Table of Contents

 

Performance Overview 1
Disclosure of Fund Expenses 14
Report of Independent Registered Public Accounting Firm 15
Financial Statements  
Schedule of Investments 16
Statements of Assets and Liabilities 26
Statements of Operations 27
Statements of Changes in Net Assets 28
Financial Highlights 32
Notes to Financial Statements 36
Additional Information 44
Board Considerations Regarding Approval of Investment Advisory Agreement 46
Trustees & Officers 48

 

alpsfunds.com

 

 

ALPS | O’Shares U.S. Quality Dividend ETF  
Performance Overview June 30, 2022 (Unaudited)

 

Performance Objective

 

The ALPS|O’Shares U.S. Quality Dividend ETF (the "Fund") seeks investment results that track the performance, before fees and expenses, of the O'Shares U.S. Quality Dividend Index (the "Underlying Index").

  

The Underlying Index is designed to measure the performance of publicly-listed large-capitalization and mid-capitalization dividend-paying issuers in the United States that meet certain market capitalization, liquidity, high quality, low volatility and dividend yield thresholds, as determined by O'Shares Investment Advisers, LLC. The high quality and low volatility requirements are designed to reduce exposure to high dividend equities that have experienced large price declines. The constituents of the Underlying Index are selected from the S-Network U.S. Equity Large-Cap 500 Index.

  

Performance Overview  

The ALPS|O’Shares U.S. Quality Dividend ETF generated a total return of -2.38% for the trailing twelve-month period ended June 30, 2022, slightly underperforming the Fund’s Underlying Index, which returned -1.90%. The Fund outperformed both the S&P 500® Index (“S&P 500®”) and the Russell 1000® Value Index, which returned -10.62% and -6.82%, respectively for the same period.

  

The trailing twelve-month yield for the Fund’s underlying constituents as of June 30, 2022 was 1.88% vs. 1.70% for the S&P 500®.

  

The S&P 500® returned -10.62% for the trailing twelve-month (TTM) period ended June 30, 2022, in clear correction territory from its all-time high at the beginning of 2022. Persistent inflation with U.S. Consumer Price Index (CPI) surging to 9.1% in June, the war in Ukraine, and slowing global growth caused U.S. equity multiples and prices to contract, with growth-heavy sectors and companies falling the hardest. The Federal Reserve began to raise interest rates and tighten monetary policy early in January, which conceded a sharp rise in U.S. government bond yields where the U.S. government 10-year yield broke above 3.5%, both serving as a catalyst for equities to retreat. Main macroeconomic talking points throughout the TTM period centered on inflation no longer being transitory (i.e. persistent inflation), commodity prices surging, weakening consumer spending, along with GDP forecasts pointing towards a recession. Pro-cyclical sectors proved to be a safe haven amidst inflationary pressures, with energy benefitting from sustained higher oil and gas prices. Although the Federal Reserve looks to implement a soft-landing where monetary tightening won’t cause a severe recession, they will have their work cut out for them as the total assets of the Federal Reserve currently sit near peak levels following years of quantitative easing (QE). As earnings season approaches for Q2 2022, U.S. stocks have come to a fork in the road, where the positive scenario of sustained profits and earnings growth could lead to a bottom in equity prices. On the other hand, reduced margins and negative revisions to the earnings picture could lead to yet another round of sell-offs. Despite the uncertainty and recession fears heading into the second half of 2022, global travel has surpassed 2019 numbers in many metrics, commodity prices and oil have pulled back to more reasonable levels, and U.S. equity prices have reached bear market territory from their highs, leading to attractive valuations across sectors where much of the negative forecasts and fiscal tightening has been baked in.

  

When compared to the S&P 500®, the relative outperformance for the Fund was largely driven by an overweighting of +9.53% in Consumer Staples, which contributed +1.68% to the outperformance. However, the negative allocation effect was mainly attributed to the relative underweight of - 3.34% in Energy, which detracted -1.49% from performance. The Fund saw a positive impact (+7.24%) from security selection compared to the S&P 500®. The Fund’s Health Care positions exhibited the strongest positive contribution (+2.17%) to security selection (selection effect) for the year compared to the S&P 500®, with names in Financials detracting from the overall security selection effect (-0.35%).

  

The best performing stocks in the Fund for the period were Eli Lilly and Co. (LLY), which increased +43.26%, and AbbVie Inc. (ABBV), which gained +42.23%. Other top performers included Pfizer Inc. (PFE), which rose +38.42%, and Northrop Grumman Corp. (NOC), which climbed 33.83%. The largest detractors were T. Rowe Price Group (TROW), which decreased by -40.84%, Target Corp. (TGT), which fell -40.67%, and eBay Inc. (EBAY), losing -39.83%.

  

Looking forward we believe the Fund’s methodology of selecting large-cap and mid-cap companies in the U.S. with fundamental determinates including quality, low volatility and dividend growth, provides a cost-efficient core investment holding.

  

Performance (as of June 30, 2022)

 

  1 Year 5 Year Since Inception^
ALPS | O'Shares U.S. Quality Dividend ETF – NAV -2.38% 9.11% 9.60%
ALPS | O'Shares U.S. Quality Dividend ETF – Market Price* -2.33% 9.11% 9.60%
O'Shares U.S. Quality Dividend Index** -1.90% 9.66% 10.15%
Russell 1000® Value Index -6.82% 7.17% 7.56%

 

Total Expense Ratio (per the current prospectus) is 0.48%.

 

Performance data quoted represents past performance. The Fund adopted the historical performance of the O'Shares U.S. Quality Dividend ETF (the "Predecessor Fund") as the result of a reorganization in which the Fund acquired all of the assets, subject to liabilities, of the Predecessor Fund on June 17, 2022. The returns presented for the Fund for periods prior to June 17, 2022 reflect the performance of the Predecessor Fund. At the time of the reorganization, the investment objectives of the Fund and the Predecessor Fund were identical and the investment strategies of the Fund and the Predecessor Fund were substantially the same. Previously, the Predecessor Fund had adopted the historical performance of the O’Shares FTSE U.S. Quality Dividend ETF (the “Previous Predecessor Fund”), a series of FQF Trust, as the result of a reorganization in which the Predecessor Fund acquired all of the assets, subject to liabilities, of the Previous Predecessor Fund on June 28, 2018. The returns presented for the Predecessor Fund for periods prior to June 28, 2018 reflect the performance of the Previous Predecessor Fund. At the time of the reorganization, the investment objectives of the Previous Predecessor Fund and the Predecessor Fund were identical and the investment strategies of the Previous Predecessor Fund and the Predecessor Fund were substantially the same. Effective June 1, 2020, the Predecessor Fund’s underlying index was changed to the Underlying Index from the FTSE USA Qual/Vol/Yield Factor 5% Capped Index (the “Former Index”). Thus, Predecessor Fund performance shown through May 31, 2020 reflects the Predecessor Fund seeking to track the performance of the Former Index, and Predecessor Fund performance shown beginning June 1, 2020 reflects the Predecessor Fund seeking to track the performance of the Underlying Index. In addition, the Underlying Index performance shown reflects the blended performance of the Former Index through May 31, 2020 and the Underlying Index thereafter. 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 1.866.675.2639.

 

1 | June 30, 2022

 

 

ALPS | O’Shares U.S. Quality Dividend ETF  
Performance Overview June 30, 2022 (Unaudited)

 

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 commencement date was July 14, 2015.

 

* 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 shares, 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 O’Shares U.S. Quality Dividend Index performance information reflects the blended performance of the FTSE USA Qual/Vol/Yield Factor 5% Capped Index through May 31, 2020 and the O’Shares U.S. Quality Dividend Index thereafter.

 

The O’Shares U.S. Quality Dividend Index is designed to measure the performance of publicly-listed large-capitalization and mid-capitalization dividend-paying issuers in the United States that meet certain market capitalization, liquidity, high quality, low volatility and dividend yield thresholds. The high quality and low volatility requirements are designed to reduce exposure to high dividend equities that have experienced large price declines. The index is reported on a total return basis, which assumes reinvestment of any dividends and distributions realized during a given time period.

 

The Russell 1000® Value Index measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 companies with lower price-to-book ratios and lower expected growth values.

 

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

  

The Fund's shares are not individually redeemable. Investors buy and sell shares of the Fund on a secondary market. Only market makers or "authorized participants" may trade directly with the Fund, typically in blocks of 25,000 shares.

 

The ALPS | O’Shares U.S. Quality Dividend 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.

 

2 | June 30, 2022

 

 

ALPS | O’Shares U.S. Quality Dividend ETF  
Performance Overview June 30, 2022 (Unaudited)

 

Top 10 Holdings* (as of June 30, 2022)

 

Johnson & Johnson 5.79%
Procter & Gamble Co. 5.06%
Verizon Communications, Inc. 4.60%
Microsoft Corp. 4.30%
Pfizer, Inc. 4.12%
Home Depot, Inc. 3.71%
Lockheed Martin Corp. 3.45%
Apple, Inc. 3.34%
McDonald's Corp. 3.17%
UnitedHealth Group, Inc. 2.83%
Total % of Top 10 Holdings 40.37%

 

* % of Total Investments (excluding short term investments) Future holdings are subject to change.

 

Growth of $10,000 (as of June 30, 2022)

 

Comparison of Change in Value of $10,000 Investment in the Fund and the Indexes

 

 

 

Sector Allocation* (as of June 30, 2022)

 

Consumer, Non-cyclical 42.39%
Industrial 14.93%
Technology 14.21%
Consumer, Cyclical 13.23%
Communications 8.94%
Financial 6.30%
Total 100.00%

 

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.

 

3 | June 30, 2022

 

 

ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF  
Performance Overview June 30, 2022 (Unaudited)

 

Performance Objective

The ALPS|O’Shares U.S. Small-Cap Quality Dividend ETF (the "Fund") seeks investment results that track the performance, before fees and expenses, of the O'Shares U.S. Small-Cap Quality Dividend Index (the "Underlying Index").

 

The Underlying Index is designed to measure the performance of publicly-listed small-capitalization dividend-paying issuers in the United States that meet certain market capitalization, liquidity, high quality, low volatility and dividend yield thresholds, as determined by O'Shares Investment Advisers, LLC. The high quality and low volatility factors are designed to reduce exposure to high dividend equities that have experienced large price declines, as may occur with some dividend investing strategies. The constituents of the Underlying Index are selected from the S-Network U.S. Equity Mid/Small-Cap 2500 Index.

 

Performance Overview

The ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF, generated a total return of -8.12% for the trailing twelve-month period ended June 30, 2022, relatively in-line with the Fund’s Underlying Index, net of fees, which returned -7.66%. The Fund outperformed the Russell 2000 Value Index, which returned -16.28% for the same period.

 

The trailing-twelve-month (TTM) yield for the Fund’s underlying constituents as of June 30, 2022 was 1.95% vs. 2.50% for the Russell 2000 Value Index.

 

The Russell 2000 Value Index returned -16.28% for the trailing twelve-month period ended June 30, 2022, in clear correction territory from its all-time high at the beginning of 2022. Persistent inflation with U.S. Consumer Price Index (CPI) surging to 9.1% in June, the war in Ukraine, and slowing global growth caused U.S. equity multiples and prices to contract, with growth-heavy sectors and companies falling the hardest. The Federal Reserve began to raise interest rates and tighten monetary policy early in January, which conceded a sharp rise in U.S. government bond yields where the U.S. government 10-year yield broke above 3.5%, both serving as a catalyst for equities to retreat. Main macroeconomic talking points throughout the TTM period centered on inflation no longer being transitory (i.e. persistent inflation), commodity prices surging, weakening consumer spending, along with GDP forecasts pointing towards a recession. Pro-cyclical sectors proved to be a safe haven amidst inflationary pressures, with energy benefitting from sustained higher oil and gas prices. Although the Federal Reserve looks to implement a soft-landing where monetary tightening won’t cause a severe recession, they will have their work cut out for them as the total assets of the Federal Reserve currently sit near peak levels following years of quantitative easing (QE). As earnings season approaches for Q2 2022, U.S. stocks have come to a fork in the road, where the positive scenario of sustained profits and earnings growth could lead to a bottom in equity prices. On the other hand, reduced margins and negative revisions to the earnings picture could lead to yet another round of sell-offs. Despite the uncertainty and recession fears heading into the second half of 2022, global travel has surpassed 2019 numbers in many metrics, commodity prices and oil have pulled back to more reasonable levels, and U.S. equity prices have reached bear market territory from their highs, leading to attractive valuations across sectors where much of the negative forecasts and fiscal tightening has been baked in.

 

Compared to the Russell 2000 value Index, the Fund saw a positive impact of +0.44% from its sector allocation effect for the period. The underperformance in the TTM period was largely driven by relative overweighting to Consumer Discretionary sector (+4.47% overweight), while the Fund’s underweight allocation (-2.36% underweight) to Health Care contributed +0.93% to relative outperformance. The Fund saw a positive impact of +10.06% from its overall security selection, with Consumer Discretionary sector companies exhibiting the strongest positive contribution (+3.85%) to Fund outperformance. Industrials sector securities lagged all other sectors compared to the Russell 2000 Value Index, detracting -0.61% from relative performance.

 

The best performing stocks in the Fund for the period were Weis Markets Inc. (WMK), which increased +47.21%, and Murphy USA (MUSA), which saw a gain of +44.55%. Other top performers included H&R Block (HRB), rising +44.03%, and Otter Trail Corp. (OTTR), which climbed +41.23%. The largest detractors were Healthcare Services Group (HCSG), which decreased -42.30%, New York Times (NYT), which fell -35.53%, and M.D.C. Holdings (MDC), which lost -33.40%.

 

Looking forward, we believe the Fund’s methodology of selecting small-cap companies in the U.S. with fundamental determinates including quality, low volatility and dividend growth, provides a cost-efficient core investment holding.

 

Performance (as of June 30, 2022)

 

  1 Year 5 Year Since Inception^
ALPS | O'Shares U.S. Small-Cap Quality Dividend ETF – NAV -8.12% 6.75% 6.59%
ALPS | O'Shares U.S. Small-Cap Quality Dividend ETF – Market Price* -8.18% 6.71% 6.59%
O'Shares U.S. Small-Cap Quality Dividend Index** -7.66% 7.28% 7.12%
Russell 2000® Value Index -16.28% 4.89% 4.45%

 

Total Expense Ratio (per the current prospectus) is 0.48%.

 

Performance data quoted represents past performance. The Fund adopted the historical performance of the O'Shares U.S. Small-Cap Quality Dividend ETF (the "Predecessor Fund") as the result of a reorganization in which the Fund acquired all of the assets, subject to liabilities, of the Predecessor Fund on June 17, 2022. The returns presented for the Fund for periods prior to June 17, 2022 reflect the performance of the Predecessor Fund. At the time of the reorganization, the investment objectives of the Fund and the Predecessor Fund were identical and the investment strategies of the Fund and the Predecessor Fund were substantially the same. Effective May 4, 2018, the Predecessor Fund’s underlying index was changed from the FTSE USA Small Cap Qual/Vol/Yield Factor 3% Capped Index (the “Former Underlying Index 1”) to the FTSE USA Small Cap ex Real Estate 2Qual/Vol/Yield 3% Capped Factor Index (the “Former Underlying Index 2” and together with the Former Underlying Index 1, the “Former Underlying Indexes”). Effective June 1, 2020, the Predecessor Fund’s underlying index was changed from the Former Underlying Index 2 to the Underlying Index. Thus, Predecessor Fund performance shown prior to May 4, 2018 reflects the Predecessor Fund seeking to track the performance of the Former Underlying Index 1, Predecessor Fund performance shown from May 4, 2018 through May 31, 2020 reflects the Predecessor Fund seeking to track the performance of the Former Underlying Index 2, and Predecessor Fund performance shown beginning June 1, 2020 reflects the Predecessor Fund seeking to track the performance of the Underlying Index. 

 

4 | June 30, 2022

 

 

ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF  
Performance Overview June 30, 2022 (Unaudited)

 

In addition, the Underlying Index performance shown reflects the blended performance of the Former Underlying Index 1 through May 3, 2018, the Former Underlying Index 2 from May 4, 2018 through May 31, 2020 and the Underlying Index thereafter. 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 1.866.675.2639.

 

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 commencement date was December 30, 2016.

 

* 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 shares, 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 O’Shares U.S. Small-Cap Quality Dividend Index performance information reflects the blended performance of the FTSE USA Small Cap Qual/Vol/Yield 3% Capped Factor Index through May 3, 2018, the FTSE USA Small Cap ex Real Estate 2Qual/Vol/Yield 3% Capped Factor Index from May 4, 2018 through May 31, 2020 and the O’Shares U.S. Small-Cap Quality Dividend Index thereafter.

 

The O’Shares U.S. Small-Cap Quality Dividend Index is designed to reflect the performance of publicly-listed small-capitalization dividend paying issuers in the United States that meet certain market capitalization, liquidity, high quality, low volatility and dividend yield thresholds. The quality and low volatility requirements are designed to reduce exposure to high dividend equities that have experienced large price declines. The index is reported on a total return basis, which assumes reinvestment of any dividends and distributions realized during a given time period.

 

The Russell 2000® Value Index measures the performance of the small capitalization value sector of the U.S. equity market.

 

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

 

The Fund's shares are not individually redeemable. Investors buy and sell shares of the Fund on a secondary market. Only market makers or "authorized participants" may trade directly with the Fund, typically in blocks of 25,000 shares.

 

The ALPS | O’Shares U.S. Small-Cap Quality Dividend 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.

 

5 | June 30, 2022

 

 

ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF  
Performance Overview June 30, 2022 (Unaudited)

 

Top 10 Holdings* (as of June 30, 2022)

 

Service Corp. International 2.52%
Erie Indemnity Co. 2.51%
Amdocs, Ltd. 2.44%
Bunge, Ltd. 2.40%
Jack Henry & Associates, Inc. 2.39%
Juniper Networks, Inc. 2.32%
Premier, Inc. 2.09%
Cboe Global Markets, Inc. 2.07%
SEI Investments Co. 2.04%
Gentex Corp. 2.04%
Total % of Top 10 Holdings 22.82%

 

* % of Total Investments (excluding short term investments) Future holdings are subject to change.

 

Growth of $10,000 (as of June 30, 2022)

 

Comparison of Change in Value of $10,000 Investment in the Fund and the Indexes

 

 

Sector Allocation* (as of June 30, 2022)

 

Consumer, Non-cyclical 24.04%
Financial 22.87%
Industrial 17.95%
Consumer, Cyclical 11.97%
Technology 11.09%
Utilities 6.81%
Communications 5.27%
Total 100.00%

 

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.

 

6 | June 30, 2022

 

 

 

ALPS | O’Shares Global Internet Giants ETF  
Performance Overview June 30, 2022 (Unaudited)

 

Performance Objective

The ALPS|O’Shares Global Internet Giants ETF (the "Fund") seeks investment results that track the performance, before fees and expenses, of the O'Shares Global Internet Giants Index (the "Underlying Index").

 

The Underlying Index is a rules-based index intended to give investors a means of tracking stocks exhibiting quality and growth characteristics in the "internet sector", as defined by O'Shares Investment Advisers, LLC.

 

Performance Overview

The ALPS|O’Shares Global Internet Giants ETF generated a total return of -52.52% for the twelve-month period ended June 30, 2022, in-line with the Fund’s Underlying Index, net of fees, which returned -52.36%. The Fund underperformed the NASDAQ 100 Index, which returned -20.38% for the same period.

 

The NASDAQ 100 Index returned -20.38% for the trailing twelve-month (TTM) period ended June 30, 2022, in clear correction territory from its all-time high at the beginning of 2022. Persistent inflation with U.S. Consumer Price Index (CPI) surging to 9.1% in June, the war in Ukraine, and slowing global growth caused global equity multiples and prices to contract, with growth-heavy sectors and companies falling the hardest. The Federal Reserve began to raise interest rates and tighten monetary policy early in January, which conceded a sharp rise in U.S. government bond yields where the U.S. government 10-year yield broke above 3.5%, both serving as a catalyst for equities to retreat. Main macroeconomic talking points throughout the TTM period centered on inflation no longer being transitory (i.e. persistent inflation), commodity prices surging, weakening consumer spending, along with GDP forecasts pointing towards a recession. Pro-cyclical sectors proved to be a safe haven amidst inflationary pressures, with energy benefitting from sustained higher oil and gas prices. Although the Federal Reserve looks to implement a soft-landing where monetary tightening won’t cause a severe recession, they will have their work cut out for them as the total assets of the Federal Reserve currently sit near peak levels following years of quantitative easing (QE). As earnings season approaches for Q2 2022, U.S. stocks have come to a fork in the road, where the positive scenario of sustained profits and earnings growth could lead to a bottom in equity prices. On the other hand, reduced margins and negative revisions to the earnings picture could lead to yet another round of sell-offs. Despite the uncertainty and recession fears heading into the second half of 2022, global travel has surpassed 2019 numbers in many metrics, commodity prices and oil have pulled back to more reasonable levels, and U.S. equity prices have reached bear market territory from their highs, leading to attractive valuations across sectors where much of the negative forecasts and fiscal tightening has been baked in.

 

The Fund underperformed the NASDAQ 100 Index, which returned -20.38% for the trailing twelve-month period ended June 30, 2022. The Fund holds roughly 73% U.S. equities and 27% foreign equities, with the majority of foreign holdings domiciled in China. The U.S. Dollar created a headwind for global equities, strengthening relative to global currencies and cementing its status as the global reserve currency, causing ex-U.S. markets to underperform. Global markets and economic activity were directly impacted by Russia’s invasion of Ukraine, as well as the combined impact of regulatory crackdowns and the zero COVID mandate in China pressuring supply chains. For emerging economies, higher energy prices and inflation was uncontrollable, disproportionately impacting yields and output compared to developed economies. Energy and natural gas shortages stemming from Russia have exacerbated inflation, adding to currency devaluation across ex-U.S. countries. Value outperformed growth equities in global markets for the trailing twelve-month period, with cyclical sectors leading due to company pricing power amidst higher prices. Although global growth prospects remain murky, quantitative tightening is well on its way, with China ahead of the pack and beginning to stimulate its economy through easing monetary policies.

 

The best performing stocks in the Fund for the period were Palo Alto Networks (PANW US), which increased by +33.12%, and Kuaishou Technology (1024 HK), which saw a gain of +21.38%. Other top performers included Fortinet (FTNT US), which rose +18.77%, and JD.com (9618 HK), which climbed +8.08%. The largest detractors were THG PLC (THG LN), which decreased -86.06%, Asana Inc. (ASAN US), which fell -85.21%, and Kingsoft Cloud Holdings Ltd (KC US), which lost -83.38%.

 

Looking forward, we believe the Fund’s rules-based approach of investing in some of the largest global companies that derive most of their revenue from the internet technology and e-commerce business segments with above-average growth potential provides a quality and differentiated investment holding.

 

Performance (as of June 30, 2022)

 

  1 Year Since Inception^
ALPS | O'Shares Global Internet Giants ETF – NAV -52.52% 1.98%
ALPS | O'Shares Global Internet Giants ETF – Market Price* -52.48% 2.01%
O'Shares Global Internet Giants Index -52.36% 2.49%
NASDAQ 100 Index -20.38% 13.43%

 

Total Expense Ratio (per the current prospectus) is 0.48%.

 

Performance data quoted represents past performance. The Fund adopted the historical performance of the O'Shares Global Internet Giants ETF (the "Predecessor Fund") as the result of a reorganization in which the Fund acquired all of the assets, subject to liabilities, of the Predecessor Fund on June 17, 2022. The returns presented for the Fund for periods prior to June 17, 2022 reflect the performance of the Predecessor Fund. At the time of the reorganization, the investment objectives of the Fund and the Predecessor Fund were identical and the investment strategies of the Fund and the Predecessor Fund were substantially the same. 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 1.866.675.2639.

 

7 | June 30, 2022

 

 

ALPS | O’Shares Global Internet Giants ETF  
Performance Overview June 30, 2022 (Unaudited)

 

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 commencement date was June 5, 2018.

 

* 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 shares, 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 O’Shares Global Internet Giants Index is a rules-based index intended to give investors a means of tracking stocks exhibiting quality and growth characteristics in the internet technology and e-commerce business segments and pass screens for gross margin and cash burn sustainability. Companies included in the Underlying Index derive at least 50% of their revenues from a) internet technology companies whose principal business is to provide the technologies that support internet commerce; and b) internet commerce companies whose principal business is to sell products and services via the internet. The index is reported on a total return basis, which assumes reinvestment of any dividends and distributions realized during a given time period.

 

The NASDAQ 100 Index includes 100 of the largest domestic and international non-financial companies listed on the Nasdaq Stock Market based on market capitalization.

 

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

 

The Fund's shares are not individually redeemable. Investors buy and sell shares of the Fund on a secondary market. Only market makers or "authorized participants" may trade directly with the Fund, typically in blocks of 25,000 shares.

 

The ALPS | O’Shares Global Internet Giants 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.

 

Top 10 Holdings* (as of June 30, 2022)

 

Microsoft Corp. 6.31%
Alphabet, Inc. 6.17%
Amazon.com, Inc. 4.77%
Meituan 2.60%
Tencent Holdings, Ltd. 2.46%
Snowflake, Inc. 1.94%
Meta Platforms, Inc. 1.91%
Pinduoduo, Inc. 1.77%
Sea, Ltd. 1.56%
Alibaba Group Holding, Ltd. 1.55%
Total % of Top 10 Holdings 31.04%

 

Country Exposure* (as of June 30, 2022)

 

United States 70.36%
China 14.02%
Israel 3.51%
Germany 2.81%
Singapore 1.56%
Sweden 1.18%
Canada 1.13%
Norway 1.08%
Argentina 1.08%
Australia 0.93%
Netherlands 0.93%
New Zealand 0.73%
Japan 0.68%
Total 100.00%

 

* % of Total Investments (excluding short term investments)

 

Future holdings are subject to change.

 

8 | June 30, 2022

 

 

ALPS | O’Shares Global Internet Giants ETF  
Performance Overview June 30, 2022 (Unaudited)

 

Growth of $10,000 (as of June 30, 2022)

 

Comparison of Change in Value of $10,000 Investment in the Fund and the Indexes

 

 

 

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.

 

9 | June 30, 2022

 

 

ALPS | O’Shares Europe Quality Dividend ETF  
Performance Overview June 30, 2022 (Unaudited)

 

Performance Objective

The ALPS|O’Shares Europe Quality Dividend ETF (the "Fund") seeks investment results that track the performance, before fees and expenses, of the O'Shares Europe Quality Dividend Index (the "Underlying Index").

 

The Underlying Index is designed to measure the performance of publicly-listed large-capitalization and mid-capitalization dividend-paying issuers in Europe that meet certain market capitalization, liquidity, high quality, low volatility and dividend yield thresholds, as determined by O'Shares Investment Advisers, LLC. The high quality and low volatility requirements are designed to reduce exposure to high dividend equities that have experienced large price declines. The constituents of the Underlying Index are selected from the S-Network Europe Equity 500 Index.

 

Performance Overview

The ALPS|O’Shares Europe Quality Dividend ETF generated a total return of -17.29% for the trailing twelve-month (TTM) period ended June 30, 2022, relatively in-line with the Fund’s Underlying Index, net of fees, which returned -17.18%. The Fund outperformed both the Morningstar Developed Markets ex-North America Index (MSDINUS Index) and the Euro Stoxx 50 Net Return USD Index, which returned -18.72% and -23.13%, respectively for the same period.

 

The TTM yield for the Fund’s constituents as of 06/30/2022 was 2.78% vs. 3.51% for the MSDINUS Index.

 

European stocks, as represented by the Euro Stoxx 50 Net Return USD Index, returned -23.13% for the TTM period ended June 30, 2022. The U.S. Dollar created a headwind for international equities, strengthening relative to the Euro, causing ex-U.S. markets to underperform.

 

Eurozone markets and European economic activity were directly impacted by Russia’s invasion of Ukraine, which remains a key risk in the second half of 2022. Energy and natural gas shortages stemming from Russia have exacerbated inflation and kept energy prices high, with Eurozone Consumer Price Index (CPI) remaining above 5.4% through June of 2022. Value outperformed growth equities in international developed markets for the trailing twelve-month period, with cyclical sectors including Energy and Utilities outperforming due to company pricing power amidst higher prices. The ECB echoed the Fed’s hawkish tone in European markets, stating it would plan to enact the first rate hike in 11 years, with more aggressive hikes to follow as long as inflation stays elevated. Future growth prospects will remain predicated on central bank policies and a resolution to the war in Ukraine. Despite the uncertainty and recession fears heading into the second half of 2022, global travel has surpassed 2019 numbers in many metrics, valuations have normalized to attractive levels, and the potential resolution in Ukraine are positive catalysts to help spur economic activity in developed markets.

 

Compared to the Morningstar Developed Markets ex-North America Index, the Fund saw a slightly negative impact of -0.29% from its sector allocation where a relative overweight of +11.99% in Health Care contributed +0.87% to Fund outperformance. The Fund’s underweight of -9.66% in the Financials sector was the largest detractor compared to the MSDINUS Index. The Fund received a boost from security selection compared to the MSDINUS Index, with +2.38% of positive performance attributed to its selection effect.

 

From a geographical perspective, the highest contribution to return was attributed to holdings based in Denmark, which contributed -0.06% towards overall Fund performance. The Fund’s performance was adversely impacted by holdings based in Switzerland, which detracted -4.09% from the Fund.

 

The best performing stocks for the trailing twelve-month period were Novo Nordisk A/S (NOVOB DC), which increased +33.53%, Swedish Match AB (SWMA SS), which returned +20.61%, and Experian PLC (EXPN LN), which gained +17.57%. The worst performing stocks were Deutsche Post AG (DPW GR), losing -43.06%, Kone Oyj (KNEBV FH), which fell -40.03%, and Schindler Holding AG (SCHP SW), which decreased by -39.84%.

 

Looking forward, we believe the Fund’s methodology of selecting large-cap and mid-cap companies in Europe with fundamental determinates including quality, low volatility and dividend growth, provides a cost-efficient core investment holding.

 

Performance (as of June 30, 2022)

 

  1 Year 5 Year Since Inception^
ALPS | O'Shares Europe Quality Dividend ETF – NAV -17.29% 1.41% 1.55%
ALPS | O'Shares Europe Quality Dividend ETF – Market Price* -17.59% 1.31% 1.57%
O'Shares Europe Quality Dividend Index** -17.18% 1.88% 1.98%
EURO STOXX 50 Net Return USD Index -23.13% 0.71% 1.56%

 

Total Expense Ratio (per the current prospectus) is 0.48%.

 

Performance data quoted represents past performance. The Fund adopted the historical performance of the O'Shares Europe Quality Dividend ETF (the "Predecessor Fund") as the result of a reorganization in which the Fund acquired all of the assets, subject to liabilities, of the Predecessor Fund on June 17, 2022. The returns presented for the Fund for periods prior to June 17, 2022 reflect the performance of the Predecessor Fund. At the time of the reorganization, the investment objectives of the Fund and the Predecessor Fund were identical and the investment strategies of the Fund and the Predecessor Fund were substantially the same. Previously, the Predecessor Fund had adopted the historical performance of the O’Shares FTSE Europe Quality Dividend ETF (the “Previous Predecessor Fund”), a series of FQF Trust, as the result of a reorganization in which the Predecessor Fund acquired all of the assets, subject to liabilities, of the Previous Predecessor Fund on June 28, 2018. The returns presented for the Predecessor Fund for periods prior to June 28, 2018 reflect the performance of the Previous Predecessor Fund. At the time of the reorganization, the investment objectives of the Previous Predecessor Fund and the Predecessor Fund were identical and the investment strategies of the Previous Predecessor Fund and the Predecessor Fund were substantially the same.

 

10 | June 30, 2022

 

 

ALPS | O’Shares Europe Quality Dividend ETF  
Performance Overview June 30, 2022 (Unaudited)

 

Effective June 1, 2020, the Predecessor Fund’s underlying index was changed to the Underlying Index from the FTSE Developed Europe Qual/Vol/Yield 5% Capped Factor Index (the “Former Index”). Thus, Predecessor Fund performance shown through May 31, 2020 reflects the Predecessor Fund seeking to track the performance of the Former Index, and Predecessor Fund performance shown beginning June 1, 2020 reflects the Predecessor Fund seeking to track the performance of the Underlying Index. In addition, the Underlying Index performance shown reflects the blended performance of the Former Index through May 31, 2020 and the Underlying Index thereafter. 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 1.866.675.2639.

 

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 commencement date was August 19, 2015.

 

* 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 shares, 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 O’Shares Europe Quality Dividend Index performance information reflects the blended performance of the FTSE Developed Europe Qual/Vol/Yield 5% Capped Factor Index through May 31, 2020 and the O’Shares Europe Quality Dividend Index thereafter.

 

The O’Shares Europe Quality Dividend Index is designed to reflect the performance of publicly-listed large-capitalization and mid-capitalization dividend paying issuers in Europe that meet certain market capitalization, liquidity, high quality, low volatility and high dividend yield thresholds. The quality and low volatility requirements are designed to reduce exposure to high dividend equities that have experienced large price declines. The index is reported on a Net Total Return basis which assumes reinvestment of any dividends and distributions realized during a given time period (net of any amounts of withholding tax).

 

The EURO STOXX 50 Net Return USD Index represents the performance of the 50 largest companies among the 20 supersectors in terms of free-float market cap in Eurozone countries.

 

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

 

The Fund's shares are not individually redeemable. Investors buy and sell shares of the Fund on a secondary market. Only market makers or "authorized participants" may trade directly with the Fund, typically in blocks of 25,000 shares.

 

The ALPS | O’Shares Europe Quality Dividend 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.

 

11 | June 30, 2022

 

 

ALPS | O’Shares Europe Quality Dividend ETF  
Performance Overview June 30, 2022 (Unaudited)

 

Top 10 Holdings* (as of June 30, 2022)

 

Nestle SA 5.92%
Roche Holding AG 5.70%
Novo Nordisk A/S 5.50%
LVMH Moet Hennessy Louis Vuitton SE 3.75%
AstraZeneca PLC 3.42%
Unilever PLC 3.38%
Novartis AG 3.31%
L'Oreal SA 2.82%
SAP SE 2.69%
GSK PLC 2.62%
Total % of Top 10 Holdings 39.11%

 

Country Exposure* (as of June 30, 2022)

 

Switzerland 24.03%
France 19.37%
Great Britain 17.56%
Germany 10.43%
Sweden 9.63%
Denmark 9.45%
Netherlands 4.54%
Spain 3.18%
Finland 1.81%
Total 100.00%

 

Sector Allocation* (as of June 30, 2022)

 

Consumer, Non-cyclical 54.37%
Industrial 16.65%
Consumer, Cyclical 10.87%
Financial 5.91%
Technology 4.76%
Communications 4.19%
Utilities 3.25%
Total 100.00%

 

* % of Total Investments (excluding short term investments)

 

Future holdings are subject to change.

 

12 | June 30, 2022

 

 

ALPS | O’Shares Europe Quality Dividend ETF  
Performance Overview June 30, 2022 (Unaudited)

 

Growth of $10,000 (as of June 30, 2022)

 

Comparison of Change in Value of $10,000 Investment in the Fund and the Indexes

 

 

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.

 

13 | June 30, 2022

 

 

ALPS ETF Trust  
Disclosure of Fund Expenses June 30, 2022 (Unaudited)

 

Shareholder Expense Example: As a shareholder of a 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 June 30, 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 1/1/22 Ending Account Value 6/30/22(a) Expense Ratio(a)   Expenses Paid During Period 1/1/22 - 6/30/22(b)(d)  
ALPS | O’Shares U.S. Quality Dividend ETF                                
Actual   $ 1,000.00     $ 873.00       0.48 %   $ 2.23  
Hypothetical (5% return before expenses)   $ 1,000.00     $ 1,022.41       0.48 %   $ 2.41  
                                 
ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF                                
Actual   $ 1,000.00     $ 858.60       0.48 %   $ 2.21  
Hypothetical (5% return before expenses)   $ 1,000.00     $ 1,022.41       0.48 %   $ 2.41  
                                 
ALPS | O’Shares Global Internet Giants ETF                                
Actual   $ 1,000.00     $ 548.70       0.48 %   $ 1.84  
Hypothetical (5% return before expenses)   $ 1,000.00     $ 1,022.41       0.48 %   $ 2.41  
                                 
ALPS | O’Shares Europe Quality Dividend ETF                                
Actual   $ 1,000.00     $ 776.30       0.48 %   $ 2.11  
Hypothetical (5% return before expenses)   $ 1,000.00     $ 1,022.41       0.48 %   $ 2.41  

 

(a) The actual return for the Fund prior to June 17, 2022 reflects the actual return of the respective Predecessor Fund.

(b) Annualized based on the Fund's most recent fiscal half-year expenses.

(c) 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 (181), divided by 365.

(d) Expenses paid for the Fund prior to June 17, 2022 reflect the expenses of the respective Predecessor Fund.

 

14 | June 30, 2022

 

 

ALPS ETF Trust
Report of Independent Registered Public Accounting Firm

 

To the Board of Trustees of ALPS ETF Trust and the Shareholders of ALPS | O’Shares U.S. Quality Dividend ETF, ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF, ALPS | O’Shares Global Internet Giants ETF, and ALPS | O’Shares Europe Quality Dividend ETF

 

Opinion on the Financial Statements

We have audited the accompanying statements of assets and liabilities of ALPS | O’Shares U.S. Quality Dividend ETF (previously, O’Shares U.S. Quality Dividend ETF), ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF (previously, O’Shares U.S. Small-Cap Quality Dividend ETF), ALPS | O’Shares Global Internet Giants ETF (previously, O’Shares Global Internet Giants ETF), and ALPS | O’Shares Europe Quality Dividend ETF (previously, O’Shares Europe Quality Dividend ETF), each a series of shares of beneficial interest in ALPS ETF Trust (the “Funds”), including the schedules of investments, as of June 30, 2022, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, the financial highlights as noted in the table below, and 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 Funds as of June 30, 2022, and the results of their operations for the year then ended, the changes in their net assets for each of the years in the two-year period then ended and their financial highlights for each of the periods noted in the table below, in conformity with accounting principles generally accepted in the United States of America.

 

Fund Financial Highlights Presented
ALPS | O’Shares U.S. Quality Dividend ETF For each of the years in the five-year period ended June 30, 2022
ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF For each of the years in the five-year period ended June 30, 2022
ALPS | O’Shares Global Internet Giants ETF For each of the years in the four-year period ended June 30, 2022 and for the period from June 5, 2018 (commencement of operations) to June 30, 2018
ALPS | O’Shares Europe Quality Dividend ETF For each of the years in the five-year period ended June 30, 2022

 

Basis for Opinion

These financial statements are the responsibility of the Funds' management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities law and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risk of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of June 30, 2022 by correspondence with the custodian. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

 

BBD, LLP

 

We have served as the auditor of one or more of the Funds in the ALPS ETF Trust and the former OSI ETF Trust since 2017.

 

Philadelphia, Pennsylvania

August 24, 2022

 

15 | June 30, 2022

 

 

ALPS | O’Shares U.S. Quality Dividend ETF  
Schedule of Investments June 30, 2022

 

Security Description   Shares     Value  
COMMON STOCKS (99.86%)            
Aerospace & Defense (5.50%)            
General Dynamics Corp.     11,185     $ 2,474,681  
L3Harris Technologies, Inc.     11,648       2,815,322  
Lockheed Martin Corp.     59,025       25,378,389  
Northrop Grumman Corp.     20,706       9,909,270  
Total Aerospace & Defense             40,577,662  
                 
Air Freight & Logistics (1.60%)                
Expeditors International of Washington, Inc.     21,426       2,088,178  
United Parcel Service, Inc.,                
Class B     52,719       9,623,326  
Total Air Freight & Logistics             11,711,504  
                 
Banks (0.25%)                
JPMorgan Chase & Co.     16,449       1,852,322  
                 
Beverages (3.76%)                
Coca-Cola Co.     231,977       14,593,673  
PepsiCo, Inc.     78,583       13,096,643  
Total Beverages             27,690,316  
                 
Biotechnology (4.12%)                
AbbVie, Inc.     51,904       7,949,617  
Amgen, Inc.     62,021       15,089,709  
Gilead Sciences, Inc.     119,036       7,357,615  
Total Biotechnology             30,396,941  
                 
Building Products (0.23%)                
Trane Technologies PLC     12,891       1,674,154  
                 
Capital Markets (3.84%)                
BlackRock, Inc.     1,952       1,188,846  
Blackstone, Inc.     107,101       9,770,824  
Moody's Corp.     8,057       2,191,262  
MSCI, Inc.     2,299       947,533  
S&P Global, Inc.     24,454       8,242,466  
T Rowe Price Group, Inc.     52,826       6,001,562  
Total Capital Markets             28,342,493  
                 
Commercial Services & Supplies (0.90%)                
Cintas Corp.     9,221       3,444,320  
Waste Management, Inc.     20,841       3,188,256  
Total Commercial Services & Supplies             6,632,576  
                 
Communications Equipment (2.05%)                
Cisco Systems, Inc.     329,299       14,041,309  
Motorola Solutions, Inc.     5,275       1,105,640  
Total Communications Equipment             15,146,949  
                 
Diversified Telecommunication Services (4.60%)                
Verizon Communications, Inc.     667,021       33,851,316  
                 
Electrical Equipment (0.40%)                
Emerson Electric Co.     21,675       1,724,030  

 

Security Description   Shares     Value  
Electrical Equipment (continued)                
Rockwell Automation, Inc.     6,309     $ 1,257,447  
Total Electrical Equipment             2,981,477  
                 
Electronic Equipment, Instruments & Components (0.22%)                
Amphenol Corp., Class A     13,755       885,547  
TE Connectivity, Ltd.     6,359       719,521  
Total Electronic Equipment, Instruments & Components             1,605,068  
                 
Entertainment (0.43%)                
Activision Blizzard, Inc.     41,099       3,199,968  
                 
Food & Staples Retailing (1.70%)                
Costco Wholesale Corp.     16,839       8,070,596  
Walmart, Inc.     37,012       4,499,919  
Total Food & Staples Retailing             12,570,515  
                 
Food Products (1.76%)                
Archer-Daniels-Midland Co.     13,683       1,061,801  
General Mills, Inc.     29,915       2,257,087  
Hershey Co.     14,054       3,023,859  
Hormel Foods Corp.     38,496       1,823,171  
Mondelez International, Inc.,                
Class A     77,663       4,822,095  
Total Food Products             12,988,013  
                 
Health Care Equipment & Supplies (2.90%)                
Abbott Laboratories     133,086       14,459,793  
Baxter International, Inc.     15,159       973,663  
Becton Dickinson and Co.     4,661       1,149,076  
Medtronic PLC     42,925       3,852,518  
Stryker Corp.     4,691       933,181  
Total Health Care Equipment & Supplies             21,368,231  
                 
Health Care Providers & Services (3.10%)                
Quest Diagnostics, Inc.     15,231       2,025,418  
UnitedHealth Group, Inc.     40,537       20,821,020  
Total Health Care Providers & Services             22,846,438  
                 
Hotels, Restaurants & Leisure (4.53%)                
McDonald's Corp.     94,451       23,318,063  
Starbucks Corp.     94,731       7,236,501  
Yum! Brands, Inc.     25,487       2,893,029  
Total Hotels, Restaurants & Leisure             33,447,593  
                 
Household Durables (0.26%)                
Garmin, Ltd.     19,394       1,905,461  
                 
Household Products (7.04%)                
Church & Dwight Co., Inc.     16,730       1,550,202  
Clorox Co.     11,833       1,668,216  
Colgate-Palmolive Co.     95,273       7,635,178  
Kimberly-Clark Corp.     28,246       3,817,447  
                 

 

16 | June 30, 2022

 

 

ALPS | O’Shares U.S. Quality Dividend ETF  
Schedule of Investments June 30, 2022

 

Security Description   Shares     Value  
Household Products (continued)            
Procter & Gamble Co.     258,897     $ 37,226,799  
Total Household Products             51,897,842  
                 
Industrial Conglomerates (2.89%)                
3M Co.     96,880       12,537,241  
Honeywell International, Inc.     50,450       8,768,714  
Total Industrial Conglomerates             21,305,955  
                 
Insurance (1.93%)                
Allstate Corp.     40,016       5,071,227  
Aon PLC, Class A     6,952       1,874,815  
Chubb, Ltd.     14,534       2,857,094  
Marsh & McLennan Cos., Inc.     28,338       4,399,475  
Total Insurance             14,202,611  
                 
Internet & Direct Marketing Retail (0.13%)                
eBay, Inc.     23,728       988,746  
                 
IT Services (4.06%)                
Accenture PLC, Class A     36,190       10,048,154  
Automatic Data Processing, Inc.     9,057       1,902,332  
Broadridge Financial Solutions, Inc.     3,344       476,687  
Cognizant Technology                
Solutions Corp., Class A     16,966       1,145,035  
International Business                
Machines Corp.     8,560       1,208,586  
Mastercard, Inc., Class A     10,514       3,316,957  
Paychex, Inc.     16,068       1,829,663  
Visa, Inc., Class A     50,843       10,010,478  
Total IT Services             29,937,892  
                 
Life Sciences Tools & Services (0.34%)                
Agilent Technologies, Inc.     6,837       812,030  
Thermo Fisher Scientific, Inc.     3,152       1,712,419  
Total Life Sciences Tools & Services             2,524,449  
                 
Machinery (1.69%)                
Cummins, Inc.     9,925       1,920,785  
Illinois Tool Works, Inc.     57,768       10,528,218  
Total Machinery             12,449,003  
                 
Media (2.14%)                
Comcast Corp., Class A     402,918       15,810,502  
                 
Multiline Retail (0.89%)                
Dollar General Corp.     13,763       3,377,991  
Target Corp.     22,565       3,186,855  
Total Multiline Retail             6,564,846  
                 
Personal Products (0.29%)                
Estee Lauder Cos., Inc., Class A     8,392       2,137,191  
                 
Pharmaceuticals (14.98%)                
Eli Lilly & Co.     61,558       19,958,950  

 

Security Description   Shares     Value  
Pharmaceuticals (continued)            
Johnson & Johnson     240,181     $ 42,634,528  
Merck & Co., Inc.     168,992       15,407,001  
Pfizer, Inc.     578,290       30,319,745  
Zoetis, Inc.     12,213       2,099,293  
Total Pharmaceuticals             110,419,517  
                 
Road & Rail (1.84%)                
CSX Corp.     63,665       1,850,105  
Norfolk Southern Corp.     10,165       2,310,403  
Union Pacific Corp.     44,345       9,457,902  
Total Road & Rail             13,618,410  
                 
Semiconductors & Semiconductor Equipment (2.85%)                
Analog Devices, Inc.     8,764       1,280,333  
Broadcom, Inc.     1,915       930,326  
Intel Corp.     92,364       3,455,337  
QUALCOMM, Inc.     5,642       720,709  
Texas Instruments, Inc.     95,094       14,611,193  
Total Semiconductors & Semiconductor Equipment             20,997,898  
                 
Software (5.45%)                
Intuit, Inc.     1,844       710,751  
Microsoft Corp.     123,135       31,624,763  
Oracle Corp.     112,751       7,877,913  
Total Software             40,213,427  
                 
Specialty Retail (4.78%)                
Home Depot, Inc.     99,678       27,338,685  
Lowe's Cos., Inc.     30,131       5,262,982  
TJX Cos., Inc.     45,686       2,551,563  
Total Specialty Retail             35,153,230  
                 
Technology Hardware, Storage & Peripherals (3.34%)                
Apple, Inc.     179,753       24,575,830  
                 
Textiles, Apparel & Luxury Goods (0.57%)                
NIKE, Inc., Class B     40,981       4,188,258  
                 
Tobacco (2.02%)                
Altria Group, Inc.     105,123       4,390,988  
Philip Morris International, Inc.     105,865       10,453,110  
Total Tobacco             14,844,098  
                 
Trading Companies & Distributors (0.48%)                
Fastenal Co.     71,279       3,558,248  
                 
TOTAL COMMON STOCKS                
(Cost $691,530,629)             736,176,950  

 

17 | June 30, 2022

 

 

ALPS | O’Shares U.S. Quality Dividend ETF  
Schedule of Investments June 30, 2022

 

    7 Day Yield     Shares     Value  
SHORT TERM INVESTMENTS (0.18%)          
Money Market Fund                  
State Street Institutional Treasury Plus Money Market Fund     1.45 %     1,342,751     $ 1,342,751  
                         
TOTAL SHORT TERM INVESTMENTS                        
(Cost $1,342,751)                     1,342,751  
                         
TOTAL INVESTMENTS (100.04%)                        
(Cost $692,873,380)                   $ 737,519,701  
LIABILITIES IN EXCESS OF OTHER ASSETS (-0.04%)                     (290,819 )
NET ASSETS - 100.00%                   $ 737,228,882  

 

 

See Notes to Financial Statements.

 

18 | June 30, 2022

 

 

ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF  
Schedule of Investments June 30, 2022

 

Security Description   Shares     Value  
COMMON STOCKS (99.81%)            
Auto Components (3.71%)            
BorgWarner, Inc.     43,043     $ 1,436,345  
Gentex Corp.     113,016       3,161,059  
Lear Corp.     3,500       440,615  
Standard Motor Products, Inc.     16,488       741,795  
Total Auto Components             5,779,814  
                 
Building Products (2.12%)                
A O Smith Corp.     49,898       2,728,423  
Simpson Manufacturing Co., Inc.     5,380       541,282  
Total Building Products             3,269,705  
                 
Capital Markets (13.11%)                
Artisan Partners Asset                
Management, Inc., Class A     32,949       1,171,996  
Carlyle Group, Inc.     71,805       2,273,346  
Cboe Global Markets, Inc.     28,374       3,211,653  
Cohen & Steers, Inc.     11,299       718,503  
Evercore, Inc., Class A     11,410       1,068,090  
Hamilton Lane, Inc., Class A     10,118       679,727  
Houlihan Lokey, Inc.     39,263       3,099,029  
Lazard, Ltd., Class A     49,800       1,614,018  
LPL Financial Holdings, Inc.     3,750       691,800  
Moelis & Co., Class A     38,474       1,513,952  
Morningstar, Inc.     4,742       1,146,758  
SEI Investments Co.     58,647       3,168,111  
Total Capital Markets             20,356,983  
                 
Commercial Services & Supplies (1.45%)                
Brady Corp., Class A     24,916       1,177,031  
Ennis, Inc.     22,065       446,375  
Healthcare Services Group, Inc.     14,925       259,844  
UniFirst Corp.     2,069       356,240  
Total Commercial Services & Supplies             2,239,490  
                 
Communications Equipment (2.31%)                
Juniper Networks, Inc.     126,115       3,594,278  
                 
Construction & Engineering (0.56%)                
MDU Resources Group, Inc.     32,262       870,751  
                 
Consumer Finance (0.22%)                
OneMain Holdings, Inc.     9,003       336,532  
                 
Diversified Consumer Services (4.81%)                
Graham Holdings Co., Class B     1,441       816,816  
H&R Block, Inc.     77,471       2,736,276  
Service Corp. International     56,570       3,910,117  
Total Diversified Consumer Services             7,463,209  
                 
Electric Utilities (2.99%)                
ALLETE, Inc.     5,396       317,177  
Hawaiian Electric Industries, Inc.     8,948       365,973  
IDACORP, Inc.     6,990       740,381  

 

Security Description   Shares     Value  
Electric Utilities (continued)            
MGE Energy, Inc.     5,274     $ 410,475  
NRG Energy, Inc.     10,031       382,883  
OGE Energy Corp.     21,677       835,865  
Otter Tail Corp.     6,116       410,567  
Pinnacle West Capital Corp.     12,564       918,680  
PNM Resources, Inc.     5,683       271,534  
Total Electric Utilities             4,653,535  
                 
Electronic Equipment, Instruments & Components (2.37%)                
Avnet, Inc.     26,945       1,155,402  
Littelfuse, Inc.     3,722       945,537  
National Instruments Corp.     30,955       966,725  
Vishay Intertechnology, Inc.     34,789       619,940  
Total Electronic Equipment, Instruments & Components             3,687,604  
                 
Food & Staples Retailing (0.79%)                
Casey's General Stores, Inc.     3,937       728,266  
Weis Markets, Inc.     6,599       491,889  
Total Food & Staples Retailing             1,220,155  
                 
Food Products (7.55%)                
Bunge, Ltd.     41,021       3,720,194  
Flowers Foods, Inc.     93,245       2,454,208  
Ingredion, Inc.     21,478       1,893,500  
J & J Snack Foods Corp.     2,590       361,719  
Lamb Weston Holdings, Inc.     16,886       1,206,674  
Lancaster Colony Corp.     11,979       1,542,656  
Tootsie Roll Industries, Inc.     15,860       560,651  
Total Food Products             11,739,602  
                 
Gas Utilities (2.79%)                
National Fuel Gas Co.     9,987       659,641  
New Jersey Resources Corp.     7,860       350,006  
ONE Gas, Inc.     5,389       437,533  
Southwest Gas Holdings, Inc.     4,830       420,596  
Spire, Inc.     6,009       446,889  
UGI Corp.     52,235       2,016,794  
Total Gas Utilities             4,331,459  
                 
Health Care Providers & Services (6.35%)                
Chemed Corp.     3,402       1,596,865  
Encompass Health Corp.     44,158       2,475,056  
National HealthCare Corp.     36,295       2,537,020  
Premier, Inc., Class A     90,892       3,243,027  
Total Health Care Providers & Services             9,851,968  
                 
Household Durables (1.90%)                
Leggett & Platt, Inc.     33,039       1,142,489  
MDC Holdings, Inc.     10,806       349,142  
Whirlpool Corp.     9,473       1,467,084  
Total Household Durables             2,958,715  

 

19 | June 30, 2022

 

 

ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF  
Schedule of Investments June 30, 2022

 

Security Description   Shares     Value  
Household Products (0.98%)            
Reynolds Consumer Products, Inc.     29,685     $ 809,510  
WD-40 Co.     3,571       719,057  
Total Household Products             1,528,567  
                 
Insurance (8.21%)                
Erie Indemnity Co., Class A     20,205       3,883,199  
Mercury General Corp.     27,799       1,231,496  
Old Republic International Corp.     139,140       3,111,170  
RLI Corp.     15,095       1,759,926  
Safety Insurance Group, Inc.     20,318       1,972,878  
Stewart Information Services Corp.     16,021       797,045  
Total Insurance             12,755,714  
                 
IT Services (9.96%)                
Amdocs, Ltd.     45,384       3,780,942  
CSG Systems International, Inc.     17,207       1,026,914  
Genpact, Ltd.     37,463       1,586,933  
Jack Henry & Associates, Inc.     20,607       3,709,672  
Maximus, Inc.     41,899       2,619,106  
Western Union Co.     165,631       2,727,943  
Total IT Services             15,451,510  
                 
Leisure Products (1.15%)                
Acushnet Holdings Corp.     12,167       507,121  
Polaris, Inc.     5,492       545,245  
Sturm Ruger & Co., Inc.     11,571       736,494  
Total Leisure Products             1,788,860  
                 
Life Sciences Tools & Services (0.52%)                
Bio-Techne Corp.     2,340       811,138  
                 
Machinery (9.49%)                
Donaldson Co., Inc.     40,427       1,946,156  
Franklin Electric Co., Inc.     8,566       627,545  
Graco, Inc.     45,680       2,713,848  
ITT, Inc.     6,964       468,259  
Lincoln Electric Holdings, Inc.     22,890       2,823,710  
Oshkosh Corp.     6,261       514,279  
Snap-on, Inc.     16,012       3,154,845  
Toro Co.     32,992       2,500,464  
Total Machinery             14,749,106  
                 
Media (3.55%)                
Cable One, Inc.     544       701,390  
Interpublic Group of Cos., Inc.     95,821       2,637,952  
John Wiley & Sons, Inc., Class A     19,496       931,129  
New York Times Co., Class A     11,081       309,160  
News Corp., Class A     59,462       926,418  
Total Media             5,506,049  
                 
Multi-Utilities (0.40%)                
Black Hills Corp.     4,448       323,681  

 

Security Description   Shares     Value  
Multi-Utilities (continued)            
NorthWestern Corp.     5,045     $ 297,302  
Total Multi-Utilities             620,983  
                 
Professional Services (2.21%)                
Exponent, Inc.     10,608       970,314  
Robert Half International, Inc.     33,036       2,474,066  
Total Professional Services             3,444,380  
                 
Road & Rail (1.52%)                
Landstar System, Inc.     6,869       998,890  
Schneider National, Inc., Class B     38,279       856,684  
Werner Enterprises, Inc.     13,124       505,799  
Total Road & Rail             2,361,373  
                 
Semiconductors & Semiconductor                
Equipment (1.22%)                
Monolithic Power Systems, Inc.     3,857       1,481,242  
Power Integrations, Inc.     5,590       419,306  
Total Semiconductors & Semiconductor Equipment             1,900,548  
                 
Software (3.37%)                
CDK Global, Inc.     35,799       1,960,711  
Dolby Laboratories, Inc., Class A     37,270       2,667,040  
Progress Software Corp.     13,401       607,065  
Total Software             5,234,816  
                 
Specialty Retail (0.52%)                
Murphy USA, Inc.     3,462       806,196  
                 
Textiles, Apparel & Luxury Goods (0.61%)                
Carter's, Inc.     7,094       499,985  
Columbia Sportswear Co.     6,250       447,375  
Total Textiles, Apparel & Luxury Goods             947,360  
                 
Thrifts & Mortgage Finance (0.27%)                
MGIC Investment Corp.     33,542       422,629  
                 
Tobacco (0.24%)                
Vector Group, Ltd.     34,815       365,558  
                 
Trading Companies & Distributors (1.94%)                
Watsco, Inc.     12,585       3,005,550  
                 
Water Utilities (0.62%)                
American States Water Co.     4,449       362,638  
Essential Utilities, Inc.     12,942       593,391  
Total Water Utilities             956,029  
                 
TOTAL COMMON STOCKS                
(Cost $153,503,305)             155,010,166  

 

20 | June 30, 2022

 

 

ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF  
Schedule of Investments June 30, 2022

 

    7 Day Yield     Shares     Value  
SHORT TERM INVESTMENTS (0.19%)          
Money Market Fund                  
State Street Institutional Treasury Plus Money Market Fund     1.45 %     410,826     $ 301,297  
                         
TOTAL SHORT TERM INVESTMENTS                        
(Cost $301,297)                     301,297  
                         
TOTAL INVESTMENTS (100.00%)                        
(Cost $153,804,602)                   $ 155,311,463  
OTHER ASSETS IN EXCESS OF LIABILITIES (0.00%)(a)                     6,888  
NET ASSETS - 100.00%                   $ 155,318,351  

 

 

(a) Less than 0.005%.

 

See Notes to Financial Statements.

 

21 | June 30, 2022

 

 

ALPS | O’Shares Global Internet Giants ETF  
Schedule of Investments June 30, 2022

 

Security Description   Shares     Value  
COMMON STOCKS (99.78%)            
Entertainment (10.84%)            
Activision Blizzard, Inc.     8,695     $ 676,993  
Bilibili, Inc., ADR(a)     109,712       2,808,627  
CTS Eventim AG & Co. KGaA(a)     46,069       2,413,911  
Electronic Arts, Inc.     7,214       877,583  
Live Nation Entertainment, Inc.(a)     34,021       2,809,454  
NetEase, Inc.     57,468       1,055,352  
Netflix, Inc.(a)     6,236       1,090,489  
Nexon Co., Ltd.     42,100       861,983  
ROBLOX Corp., Class A(a)     84,958       2,791,720  
Roku, Inc.(a)     22,442       1,843,386  
Sea, Ltd., ADR(a)     48,732       3,258,222  
Spotify Technology SA(a)     9,093       853,196  
Take-Two Interactive Software, Inc.(a)     11,534       1,413,261  
Total Entertainment             22,754,177  
                 
Interactive Media & Services (17.93%)                
Adevinta ASA(a)     313,995       2,268,165  
Alphabet, Inc., Class A(a)     5,929       12,920,832  
Baidu, Inc., Sponsored ADR(a)     2,638       392,350  
IAC/InterActiveCorp(a)     20,380       1,548,269  
Kuaishou Technology(a)(b)(c)     226,000       2,517,255  
Match Group, Inc.(a)     14,338       999,215  
Meta Platforms, Inc., Class A(a)     24,762       3,992,873  
Pinterest, Inc., Class A(a)     74,304       1,349,361  
Snap, Inc., Class A(a)     199,695       2,621,995  
Tencent Holdings, Ltd.     114,117       5,154,083  
Twitter, Inc.(a)     34,545       1,291,638  
Z Holdings Corp.     193,477       565,259  
ZoomInfo Technologies, Inc.(a)     60,236       2,002,245  
Total Interactive Media & Services             37,623,540  
                 
Internet & Direct Marketing Retail (18.34%)                
Alibaba Group Holding, Ltd.,                
Sponsored ADR(a)     28,548       3,245,337  
Amazon.com, Inc.(a)     94,013       9,985,120  
Chewy, Inc., Class A(a)     39,539       1,372,794  
Delivery Hero SE(a)(b)(c)     72,689       2,724,771  
DoorDash, Inc., Class A(a)     22,405       1,437,729  
Etsy, Inc.(a)     14,285       1,045,805  
Global-e Online, Ltd.(a)     130,845       2,639,144  
JD.com, Inc.     83,896       2,702,874  
Just Eat Takeaway.com NV(a)(b)(c)     123,115       1,943,799  
Meituan, Class B(a)(b)(c)     220,266       5,451,350  
MercadoLibre, Inc., Sponsored ADR(a)     3,540       2,254,520  
Pinduoduo, Inc., ADR(a)     59,821       3,696,938  
Total Internet & Direct Marketing Retail             38,500,181  
                 
IT Services (9.30%)                
Cloudflare, Inc., Class A(a)     50,584       2,213,050  
DigitalOcean Holdings, Inc.(a)     43,059       1,780,920  
MongoDB, Inc.(a)     9,371       2,431,775  

 

Security Description   Shares     Value  
IT Services (continued)            
Okta, Inc.(a)     28,342     $ 2,562,117  
Shopify, Inc., Class A(a)     75,660       2,363,618  
Sinch AB(a)     498,527       1,622,567  
Snowflake, Inc., Class A(a)     29,229       4,064,585  
Twilio, Inc., Class A(a)     22,954       1,923,775  
VeriSign, Inc.(a)     3,304       552,858  
Total IT Services             19,515,265  
                 
Software (43.37%)                
Adobe, Inc.(a)     5,423       1,985,143  
AppLovin Corp., Class A(a)     43,969       1,514,292  
Asana, Inc., Class A(a)     110,208       1,937,457  
Atlassian Corp. PLC, Class A(a)     10,374       1,944,088  
Bill.com Holdings, Inc.(a)     22,983       2,526,751  
Confluent, Inc., Class A(a)     106,682       2,479,290  
Coupa Software, Inc.(a)     20,254       1,156,503  
Crowdstrike Holdings, Inc.,                
Class A(a)     19,146       3,227,249  
Datadog, Inc., Class A(a)     31,154       2,967,107  
Digital Turbine, Inc.(a)     129,677       2,265,457  
DocuSign, Inc.(a)     24,140       1,385,153  
Dynatrace, Inc.(a)     36,052       1,421,891  
Elastic NV(a)     23,746       1,606,892  
Fortinet, Inc.(a)     32,315       1,828,383  
Gitlab, Inc., Class A(a)     51,384       2,730,546  
HubSpot, Inc.(a)     5,626       1,691,457  
Intuit, Inc.     4,164       1,604,972  
ironSource, Ltd., Class A(a)     937,293       2,230,757  
Kingdee International Software                
Group Co., Ltd.(a)     1,000,215       2,345,409  
Microsoft Corp.     51,412       13,204,144  
Monday.com, Ltd.(a)     23,945       2,470,166  
Oracle Corp.     14,647       1,023,386  
Palantir Technologies, Inc.,                
Class A(a)     228,159       2,069,402  
Palo Alto Networks, Inc.(a)     3,530       1,743,608  
Paycom Software, Inc.(a)     5,125       1,435,615  
Paylocity Holding Corp.(a)     7,756       1,352,802  
Qualtrics International, Inc.,                
Class A(a)     111,682       1,397,142  
RingCentral, Inc., Class A(a)     25,232       1,318,624  
Salesforce, Inc.(a)     17,562       2,898,432  
SAP SE     8,146       742,090  
SentinelOne, Inc., Class A(a)     118,589       2,766,681  
ServiceNow, Inc.(a)     5,669       2,695,723  
Smartsheet, Inc., Class A(a)     63,195       1,986,219  
Splunk, Inc.(a)     12,333       1,090,977  
Trade Desk, Inc., Class A(a)     39,273       1,645,146  
UiPath, Inc., Class A(a)     117,913       2,144,837  
Unity Software, Inc.(a)     49,205       1,811,728  
VMware, Inc., Class A     5,267       600,333  
Workday, Inc., Class A(a)     8,810       1,229,700  
Xero, Ltd.(a)     28,762       1,527,885  
Zendesk, Inc.(a)     22,410       1,659,909  
Zoom Video Communications, Inc., Class A(a)     8,855       956,074  

 

22 | June 30, 2022

 

 

ALPS | O’Shares Global Internet Giants ETF  
Schedule of Investments June 30, 2022

 

Security Description         Shares     Value  
Software (continued)                  
Zscaler, Inc.(a)             16,001     $ 2,392,310  
Total Software                     91,011,730  
                         
TOTAL COMMON STOCKS                        
(Cost $335,573,796)                     209,404,893  
                         
      7 Day Yield       Shares       Value  
SHORT TERM INVESTMENTS (0.23%)                        
Money Market Fund                        
State Street Institutional Treasury Plus Money Market Fund     1.45 %     492,873       492,873  
                         
TOTAL SHORT TERM INVESTMENTS                        
(Cost $492,873)                     492,873  
                         
TOTAL INVESTMENTS (100.01%)                        
(Cost $336,066,669)                   $ 209,897,766  
LIABILITIES IN EXCESS OF OTHER ASSETS (-0.01%)                     (30,651 )
NET ASSETS - 100.00%                   $ 209,867,115  

 

(a) Non-income producing security.

(b) Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. At period end, the aggregate market value of those securities was $12,637,175, representing 6.02% of net assets.

(c) Securities were purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such securities cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. As of June 30, 2022, the market value of those securities was $12,637,175 representing 6.02% of net assets.

 

 

See Notes to Financial Statements.

 

23 | June 30, 2022

 

 

ALPS | O’Shares Europe Quality Dividend ETF  
Schedule of Investments June 30, 2022

 

Security Description   Shares     Value  
COMMON STOCKS (99.40%)            
Air Freight & Logistics (1.79%)            
Deutsche Post AG     19,446     $ 728,328  
                 
Auto Components (1.27%)                
Cie Generale des                
Etablissements Michelin                
SCA     18,972       516,430  
                 
Beverages (3.54%)                
Carlsberg A/s     4,424       563,476  
Diageo PLC     20,462       879,391  
Total Beverages             1,442,867  
                 
Building Products (2.37%)                
Assa Abloy AB, Class B     24,409       518,495  
Geberit AG     933       448,395  
Total Building Products             966,890  
                 
Capital Markets (2.41%)                
3i Group PLC     41,299       557,279  
Partners Group Holding AG     468       421,698  
Total Capital Markets             978,977  
                 
Diversified Financial Services (2.47%)                
Industrivarden AB, Class C     21,712       482,854  
Investor AB, Class B     31,459       517,195  
Total Diversified Financial Services             1,000,049  
                 
Diversified Telecommunication Services (1.71%)                
Swisscom AG     1,259       695,539  
                 
Electric Utilities (3.22%)                
Iberdrola SA     73,840       765,762  
Orsted AS(a)(b)     5,230       546,687  
Total Electric Utilities             1,312,449  
                 
Electrical Equipment (4.39%)                
ABB, Ltd.     23,813       635,080  
Legrand SA     6,856       506,239  
Schneider Electric SE     5,460       645,995  
Total Electrical Equipment             1,787,314  
                 
Electronic Equipment, Instruments &                
Components (1.17%)                
Hexagon AB, Class B     46,100       478,812  
                 
Food Products (7.48%)                
Danone SA     11,681       651,964  
Nestle SA     20,513       2,394,562  
Total Food Products             3,046,526  
                 
Health Care Equipment & Supplies (2.59%)                
Coloplast A/S, Class B     4,311       491,016  

 

Security Description   Shares     Value  
Health Care Equipment & Supplies            
(continued)            
Siemens Healthineers AG(a)(b)     11,049     $ 561,458  
Total Health Care Equipment & Supplies             1,052,474  
                 
Household Products (2.80%)                
Essity AB, Class B     23,723       619,410  
Henkel AG & Co. KGaA     8,502       520,327  
Total Household Products             1,139,737  
                 
Industrial Conglomerates (1.56%)                
Siemens AG     6,254       636,319  
                 
Insurance (1.01%)                
Admiral Group PLC     15,077       411,847  
                 
Machinery (4.10%)                
Atlas Copco AB     50,914       475,657  
Kone Oyj, Class B     15,423       733,136  
Schindler Holding AG     2,522       459,938  
Total Machinery             1,668,731  
                 
Marine (1.16%)                
Kuehne + Nagel International AG     2,003       474,182  
                 
Personal Products (6.16%)                
L'Oreal SA     3,304       1,140,182  
Unilever PLC     30,185       1,367,252  
Total Personal Products             2,507,434  
                 
Pharmaceuticals (24.68%)                
AstraZeneca PLC     10,525       1,383,705  
GSK PLC     49,306       1,059,717  
Merck KGaA     4,058       684,668  
Novartis AG     15,800       1,338,113  
Novo Nordisk A/S, Class B     20,057       2,224,552  
Roche Holding AG     6,914       2,307,081  
Sanofi     10,370       1,046,954  
Total Pharmaceuticals             10,044,790  
                 
Professional Services (5.70%)                
RELX PLC     28,474       771,563  
SGS SA     242       553,889  
Wolters Kluwer NV     10,288       997,922  
Total Professional Services             2,323,374  
                 
Semiconductors & Semiconductor                
Equipment (2.06%)                
ASML Holding NV     1,755       838,381  
                 
Software (2.67%)                
SAP SE     11,949       1,088,539  
                 
Specialty Retail (1.28%)                
Industria de Diseno Textil SA     23,069       521,944  

 

24 | June 30, 2022

 

 

ALPS | O’Shares Europe Quality Dividend ETF  
Schedule of Investments June 30, 2022

 

Security Description         Shares     Value  
Textiles, Apparel & Luxury Goods (8.18%)          
EssilorLuxottica SA         4,321   $ 647,081  
Hermes International             556       621,701  
Kering SA             1,057       542,878  
LVMH Moet Hennessy Louis                        
Vuitton SE             2,491       1,518,501  
Total Textiles, Apparel & Luxury Goods                   3,330,161  
                         
Tobacco (1.97%)                        
Swedish Match AB             78,846       803,124  
                         
Trading Companies & Distributors (1.66%)                        
Bunzl PLC             20,460       677,193  
                         
TOTAL COMMON STOCKS                        
(Cost $49,946,347)                     40,472,411  
                         
      7 Day Yield       Shares       Value  
SHORT TERM INVESTMENTS (0.10%)                
Money Market Fund                        
State Street Institutional Treasury Plus Money Market Fund     1.45 %     39,059       39,059  
                         
TOTAL SHORT TERM INVESTMENTS                        
(Cost $39,059)                     39,059  
                         
TOTAL INVESTMENTS (99.50%)                        
(Cost $49,985,406)                   $ 40,511,470  
OTHER ASSETS IN EXCESS OF LIABILITIES (0.50%)                     204,408  
NET ASSETS - 100.00%                   $ 40,715,878  

 

(a) Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. At period end, the aggregate market value of those securities was $1,108,145, representing 2.72% of net assets.

(b) Securities were purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such securities cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. As of June 30, 2022, the market value of those securities was $1,108,145 representing 2.72% of net assets.

 

 

See Notes to Financial Statements.

 

25 | June 30, 2022

 

 

ALPS ETF Trust  
Statements of Assets and Liabilities June 30, 2022

 

ALPS | O’Shares U.S. Quality Dividend ETF ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF   ALPS | O’Shares Global Internet Giants ETF     ALPS | O’Shares Europe Quality Dividend ETF
ASSETS:                        
Investments, at value   $ 737,519,701     $ 155,311,463     $ 209,897,766     $ 40,511,470  
Cash     395,682       109,529              
Dividends and foreign tax reclaims receivable     709,733       161,722       3,966       250,948  
Receivable for investments sold                       2,262,298  
Total Assets     738,625,116       155,582,714       209,901,732       43,024,716  
                                 
LIABILITIES:                                
Payable to adviser     122,255       25,528       34,617       7,021  
Payable for capital shares redeemed                       2,261,993  
Distribution payable     1,273,979       238,835             39,824  
Total Liabilities     1,396,234       264,363       34,617       2,308,838  
NET ASSETS   $ 737,228,882     $ 155,318,351     $ 209,867,115     $ 40,715,878  
                                 
NET ASSETS CONSIST OF:                                
Paid-in capital   $ 742,076,707     $ 167,075,939     $ 435,856,405     $ 55,211,878  
Total distributable earnings     (4,847,825 )     (11,757,588 )     (225,989,290 )     (14,496,000 )
NET ASSETS   $ 737,228,882     $ 155,318,351     $ 209,867,115     $ 40,715,878  
                                 
INVESTMENTS, AT COST   $ 692,873,380     $ 153,804,602     $ 336,066,669     $ 49,985,406  
                                 
PRICING OF SHARES                                
Net Assets   $ 737,228,882     $ 155,318,351     $ 209,867,115     $ 40,715,878  
Shares of beneficial interest outstanding (Unlimited number of shares authorized, par value $0.01 per share)     18,300,000       4,904,000       7,750,000       1,800,000  
Net Asset Value, offering and redemption price per share   $ 40.29     $ 31.67     $ 27.08     $ 22.62  

 

See Notes to Financial Statements.

 

26 | June 30, 2022

 

 

ALPS ETF Trust  
Statements of Operations For the Year Ended June 30, 2022

 

  ALPS | O’Shares U.S. Quality Dividend ETF   ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF     ALPS | O’Shares Global Internet Giants ETF ALPS | O’Shares Europe Quality Dividend ETF
INVESTMENT INCOME:                        
Dividends*   $ 17,213,528     $ 3,386,138     $ 521,381     $ 1,137,271  
Income from non-cash dividends                 223,794       45,145  
Total Investment Income     17,213,528       3,386,138       745,175       1,182,416  
                                 
EXPENSES:                                
Investment adviser fees     3,652,468       749,085       2,219,431       211,895  
Total Expenses     3,652,468       749,085       2,219,431       211,895  
NET INVESTMENT INCOME/(LOSS)     13,561,060       2,637,053       (1,474,256 )     970,521  
                                 
REALIZED AND UNREALIZED GAIN/LOSS                                
Net realized gain/(loss) on investments(a)     43,405,783       14,022,562       (38,672,396 )     3,229,389  
Net realized loss on foreign currency transactions                 (4,792 )     (32,845 )
Total net realized gain/(loss)     43,405,783       14,022,562       (38,677,188 )     3,196,544  
Net change in unrealized depreciation on investments     (83,029,339 )     (29,865,443 )     (244,942,759 )     (14,648,951 )
Net change in unrealized depreciation on translation of assets and liabilities denominated in foreign currencies                 (128 )     (11,589 )
Total net change in unrealized depreciation     (83,029,339 )     (29,865,443 )     (244,942,887 )     (14,660,540 )
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS     (39,623,556 )     (15,842,881 )     (283,620,075 )     (11,463,996 )
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS   $ (26,062,496 )   $ (13,205,828 )   $ (285,094,331 )   $ (10,493,475 )
*Net of foreign tax withholding.   $     $     $ (8,960 )   $ (159,771 )

 

(a) 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.

 

27 | June 30, 2022

 

 

ALPS | O’Shares U.S. Quality Dividend ETF
Statements of Changes in Net Assets

 

    For the Year Ended June 30, 2022     For the Year Ended June 30, 2021  
OPERATIONS:            
Net investment income   $ 13,561,060     $ 10,746,630  
Net realized gain     43,405,783       32,907,730  
Net change in unrealized appreciation/depreciation     (83,029,339 )     102,443,817  
Net increase/(decrease) in net assets resulting from operations     (26,062,496 )     146,098,177  
                 
DISTRIBUTIONS TO SHAREHOLDERS:                
From distributable earnings     (13,415,408 )     (10,300,014 )
Total distributions     (13,415,408 )     (10,300,014 )
                 
CAPITAL SHARE TRANSACTIONS:                
Proceeds from sale of shares     230,032,035       193,214,199  
Cost of shares redeemed     (142,045,551 )     (119,413,177 )
Net increase from capital share transactions     87,986,484       73,801,022  
Net increase in net assets     48,508,580       209,599,185  
                 
NET ASSETS:                
Beginning of year     688,720,302       479,121,117  
End of year   $ 737,228,882     $ 688,720,302  
                 
OTHER INFORMATION:                
CAPITAL SHARE TRANSACTIONS:                
Beginning shares     16,400,000       14,450,000  
Shares sold     5,200,000       5,150,000  
Shares redeemed     (3,300,000 )     (3,200,000 )
Shares outstanding, end of year     18,300,000       16,400,000  

 

See Notes to Financial Statements.

 

28 | June 30, 2022

 

 

ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF
Statements of Changes in Net Assets

 

    For the Year Ended June 30, 2022     For the Year Ended June 30, 2021  
OPERATIONS:            
Net investment income   $ 2,637,053     $ 2,556,369  
Net realized gain     14,022,562       4,938,284  
Net change in unrealized appreciation/depreciation     (29,865,443 )     34,458,826  
Net increase/(decrease) in net assets resulting from operations     (13,205,828 )     41,953,479  
                 
DISTRIBUTIONS TO SHAREHOLDERS:                
From distributable earnings     (2,765,428 )     (2,128,261 )
Total distributions     (2,765,428 )     (2,128,261 )
                 
CAPITAL SHARE TRANSACTIONS:                
Proceeds from sale of shares     78,553,967       18,805,699  
Cost of shares redeemed     (56,478,862 )     (3,228,094 )
Net increase from capital share transactions     22,075,105       15,577,605  
Net increase in net assets     6,103,849       55,402,823  
                 
NET ASSETS:                
Beginning of year     149,214,502       93,811,679  
End of year   $ 155,318,351     $ 149,214,502  
                 
OTHER INFORMATION:                
CAPITAL SHARE TRANSACTIONS:                
Beginning shares     4,254,000       3,754,000  
Shares sold     2,250,000       600,000  
Shares redeemed     (1,600,000 )     (100,000 )
Shares outstanding, end of year     4,904,000       4,254,000  

 

See Notes to Financial Statements.

 

29 | June 30, 2022

 

 

ALPS | O’Shares Global Internet Giants ETF
Statements of Changes in Net Assets

 

    For the Year Ended June 30, 2022     For the Year Ended June 30, 2021  
OPERATIONS:            
Net investment loss   $ (1,474,256 )   $ (2,450,867 )
Net realized gain/(loss)     (38,677,188 )     108,500,737  
Net change in unrealized appreciation/depreciation     (244,942,887 )     77,354,082  
Net increase/(decrease) in net assets resulting from operations     (285,094,331 )     183,403,952  
                 
DISTRIBUTIONS TO SHAREHOLDERS:                
From distributable earnings            
Total distributions            
                 
CAPITAL SHARE TRANSACTIONS:                
Proceeds from sale of shares     5,994,386       558,000,546  
Cost of shares redeemed     (229,798,933 )     (295,150,967 )
Net increase/(decrease) from capital share transactions     (223,804,547 )     262,849,579  
Net increase/(decrease) in net assets     (508,898,878 )     446,253,531  
                 
NET ASSETS:                
Beginning of year     718,765,993       272,512,462  
End of year   $ 209,867,115     $ 718,765,993  
                 
OTHER INFORMATION:                
CAPITAL SHARE TRANSACTIONS:                
Beginning shares     12,600,000       7,200,000  
Shares sold     150,000       11,100,000  
Shares redeemed     (5,000,000 )     (5,700,000 )
Shares outstanding, end of year     7,750,000       12,600,000  

 

See Notes to Financial Statements.

 

30 | June 30, 2022

 

 

ALPS | O’Shares Europe Quality Dividend ETF
Statements of Changes in Net Assets

 

    For the Year Ended June 30, 2022     For the Year Ended June 30, 2021  
OPERATIONS:            
Net investment income   $ 970,521     $ 458,122  
Net realized gain     3,196,544       747,430  
Net change in unrealized appreciation/depreciation     (14,660,540 )     4,207,028  
Net increase/(decrease) in net assets resulting from operations     (10,493,475 )     5,412,580  
                 
DISTRIBUTIONS TO SHAREHOLDERS:                
From distributable earnings     (1,031,977 )     (682,515 )
Total distributions     (1,031,977 )     (682,515 )
                 
CAPITAL SHARE TRANSACTIONS:                
Proceeds from sale of shares     43,521,283       4,045,935  
Cost of shares redeemed     (17,876,858 )      
Net increase from capital share transactions     25,644,425       4,045,935  
Net increase in net assets     14,118,973       8,776,000  
                 
NET ASSETS:                
Beginning of year     26,596,905       17,820,905  
End of year   $ 40,715,878     $ 26,596,905  
                 
OTHER INFORMATION:                
CAPITAL SHARE TRANSACTIONS:                
Beginning shares     950,000       800,000  
Shares sold     1,550,000       150,000  
Shares redeemed     (700,000 )      
Shares outstanding, end of year     1,800,000       950,000  

 

See Notes to Financial Statements.

 

31 | June 30, 2022

 

 

ALPS | O’Shares U.S. Quality Dividend ETF
Financial Highlights For a Share Outstanding Throughout the Periods Presented

 

 
 
 
 
For the Year Ended
June 30, 2022
 
 
 
 
For the Year Ended
June 30, 2021
 
 
 
 
For the Year Ended
June 30, 2020
 
 
 
 
For the Year Ended
June 30, 2019
 
 
 
 
For the Year Ended
June 30, 2018
 
 
NET ASSET VALUE, BEGINNING OF PERIOD   $ 42.00     $ 33.16     $ 34.13     $ 30.69     $ 29.25  
                                         
INCOME/(LOSS) FROM INVESTMENT OPERATIONS:                                        
Net investment income(a)     0.77       0.69 (b)     0.93       0.89 (b)     0.78  
Net realized and unrealized gain/(loss)     (1.72 )     8.81       (0.96 )     3.44       1.46  
Total from investment operations     (0.95 )     9.50       (0.03 )     4.33       2.24  
                                         
DISTRIBUTIONS:                                        
From net investment income     (0.76 )     (0.66 )     (0.94 )     (0.89 )     (0.80 )
Total distributions     (0.76 )     (0.66 )     (0.94 )     (0.89 )     (0.80 )
                                         
NET INCREASE/(DECREASE) IN NET ASSET VALUE     (1.71 )     8.84       (0.97 )     3.44       1.44  
NET ASSET VALUE, END OF PERIOD   $ 40.29     $ 42.00     $ 33.16     $ 34.13     $ 30.69  
TOTAL RETURN(c)     (2.38 )%     28.84 %     (0.12 )%     14.31 %     7.67 %
                                         
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (in 000s)   $ 737,229     $ 688,720     $ 479,121     $ 496,574     $ 411,269  
                                         
Ratio of expenses to average net assets     0.48 %     0.48 %     0.48 %     0.48 %     0.48 %(d)

Ratio of expenses including

waiver/reimbursement to average net assets

    0.48 %     0.48 %     0.48 %     0.48 %     0.48 %(d)

Ratio of net investment income excluding

waiver/reimbursement to average net assets

    1.78 %     1.81 %     2.71 %     2.76 %     2.53 %

Ratio of net investment income including

waiver/reimbursement to average net assets

    1.78 %     1.81 %(e)     2.71 %     2.76 %(e)     2.54 %
Portfolio turnover rate(f)     15 %     26 %     64 %(g)     15 %     18 %

 

(a) Based on average shares outstanding during the period.
(b) The net investment income per share excluding the impact of large, non-recurring dividends (special dividends) was $0.67 during the year ended June 30, 2021 and $0.88 during the year ended June 30, 2019.
(c) 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.
(d) Prior to June 28, 2018, the unitary management fee was 0.48% and the former investment advisor to the Fund agreed to contractually waive its fees and reimburse expenses so that the total annual fund operating expenses were limited to 0.48%.
(e) The ratio of net investment income, including waiver/reimbursement and excluding the impact of large, non-recurring dividends (special dividends) was 1.77% during the year ended June 30, 2021 and 2.71% during the year ended June 30, 2019.
(f) 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.
(g) Increase in the portfolio turnover was a result of the Index change that was effective on June 1, 2020.

 

See Notes to Financial Statements.

 

32 | June 30, 2022

 

 

ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF
Financial Highlights For a Share Outstanding Throughout the Periods Presented

 

    For the Year Ended June 30, 2022     For the Year Ended June 30, 2021     For the Year Ended June 30, 2020     For the Year Ended June 30, 2019     For the Year Ended June 30, 2018  
NET ASSET VALUE, BEGINNING OF PERIOD   $ 35.08     $ 24.99     $ 27.45     $ 27.07     $ 25.41  
                                         
INCOME/(LOSS) FROM INVESTMENT OPERATIONS:                                        
Net investment income(a)     0.59       0.64 (b)      0.64 (b)      0.58 (b)      0.66  
Net realized and unrealized gain/(loss)     (3.38 )     9.98       (2.48 )     0.38 (c)      1.70  
Total from investment operations     (2.79 )     10.62       (1.84 )     0.96       2.36  
                                         
DISTRIBUTIONS:                                        
From net investment income     (0.62 )     (0.53 )     (0.57 )     (0.58 )     (0.66 )
From net realized gains/loss                             (d) 
From tax return of capital                 (0.05 )           (0.04 )
Total distributions     (0.62 )     (0.53 )     (0.62 )     (0.58 )     (0.70 )
                                         
NET INCREASE/(DECREASE) IN NET ASSET VALUE     (3.41 )     10.09       (2.46 )     0.38       1.66  
NET ASSET VALUE, END OF PERIOD   $ 31.67     $ 35.08     $ 24.99     $ 27.45     $ 27.07  
TOTAL RETURN(e)     (8.12 )%     42.79 %     (6.82 )%     3.65 %     9.39 %
                                         
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (in 000s)   $ 155,318     $ 149,215     $ 93,812     $ 97,570     $ 136,802  
                                         
Ratio of expenses to average net assets     0.48 %     0.48 %     0.48 %     0.48 %     0.48 %
Ratio of net investment income to average net assets     1.69 %     2.08 %(f)      2.38 %(f)      2.16 %(f)      2.51 %
Portfolio turnover rate(g)     34 %     60 %     101 %(h)      52 %     64 %

 

(a) Based on average shares outstanding during the period.
(b) The net investment income per share excluding the impact of large, non-recurring dividends (special dividends) was $0.57 during the year ended June 30, 2021, $0.62 during the year ended June 30, 2020 and $0.54 during the year ended June 30, 2019. (c) The amount shown for a share outstanding throughout the period is not in accordance with the aggregate net realized and unrealized gain (loss) for that period because of the timing of sales and repurchases of the Fund shares in relation to fluctuating market value of the investments in the Fund.
(d) Per share amount is less than $0.01.
(e) 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.
(f) The ratio of net investment income, including waiver/reimbursement and excluding the impact of large, non-recurring dividends (special dividends) was 1.84% during the year ended June 30, 2021, 2.30% during the year ended June 30, 2020 and 2.03% during the year ended June 30, 2019.
(g) 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.
(h) Increase in the portfolio turnover was a result of the Index change that was effective on June 1, 2020.

 

See Notes to Financial Statements.

 

33 | June 30, 2022

 

 

ALPS | O’Shares Global Internet Giants ETF
Financial Highlights For a Share Outstanding Throughout the Periods Presented

 

    For the Year Ended June 30, 2022     For the Year Ended June 30, 2021     For the Year Ended June 30, 2020     For the Year Ended June 30, 2019     For the Period June 5, 2018 (Commencement of operations) to June 30, 2018  
NET ASSET VALUE, BEGINNING OF PERIOD   $ 57.04     $ 37.85     $ 25.04     $ 24.06     $ 25.00  
                                         
INCOME/(LOSS) FROM INVESTMENT OPERATIONS:                                        
Net investment loss(a)     (0.15 )     (0.21 )     (0.10 )     (0.06 )(b)      (0.01 )
Net realized and unrealized gain/(loss)     (29.81 )     19.40       12.91       1.04       (0.93 )
Total from investment operations     (29.96 )     19.19       12.81       0.98       (0.94 )
                                         
NET INCREASE/(DECREASE) IN NET ASSET VALUE     (29.96 )     19.19       12.81       0.98       (0.94 )
NET ASSET VALUE, END OF PERIOD   $ 27.08     $ 57.04     $ 37.85     $ 25.04     $ 24.06  
TOTAL RETURN(c)     (52.52 )%     50.70 %     51.16 %     4.07 %     (3.76 )%
                                         
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (in 000s)   $ 209,867     $ 718,766     $ 272,512     $ 48,834     $ 51,735  
                                         
Ratio of expenses to average net assets     0.48 %     0.48 %     0.48 %     0.48 %     0.48 %(d) 
Ratio of net investment loss to average net assets     (0.32 )%     (0.40 )%     (0.34 )%     (0.28 )%(e)      (0.48 )%(d) 
Portfolio turnover rate(f)     51 %     48 %     38 %     55 %     8 %

 

(a) Based on average shares outstanding during the period.
(b) The net investment loss per share excluding the impact of large, non-recurring dividends (special dividends) was $(0.07) during the year ended June 30, 2019.
(c) 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.
(d) Annualized.
(e) The ratio of net investment loss, including waiver/reimbursement and excluding the impact of large, non-recurring dividends (special dividends) was (0.31)% during the year ended June 30, 2019.
(f) 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.

 

34 | June 30, 2022

 

 

ALPS | O’Shares Europe Quality Dividend ETF
Financial Highlights For a Share Outstanding Throughout the Periods Presented

 

    For the Year Ended June 30, 2022     For the Year Ended June 30, 2021     For the Year Ended June 30, 2020     For the Year Ended June 30, 2019     For the Year Ended June 30, 2018  
NET ASSET VALUE, BEGINNING OF PERIOD   $ 28.00     $ 22.28     $ 24.28     $ 23.94     $ 24.69  
                                         
INCOME/(LOSS) FROM INVESTMENT OPERATIONS:                                        
Net investment income(a)     0.58       0.55 (b)      0.64 (b)      0.76 (b)      0.69  
Net realized and unrealized gain/(loss)     (5.33 )     5.97       (1.95 )     0.44       (0.55 )
Total from investment operations     (4.75 )     6.52       (1.31 )     1.20       0.14  
                                         
DISTRIBUTIONS:                                        
From net investment income     (0.63 )     (0.80 )     (0.69 )     (0.86 )     (0.89 )
Total distributions     (0.63 )     (0.80 )     (0.69 )     (0.86 )     (0.89 )
                                         
NET INCREASE/(DECREASE) IN NET ASSET VALUE     (5.38 )     5.72       (2.00 )     0.34       (0.75 )
NET ASSET VALUE, END OF PERIOD   $ 22.62     $ 28.00     $ 22.28     $ 24.28     $ 23.94  
TOTAL RETURN(c)     (17.29 )%     29.72 %     (5.44 )%     5.16 %     0.53 %
                                         
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (in 000s)   $ 40,716     $ 26,597     $ 17,821     $ 25,498     $ 40,698  
                                         
Ratio of expenses to average net assets     0.48 %     0.48 %     0.48 %     0.48 %     0.60 %(d)
Ratio of expenses including waiver/reimbursement to average net assets     0.48 %     0.48 %     0.48 %     0.48 %     0.58 %(d)
Ratio of net investment income to average net assets     2.20 %     2.18 %     2.72 %     3.23 %     2.75 %
Ratio of net investment income including waiver/reimbursement to average net assets     2.20 %     2.18 %(e)      2.72 %(e)      3.23 %(e)     2.77 %(e)
Portfolio turnover rate(f)     22 %     42 %     72 %(g)      35 %     30 %

 

(a) Based on average shares outstanding during the period.
(b) The net investment income per share excluding the impact of large, non-recurring dividends (special dividends) was $0.54 during the year ended June 30, 2021, $0.63 during the year ended June 30, 2020 and $0.74 during the year ended June 30, 2019. (c) 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.
(d) Prior to June 28, 2018, the unitary management fee was 0.58% and the former investment advisor to the Fund agreed to contractually waive its fees and reimburse expenses so that the total annual fund operating expenses were limited to 0.58%.
(e) The ratio of net investment income, including waiver/reimbursement and excluding the impact of large, non-recurring dividends (special dividends) was 2.15% during the year ended June 30, 2021, 2.70% during the year ended June 30, 2020, 3.15% during the year ended June 30, 2019 and 2.76% during the year ended June 30, 2018.
(f) 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.
(g) Increase in the portfolio turnover was a result of the Index change that was effective on June 1, 2020.

 

See Notes to Financial Statements.

 

35 | June 30, 2022

 

 

ALPS ETF Trust  
Notes to Financial Statements June 30, 2022

 

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 June 30, 2022, the Trust consisted of twenty-three separate portfolios. Each portfolio represents a separate series of the Trust. This report pertains to the ALPS | O’Shares U.S. Quality Dividend ETF, the ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF, the ALPS | O’Shares Global Internet Giants ETF and the ALPS | O’Shares Europe Quality Dividend ETF (each a “Fund” and collectively, the “Funds”). ALPS | O’Shares Global Internet Giants ETF is considered non-diversified and may invest a greater portion of assets in securities of individual issuers than a diversified fund. As a result, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in a diversified fund. ALPS | O’Shares U.S. Quality Dividend ETF, ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF and ALPS | O’Shares Europe Quality Dividend ETF have each elected to qualify as a diversified series of the Trust under the 1940 Act The Funds, previously part of another investment company, OSI ETF Trust, reorganized effective after the close of business on June 17, 2022. See Note 7 for further discussion on the reorganizations.

 

The investment objective of the ALPS | O’Shares U.S. Quality Dividend ETF is to seek investment results that track the performance (before fees and expenses) of the O’Shares U.S. Quality Dividend Index. The investment objective of the ALPS | O’Shares U.S. Small-Cap Quality Dividend ETF is to seek investment results that track the performance (before fees and expenses) of the O’Shares U.S. Small-Cap Quality Dividend Index. The investment objective of the ALPS | O’Shares Global Internet Giants ETF is to seek investment results that track the performance (before fees and expenses) of the O’Shares Global Internet Giants Index. The investment objective of the ALPS | O’Shares Europe Quality Dividend ETF is to seek investment results that track the performance (before fees and expenses) of the O’Shares Europe Quality Dividend Index.

 

Each Fund’s shares are listed on the Cboe BZX Exchange, Inc. (the “Cboe BZX”). Each 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.

 

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 Funds 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. Each 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

Each 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 each 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 last quoted sale price in such market.

 

The Funds’ 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 Funds 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 a 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.

 

36 | June 30, 2022

 

 

ALPS ETF Trust  
Notes to Financial Statements June 30, 2022

 

B. Fair Value Measurements

Each 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 Funds’ investments by major category are as follows:

 

Equity securities, 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 each 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