicable financial accounting standards:

 

Level 1 Unadjusted quoted prices in active markets for identical investments, unrestricted assets or liabilities that a Fund has the ability to access at the measurement date;
Level 2 Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and
Level 3

Significant unobservable prices or inputs (including the Fund’s own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date.

 

 

The following is a summary of the inputs used to value the Fund’s investments as of May 31, 2022:

 

Barron's 400 ETF

 

Investments in Securities at Value   Level 1 - Quoted and Unadjusted Prices     Level 2 - Other Significant Observable Inputs     Level 3 - Significant Unobservable Inputs     Total  
Common Stocks*   $ 135,540,116     $     $     $ 135,540,116  
Limited Partnerships*     2,659,847                   2,659,847  
Short Term Investments     2,749,436                   2,749,436  
Total   $ 140,949,399     $     $     $ 140,949,399  

 

* For a detailed sector breakdown, see the accompanying Schedule of Investments.

 

The Fund did not have any securities that used significant unobservable inputs (Level 3) in determining fair value and there were no transfers into or out of Level 3 during the six months ended May 31, 2022.

 

C. Securities Transactions and Investment Income

Securities transactions are recorded as of the trade date. Realized gains and losses from securities transactions are recorded on the specific identification in accordance with GAAP. Dividend income and capital gains distributions, if any, are recorded on the ex-dividend date. Interest income, if any, is recorded on the accrual basis.

 

14 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Notes to Financial Statements May 31, 2022 (Unaudited)

 

D. Dividends and Distributions to Shareholders

Dividends from net investment income of the Fund, if any, are declared and paid annually or as the Board may determine from time to time. Distributions of net realized capital gains earned by the Fund, if any, are distributed at least annually.

 

E. Federal Tax and Tax Basis Information

The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. GAAP. Reclassifications are made to the Fund’s capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carryforwards) under income tax regulations. The amounts and characteristics of tax basis distributions and composition of distributable earnings/(accumulated losses) are finalized at fiscal year-end; accordingly, tax basis balances have not been determined as of May 31, 2022.

 

The tax character of the distributions paid during the fiscal year ended November 30, 2021 was as follows:

 

    Ordinary Income     Long-Term Capital Gain     Return of Capital  
November 30, 2021                  
Barron’s 400SM ETF   $ 1,258,708     $     $  

 

The character of distributions made during the year may differ from its ultimate characterization for federal income tax purposes.

 

Under current law, capital losses maintain their character as short-term or long-term and are carried forward to the next tax year without expiration. As of November 30, 2021, the following amounts are available as carry forwards to the next tax year:

 

Fund   Short-Term     Long-Term  
Barron’s 400SM ETF   $ 37,589,993     $ 17,906,661  

 

The Barron’s 400SM ETF used capital loss carryovers during the year ended November 30, 2021 in the amount of $538,562.

 

As of May 31, 2022, the cost of investments for federal income tax purposes and accumulated net unrealized appreciation/(depreciation) on investments were as follows:

 

    Barron’s 400SM ETF  
Gross appreciation (excess of value over tax cost)   $ 19,012,257  
Gross depreciation (excess of tax cost over value)     (9,626,275 )
Net unrealized appreciation (depreciation)   $ 9,385,982  
Cost of investments for income tax purposes   $ 131,563,417  

 

The differences between book-basis and tax-basis are primarily due to the deferral of losses from wash sales and investments in partnerships. In addition, certain tax cost basis adjustments are finalized at fiscal year-end and therefore have not been determined as of May 31, 2022.

 

F. Income Taxes

No provision for income taxes is included in the accompanying financial statements, as the Fund intends to distribute to shareholders all taxable investment income and realized gains and otherwise comply with Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. The Fund evaluates tax positions taken (or expected to be taken) in the course of preparing the Fund’s tax returns to determine whether these positions meet a “more-likely-than-not” standard that, based on the technical merits, have a more than fifty percent likelihood of being sustained by a taxing authority upon examination. A tax position that meets the “more-likely-than-not” recognition threshold is measured to determine the amount of benefit to recognize in the financial statements.

 

As of and during the six months ended May 31, 2022, the Fund did not have a liability for any unrecognized tax benefits. The Fund files U.S. federal, state, and local tax returns as required. The Fund’s tax returns are subject to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return, but may extend to four years in certain jurisdictions. Tax returns for open years have incorporated no uncertain tax positions that require a provision for income taxes.

 

15 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Notes to Financial Statements May 31, 2022 (Unaudited)

 

G. Lending of Portfolio Securities

The Fund has entered into a securities lending agreement with State Street Bank & Trust Co. (“SSB”), the Fund’s lending agent. The Fund may lend its portfolio securities only to borrowers that are approved by SSB. The Fund will limit such lending to not more than 33 1/3% of the value of its total assets. The Fund’s securities held at SSB as custodian shall be available to be lent except those securities the Fund or ALPS Advisors, Inc. specifically identifies in writing as not being available for lending. The borrower pledges and maintains with the Fund collateral consisting of cash (U.S. Dollars only), securities issued or guaranteed by the U.S. government or its agencies or instrumentalities, and cash equivalents (including irrevocable bank letters of credit) issued by a person other than the borrower or an affiliate of the borrower. The initial collateral received by the Fund is required to have a value of no less than 102% of the market value of the loaned securities for U.S equity securities and a value of no less than 105% of the market value for non-U.S. equity securities. The collateral is maintained thereafter, at a market value equal to not less than 102% of the current value of the U.S. equity securities on loan and not less than 105% of the current value of the non-U.S. equity securities on loan. The market value of the loaned securities is determined at the close of each business day and any additional required collateral is delivered to the Fund on the next business day. During the term of the loan, the Fund is entitled to all distributions made on or in respect of the loaned securities. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the customary time period for settlement of securities transactions.

 

Any cash collateral received is reinvested in a money market fund managed by SSB as disclosed in the Fund’s Schedule of Investments and is reflected in the Statements of Assets and Liabilities as a payable for collateral upon return of securities loaned. Non-cash collateral, in the form of securities issued or guaranteed by the U.S. government or its agencies or instrumentalities, is not disclosed in the Fund’s Statements of Assets and Liabilities as it is held by the lending agent on behalf of the Fund, and the Fund does not have the ability to re-hypothecate these securities. Income earned by the Fund from securities lending activity is disclosed in the Statement of Operations.

 

The following is a summary of the Fund's securities lending agreement and related cash and non-cash collateral received as of May 31, 2022:

 

    Market Value of Securities on Loan     Cash Collateral Received     Non-Cash Collateral Received     Total Collateral Received  
Barron's 400 ETF   $ 5,186,628     $ 2,349,632     $ 3,066,995     $ 5,416,627  

 

The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Fund benefits from a borrower default indemnity provided by SSB. SSB’s indemnity allows for full replacement of securities lent wherein SSB will purchase the unreturned loaned securities on the open market by applying the proceeds of the collateral, or to the extent such proceeds are insufficient or the collateral is unavailable, SSB will purchase the unreturned loan securities at SSB’s expense. However, the Fund could suffer a loss if the value of the investments purchased with cash collateral falls below the value of the cash collateral received.

 

The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged or securities loaned, and the remaining contractual maturity of those transactions as of May 31, 2022:

 

Barron's 400 ETF Remaining contractual maturity of the agreements

 

Securities Lending Transactions   Overnight & Continuous     Up to 30 days     30-90 days     Greater than 90 days     Total  
Common Stocks   $ 2,349,632     $     $     $     $ 2,349,632  
Total Borrowings                                     2,349,632  
Gross amount of recognized liabilities for securities lending (collateral received)                     $ 2,349,632  

 

 

3. INVESTMENT ADVISORY FEE AND OTHER AFFILIATED TRANSACTIONS

 

 

ALPS Advisors, Inc. (the “Adviser”) serves as the Fund’s investment adviser pursuant to an Investment Advisory Agreement with the Trust on behalf of the Fund (the “Advisory Agreement”). Pursuant to the Advisory Agreement, the Fund pays the Adviser an annual management fee for the services and facilities it provides, payable on a monthly basis at the annual rate of 0.65% of the Fund’s average daily net assets. From time to time, the Adviser may waive all or a portion of its fee.

 

Out of the unitary management fees, the Adviser pays substantially all expenses of the Fund, including the cost of transfer agency, custody, fund administration, legal, audit, trustees and other services, except for interest expenses, distribution fees or expenses, brokerage expenses, taxes and extraordinary expenses not incurred in the ordinary course of the Fund's business. The Adviser’s unitary management fee is designed to pay substantially all of the Fund’s expenses and to compensate the Adviser for providing services to the Fund.

 

16 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Notes to Financial Statements May 31, 2022 (Unaudited)

 

ALPS Fund Services, Inc., an affiliate of the Adviser, is the administrator of the Fund.

 

Prior to February 16, 2022, each Trustee received (1) a quarterly retainer of $10,000, (2) a per meeting fee of $5,000, (3) $1,500 for any special meeting held outside of a regularly scheduled board meeting, and (4) reimbursement for all reasonable out-of-pocket expenses relating to attendance at meetings. In addition, the Chairman of the Board and Chairman of the Audit Committee each received a quarterly retainer of $2,000, in connection with their respective roles. Effective February 16, 2022, each Trustee receives (1) a quarterly retainer of $20,000, (2) a per meeting fee of $10,000, (3) $2,500 for any special meeting held outside of a regularly scheduled board meeting, and (4) reimbursement for all reasonable out-of-pocket expenses relating to attendance at meetings. In addition, the Chairman of the Board receives a quarterly retainer of $5,000, the Chairman of the Audit Committee receives a quarterly retainer of $3,000, and the Chairman of the Nominating & Governance Committee receives a quarterly retainer of $2,000, each in connection with their respective roles.

 

4. PURCHASES AND SALES OF SECURITIES

 

For the six months ended May 31, 2022 the cost of purchases and proceeds from sales of investment securities, excluding in-kind transactions and short-term investments, were as follows:

 

Fund   Purchases     Sales  
Barron's 400 ETF   $ 71,896,343     $ 72,597,451  

 

For the six months ended May 31, 2022, the cost of in-kind purchases and proceeds from in-kind sales were as follows:

 

Fund   Purchases     Sales  
Barron's 400 ETF   $     $ 3,156,132  

 

For the six months ended May 31, 2022 the Barron's 400 ETF had in-kind net realized gains of $801,304.

 

Gains on in-kind transactions are not considered taxable for federal income tax purposes and losses on in-kind transactions are also not deductible for tax purposes.

 

5. CAPITAL SHARE TRANSACTIONS

 

Shares are created and redeemed by the Fund only in Creation Unit size aggregations of 25,000 Shares. Only broker-dealers or large institutional investors with creation and redemption agreements called Authorized Participants (“AP”) are permitted to purchase or redeem Creation Units from the Fund. Such transactions are generally permitted on an in-kind basis, with a balancing cash component to equate the transaction to the NAV per unit of the Fund on the transaction date. Cash may be substituted equivalent to the value of certain securities generally when they are not available in sufficient quantity for delivery, not eligible for trading by the AP or as a result of other market circumstances.

 

6. RELATED PARTY TRANSACTIONS

 

The Fund engaged in cross trades between other funds in the Trust during the six months ended May 31, 2022 pursuant to Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds to which the Adviser serves as the investment adviser. The Board previously adopted procedures that apply to transactions between the Funds of the Trust pursuant to Rule 17a-7. These transactions related to cross trades during the period complied with the requirements set forth by Rule 17a-7 and the Trust’s procedures.

 

Transactions related to cross trades during the six months ended May 31, 2022, were as follows:

 

Fund   Purchase cost paid     Sale proceeds received     Realized gain/(loss) on sales  
Barron's 400 ETF   $ 2,128,652     $ 304,289     $ (62,415 )

 

7. MARKET RISK

 

The Fund is subject to investment and operational risks associated with financial, economic and other global market developments and disruptions, including the recent spread of an infectious respiratory illness caused by a novel strain of coronavirus (known as COVID-19), which can negatively impact the securities markets and cause the Fund to lose value. Securities in the Fund’s portfolio may underperform in comparison to securities in general financial markets, a particular financial market or other asset classes due to a number of factors, including inflation (or expectations for inflation), deflation (or expectations for deflation), interest rates, global demand for particular products or resources, market instability, debt crises and downgrades, embargoes, tariffs, sanctions and other trade barriers, regulatory events, other governmental trade or market control programs and related geopolitical events. In addition, the value of the Fund’s investments may be negatively affected by the occurrence of global events such as war, terrorism, environmental disasters, natural disasters or events, country instability, and infectious disease epidemics or pandemics.

 

17 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Notes to Financial Statements May 31, 2022 (Unaudited)

 

The spread of COVID-19 has caused volatility, severe market dislocations and liquidity constraints in many markets, including markets for the securities the Fund holds, and may adversely affect the Fund’s investments and operations. The transmission of COVID-19 and efforts to contain its spread have resulted in travel restrictions and disruptions, closed international borders, enhanced health screenings at ports of entry and elsewhere, disruption of and delays in healthcare service preparation and delivery, quarantines, event and service cancellations or interruptions, disruptions to business operations and supply chains, and a reduction in consumer and business spending, as well as general concern and uncertainty that has negatively affected the economy. These disruptions have led to instability in the market place and the jobs market. The impact of COVID-19 could adversely affect the economies of many nations or the entire global economy, the financial well-being and performance of individual issuers, borrowers and sectors and the health of the markets generally in potentially significant and unforeseen ways.

 

The foregoing could lead to a significant economic downturn or recession, increased market volatility, a greater number of market closures, higher default rates and adverse effects on the values and liquidity of the Fund’s securities or other assets. Such impacts may adversely affect the performance of the Fund.

 

8. SUBSEQUENT EVENTS

 

Effective as of the close of business on March 31, 2022, Deloitte & Touche LLP (“Deloitte”) resigned as the independent registered public accounting firm for the Fund. The report of Deloitte on the Fund’s financial statements as of and for the fiscal years or periods ended November 30, 2021 and November 30, 2020 did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainties, audit scope or accounting principles. During the Fund’s fiscal year or period ended November 30, 2021 and November 30, 2020, and through March 31, 2022, there were no disagreements between the Fund and Deloitte on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Deloitte, would have caused it to make reference to the subject matter of the disagreements in its report on the financial statements of the Fund for such year or period. During the Fund’s fiscal years or periods ended November 30, 2021 and November 30, 2020, there were no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)).

 

During the Fund’s fiscal year or period ended November 30, 2021 and November 30, 2020, and during the subsequent interim period through March 31, 2022, neither the Fund, nor anyone on their behalf, consulted with Deloitte, on behalf of the Fund, regarding any matter that was either the subject of a “disagreement,” as defined in Item 304(a)(1)(iv) of Regulation S-K under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the instructions thereto, or a “reportable event,” as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act.

 

On June 21, 2022, upon the recommendation of the Fund’s Audit Committee, the Board of Trustees of the Fund approved the engagement of BBD, LLP (“BBD”) as the independent registered public accounting firm for the Fund for the fiscal year ending November 30, 2022. The Board and its Audit Committee considered the engagement of BBD in connection with the resignation of the Fund’s former independent registered accounting firm on March 31, 2022.

 

18 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Additional Information May 31, 2022 (Unaudited)

 

PROXY VOTING RECORDS, POLICIES AND PROCEDURES

 

Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 and a description of the Fund’s proxy voting policies and procedures used in determining how to vote for proxies are available without charge on the SEC’s website at www.sec.gov and upon request, by calling (toll-free) 1-866-759-5679.

 

PORTFOLIO HOLDINGS

 

The Fund files a complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-PORT within 60 days after the end of the period. Copies of the Fund’s Form N-PORT are available without a charge, upon request, by contacting the Fund at 1-866-759-5679 and on the SEC’s website at https://www.sec.gov.

 

TAX INFORMATION

 

The Barron’s 400 ETF designates the following as a percentage of taxable ordinary income distributions, or up to the maximum amount allowable, for the calendar year ended December 31, 2021:

 

  Qualified Dividend Income Dividend Received Deduction
Barron's 400 ETF 100.00% 100.00%

 

In early 2022, if applicable, shareholders of record received this information for the distributions paid to them by the Fund during the calendar year 2021 via Form 1099. The Fund will notify shareholders in early 2023 of amounts paid to them by the Fund, if any, during the calendar year 2022.

 

LICENSING AGREEMENT

 

MarketGrader Capital, LLC (the “Index Provider”) has entered into a license agreement with Dow Jones & Company to use the “Barron’s” name and certain related intellectual property in connection with the Underlying Index. The Index Provider also has entered into a license and services agreement with its parent company, MarketGrader.com, to use the methodology for constructing the Underlying Index. The Index Provider in turn has entered into the Sublicense Agreement with ALPS Advisers, Inc. to use the Underlying Index. The following disclosure relates to such licensing agreements:

 

The Barron’s 400 ETF (the “Fund”) is not sponsored, managed or advised by the Index Provider. The Index Provider makes no representation or warranty, express or implied, to the owners of the Fund or any member of the public regarding the advisability of investing in securities generally or in the Fund particularly or the ability of the Underlying Index to track the performance of a market or sector. The Index Provider’s only relationship to ALPS Advisors, Inc. (the “Adviser”) or the Fund is the licensing of certain service marks and trade names of the Index Provider and of the Underlying Index that is determined, composed and calculated by the Index Provider without regard to the Adviser or the Fund. The Index Provider has no obligation to take the needs of the Adviser or the Fund or the owners of the Fund into consideration in determining, composing or calculating the Underlying Index.

 

THE INDEX PROVIDER DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN AND THE INDEX PROVIDER SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. THE INDEX PROVIDER MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE ADVISER, THE FUND, OWNERS OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. THE INDEX PROVIDER MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE UNDERLYING INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE INDEX PROVIDER HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

 

“The Barron’s 400 IndexSM” is calculated and published by MarketGrader Capital, LLC (“MarketGrader”). “Barron’s,” “Barron’s 400” and “Barron’s 400 Index” are trademarks or service marks of DJC & Company, Inc. or its affiliates and have been licensed to MarketGrader and sublicensed for certain purposes by Barron’s 400 Exchange Traded Fund, a sub-fund of that certain ALPS ETF Trust, a Delaware Statutory Trust (the “Sub-Licensee”). The Barron’s 400SM ETF (the “Product”) is not sponsored or advised by DJC or its affiliates. DJC and its affiliates make no representation or warranty, express or implied, to the owners of the Fund or any member of the public regarding the advisability of trading in the Fund particularly. DJC and its affiliates’ only relationship to the Licensee is the licensing of certain trademarks and trade names of DJC. The Barron's 400 IndexSM is determined, composed and calculated by MarketGrader without regard to DJC. DJC has no obligation to take the needs of the Licensee or the owners of the Fund into consideration in connection with its licensing of the Barron’s 400 Index to MarketGrader or the sublicense to Licensee. DJC and its affiliates are not responsible for and have not participated in the calculation of the Barron's 400 IndexSM or in the determination of the timing of, prices at, or quantities of the Fund to be sold or in the determination or calculation of the equation by which the Product are to be converted into cash. DJC and its affiliates have no obligation or liability in connection with the administration, marketing or trading of the Barron’s 400 Index or the Product.

 

19 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Additional Information May 31, 2022 (Unaudited)

 

DOW JONES DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE BARRON’S 400 INDEX OR ANY DATA INCLUDED THEREIN AND DOW JONES AND ITS AFFILIATES SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. DOW JONESAND ITS AFFILIATES MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE LICENSEE, OWNERS OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE BARRON’S 400 INDEX OR ANY DATA INCLUDED THEREIN. DOW JONES AND ITS AFFILIATES MAKE NO EXPRESS OR IMPLIED WARRANTIES. AND EXPRESSLY DISCLAIM ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE BARRON’S 400 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL DOW JONES AND ITS AFFILIATES HAVE ANY LIABILITY FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES OR LOSSES, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN DJC AND THE LICENSEE, OTHER THAN THE LICENSORS OF MARKETGRADER.

 

The Adviser does not guarantee the accuracy and/or the completeness of the Underlying Index or any data included therein, and the Adviser shall have no liability for any errors, omissions or interruptions therein. The Adviser makes no warranty, express or implied, as to results to be obtained by the Fund, owners of the Shares of the Fund or any other person or entity from the use of the Underlying Index or any data included therein. The Adviser makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to the Underlying Index or any data included therein. Without limiting any of the foregoing, in no event shall the Adviser have any liability for any special, punitive, direct, indirect or consequential damages (including lost profits) arising out of matters relating to the use of the Underlying Index, even if notified of the possibility of such damages.

 

20 | May 31, 2022

     

 

Barron’s 400SM ETF

 

Liquidity Risk Management Program May 31, 2022 (Unaudited)

 

In compliance with the Securities and Exchange Commission’s liquidity risk management rule (the “Liquidity Rule”), the ALPS ETF Trust (the “Trust”) has established a liquidity risk management program (the “Program”) to govern the Trust’s approach to managing liquidity risk for each series of the Trust (each a “Fund”). The Program is overseen by the Liquidity Committee (the “Committee”), a committee comprised of representatives of the Trust’s investment adviser, ALPS Advisors, Inc. The Trust’s Board of Trustees (the “Board”) has approved the designation of the Committee to oversee the Program.

 

The Program’s principal objectives include supporting each Fund’s compliance with limits on investments in illiquid assets and assessing and managing the risk that a Fund will be unable to meet its redemption obligations without significant dilution of remaining investors’ interests in the Fund. The Program includes a number of elements that support the management and assessment of liquidity risk, including an annual assessment of factors that influence a Fund’s liquidity and, for Funds that are not “In-Kind ETFs,” the periodic classification and re-classification of such Fund’s investments into groupings that reflect the Committee’s assessment of their liquidity under current market conditions.

 

At a meeting of the Board held on March 7, 2022, the Trustees received a report from the Committee regarding the design and operational effectiveness of the Program for the period January 1, 2021 through December 31, 2021 (the “Period”). The Committee determined, and reported to the Board, that the Program has been operating effectively to assess and manage each Fund’s liquidity risk and has been and continues to be adequately and effectively implemented to monitor and (as applicable) respond to the Funds’ liquidity developments.

 

The Committee reported that during the period covered by the report, there were no liquidity events that impacted the Funds or their ability to timely meet redemptions without dilution to existing shareholders. The report also discussed notable events affecting liquidity over the Period, including extended market holidays and closures in certain countries. Among other things, the Committee’s report noted that no Fund is required to have a highly liquid investment minimum based either on its status as an In-Kind ETF or on its ability to rely on another exemption under the Liquidity Rule. The Committee’s report further noted that no material changes have been made to the Program since its implementation.

 

21 | May 31, 2022

     

 

 

 

Must be accompanied or preceded by a prospectus.

ALPS Portfolio Solutions Distributor, Inc., a FINRA member, is the Distributor for the Barron’s 400SM ETF.