Table of Contents

 

Performance Overview 1
Disclosure of Fund Expenses 13
Report of Independent Registered Public Accounting Firm 14
Financial Statements  
Schedule of Investments 15
Statements of Assets and Liabilities 21
Statements of Operations 22
Statements of Changes in Net Assets 23
Financial Highlights 27
Notes to Financial Statements 31
Additional Information 40
Board Considerations Regarding Approval of Investment Advisory Agreement 42
Trustees and Officers 44

 

alpsfunds.com

 

 

ALPS Sector Dividend Dogs ETF

 

Performance Overview November 30, 2023 (Unaudited)

 

Investment Objective

The ALPS Sector Dividend Dogs ETF (the “Fund” or “SDOG”) seeks investment results that replicate as closely as possible, before fees and expenses, the performance of the S-Network® Sector Dividend Dogs Index (the “Underlying Index”).

 

The Underlying Index is a rules based index intended to give investors a means of tracking the overall performance of the highest dividend paying stocks (i.e. “Dividend Dogs”) in the S-Network US Equity WR Large-Cap 500 Index (the “S-Net 500”) on a sector-by-sector basis. “Dividend Dogs” refers to the five stocks in each of the Global Industry Classification Standard (“GICS”) sectors, excluding the Real Estate sector, that make up the S-Net 500 which offer the highest dividend yields.

 

Performance Overview

The Fund, for the twelve-month period ended November 30, 2023, generated a total return of -5.07%, largely in-line with the Fund’s Underlying Index, net of fees, which returned -4.91%. The fund underperformed the S&P 500® Index, which returned 13.84% for the same period.

 

The trailing twelve-month (TTM) yield for the Fund’s underlying constituents as of November 30, 2023 was 4.37% vs. 1.43% for the S&P 500® Index.

 

The S&P 500® Index returned 13.84% for the TTM period that ended November 30, 2023, as the fiscal year 2023 saw markets rebound from 2022 lows. The Federal Reserve Bank continued its path of quantitative tightening in 2023 to combat inflation, reaching their target of peak rates with expectations of rate cuts into 2024 as Consumer Price Index (CPI), energy prices and yields trended towards more acceptable levels. US markets rallied substantially off the secondary effects of the Fed’s actions leading to better odds of a soft landing, with expectations of rate cuts driving growth and equity multiples higher into the next year. Main macroeconomic talking points throughout 2023 centered on the path of future interest rates driven by monetary policy, and inflation trending towards the Fed’s 2% inflation target. Inflation significantly declined throughout 2023, with November 2023 numbers showing year-over-year CPI around 3.1%. Despite persistent recession calls, a gradual reduction in interest rates is likely to lead to an earnings recovery in the US, easing financial conditions for both US and global equities. With the recent recovery in sentiment and price for US markets, the S&P 500® Index Price-to-Earnings (P/E) ratio of 22.2x is slightly above its 10-year average of 20.6x. Looking forward, ALPS Advisors believes markets are likely be data-dependent on job growth, CPI, spending and manufacturing data to justify the recent recovery in valuations.

 

Compared to the S&P 500® Index, the Fund saw a negative impact from security selection (-13.20%) and asset allocation (-5.59%), leading to a 18.87% underperformance relative to the S&P 500® Index. The asset allocation underperformance was largely driven by relative under-weightings to Information Technology, while the security selection underperformance was mainly attributed to SDOG’s selection of high-yielding value securities across all sectors (excluding Real Estate) that lagged core and growth year-to-date. The Fund’s Information Technology, Industrials, and Energy sectors led in terms of contribution to overall return over the TTM period.

 

The best performing stocks in the Fund for the period were Seagate Technology Holdings (STX), which increased 56.48%, Intel Corp. (INTC), which saw a gain of 52.18%, and Phillips 66 (PSX), rising 33.28%. The largest detractors for the Fund for the period were Organon & Co. (OGN), which decreased 56.13%, Walgreens Boots Alliance Inc. (WBA), which fell 48.49%, and VF Corp. (VFC), which lost 45.75%.

 

Looking ahead, the Fund’s strategy of annually selecting the five highest-yielding securities in each of the ten sectors (excluding Real Estate) in the S&P 500® Index is intended to provide meaningfully higher yield relative to the S&P 500® Index, the potential for market participation in all economic cycles through equal sector weighting, and a deep value portfolio of securities as identified through high yield relative to sector peers.

 

1 | November 30, 2023

 

 

ALPS Sector Dividend Dogs ETF

 

Performance Overview November 30, 2023 (Unaudited)

 

Performance (as of November 30, 2023) 

 

1 Year

5 Year

10 Years

Since
Inception^
ALPS Sector Dividend Dogs ETF – NAV -5.07% 6.07% 7.68% 10.03%
ALPS Sector Dividend Dogs ETF – Market Price* -5.09% 6.08% 7.67% 10.03%
S-Network® Sector Dividend Dogs Index -4.91% 6.45% 8.13% 10.50%
S&P 500® Index 13.84% 12.51% 11.82% 13.34%

 

Total Expense Ratio (per the current prospectus) 0.36%.

 

Performance data quoted represents past performance. Past performance does not guarantee future results. Total return figures assume reinvestment of dividends and capital gains distributions, if any. The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data please visit www.alpsfunds.com or call 1.866.675.2639.

 

Net Asset Value (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 29, 2012.

 

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

 

The S-Network® Sector Dividend Dogs Index is designed to serve as a fair, impartial and transparent measure of the performance of US large cap equities with above average dividend yields. The Underlying Index is a portfolio of fifty stocks derived from the S-Network US Equity WR Large-Cap 500 Index ("S-Net 500"). The index is reported on a total return basis, which assumes reinvestment of any dividends and distributions realized during a given time period.

 

The S&P 500® Index is an index of 500 stocks chosen for market size, liquidity and industry grouping among other factors. Total return assumes reinvestment of any dividends and distributions realized during a given time period.

 

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 Sector Dividend Dogs 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 ETF.

 

2 | November 30, 2023

 

 

ALPS Sector Dividend Dogs ETF

 

Performance Overview November 30, 2023 (Unaudited)

 

Top 10 Holdings* (as of November 30, 2023)

 

Seagate Technology Holdings PLC 2.45 %
Intel Corp. 2.38 %
AT&T, Inc. 2.33 %
Verizon Communications, Inc. 2.32 %
Citigroup, Inc. 2.30 %
Fastenal Co. 2.22 %
Williams Cos., Inc. 2.20 %
Truist Financial Corp. 2.18 %
International Business Machines Corp. 2.17 %
International Paper Co. 2.16 %
Total % of Top 10 Holdings 22.71 %

 

* % of Total Investments

 

Future holdings are subject to change.

Sector Allocation* (as of November 30, 2023)

 

Information Technology 10.83 %
Communication Services 10.79 %
Financials 10.36 %
Energy 10.31 %
Materials 10.21 %
Industrials 10.17 %
Utilities 10.02 %
Consumer Staples 9.89 %
Health Care 8.99 %
Consumer Discretionary 8.26 %
Money Market Fund 0.17 %
Total 100.00 %

 

Growth of $10,000 (as of November 30, 2023)

 

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 over the past ten years 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 | November 30, 2023

 

 

ALPS International Sector Dividend Dogs ETF

 

Performance Overview November 30, 2023 (Unaudited)

 

Investment Objective

The ALPS International Sector Dividend Dogs ETF (the “Fund” or “IDOG”) seeks investment results that replicate as closely as possible, before fees and expenses, the performance of the S-Network® International Sector Dividend Dogs Index (the “Underlying Index”).

 

The Underlying Index is a rules-based index intended to give investors a means of tracking the overall performance of the highest dividend paying stocks (i.e. “Dividend Dogs”) in the S-Network® Developed International Equity 1000 Index, a universe of mainly large capitalization stocks in international developed markets not located in the Americas (the “S-Net Developed Markets”) on a sector-by-sector basis. “Dividend Dogs” refers to the five stocks in each of the Global Industry Classification Standard (“GICS”) sectors, excluding the Real Estate sector, that make up the S-Net Developed Markets which offer the highest dividend yields.

 

Performance Overview

The Fund, for the trailing twelve-month period ended November 30, 2023, generated a total return of 16.71%, relatively in-line with the Fund’s Underlying Index, net of fees, which returned 17.21%. The Fund outperformed the Morningstar Developed Markets ex-North America Index (MSDINUS), which returned 11.87% for the same period.

 

The trailing twelve-month yield for the Fund’s constituents as of November 30, 2023 was 4.76%, compared to the MSDINUS Index yield of 3.17%.

 

Developed Markets (ex-U.S.), as represented by the MSDINUS Index, returned 11.87% for the trailing twelve-month period ended November 30, 2023 compared to the S&P 500® Index return of 13.84%, as the fiscal year 2023 saw global markets rebound from the 2022 lows. The European Central Bank and the Federal Reserve continued on their path of quantitative tightening in 2023 to combat inflation, with most international developed countries nearing or reaching peak interest rate levels. Inflationary pressures including energy prices fell sharply for most of the developed world, driving prices and equity multiples higher as fears of substantially lower growth abated. Main macroeconomic talking points throughout 2023 centered on the path of future interest rates driven by monetary policy, and inflation trending towards the European Central Bank's (ECB) and Fed’s 2% inflation target. Despite the persistent recession calls in 2023, developed ex-US stocks have shown signs of resiliency, with real GDP so far surprising to the upside in Q3. The latest economic data displays Real GDP year-over-year rising to 5.2% in the US and 2.4% for Developed Economies. While the recent recovery in sentiment and returns has caused ex-US stocks to rally, the MSDINUS Index Price-to-Earnings (P/E) ratio of 13.34x remains below its 10-year average. Looking forward, ALPS Advisors believes markets are likely be data-dependent on job growth, Consumer Price Index (CPI), spending and manufacturing data to justify the recent recovery in valuations.

 

Compared to the MSDINUS Index, the Fund saw a positive impact from security selection and an insignificant impact from asset allocation, leading to 4.82% outperformance over the Index. The asset allocation saw positive contributions from a relative underweight position to Health Care and Real Estate and overweights to Information Technology and Utilities. The security selection outperformance was mainly attributed to IDOG’s selection of high-yielding value securities across all sectors (excluding Real Estate) that far outperformed core and growth across international developed markets year-to-date.

 

From a geographical perspective, the highest contribution to return was attributed to holdings based in Japan, while the Fund’s ALPS Advisors believes performance was adversely impacted by holdings based in Israel.

 

The best-performing stocks for the trailing twelve-month period were NEC Corp. (6701 JP), which increased 64.25%, Koninklijke Philips NV (PHIA NA), which returned 58.25%, and Sage Group Plc. (SGE LN), which gained 56.27%. The worst performing stocks for the trailing twelve-month period were ICL Group Ltd. (ICL IT), losing 28.70%, South32 Ltd. (S32 AU), falling 23.02%; and Ericsson LM-B (ERICB SS), which decreased 14.94%.

 

Looking ahead, the Fund’s strategy of annually selecting the five highest-yielding securities in each of the ten sectors in the S-Network Developed Markets (Ex N.A.) Index is intended to provide a high yield relative to the MSDINUS Index, the potential for market participation in all economic cycles through equal sector weighting, and a deep value portfolio of securities as identified through high yield relative to their sector peers.

 

4 | November 30, 2023

 

 

ALPS International Sector Dividend Dogs ETF

 

Performance Overview November 30, 2023 (Unaudited)

 

Performance (as of November 30, 2023)

 

  1 Year 5 Year 10 Year

Since

Inception^

ALPS International Sector Dividend Dogs ETF – NAV 16.71% 7.41% 4.11% 5.58%
ALPS International Sector Dividend Dogs ETF – Market Price* 16.40% 7.45% 4.09% 5.61%
S-Network® International Sector Dividend Dogs Index 17.21% 7.83% 4.51% 5.98%
Morningstar® Developed Markets ex-North America Index 11.87% 5.65% 3.86% 5.22%

 

Total Expense Ratio (per the current prospectus) 0.50%.

 

Performance data quoted represents past performance. Past performance does not guarantee future results. Total return figures assume reinvestment of dividends and capital gains distributions, if any. The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data please visit www.alpsfunds.com or call 1.866.675.2639.

 

Net Asset Value (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 28, 2013.

 

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

 

The S-Network® International Sector Dividend Dogs Index is designed to serve as a fair, impartial and transparent measure of the performance of international large cap equities with above average dividend yields. The Underlying Index is a portfolio of fifty stocks derived from the S-Network Developed International Equity 1000 Index. Total Return assumes reinvestment of any dividends and distributions realized during a given time period. Net Total Return (NTR) is obtained by reinvesting the net dividend, which is equal to the ordinary gross dividend minus the amount of withholding tax.

 

Morningstar® Developed Markets ex-North America Index measures the performance of companies in developed markets ex-North America. It covers approximately 97% of the full market capitalization in the Developed Markets ex-North America.

 

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 International Sector Dividend Dogs 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 ETF.

 

5 | November 30, 2023

 

 

ALPS International Sector Dividend Dogs ETF

 

Performance Overview November 30, 2023 (Unaudited)

 

Top 10 Holdings* (as of November 30, 2023)

 

Fortescue, Ltd.     2.55 %
Telia Co. AB     2.29 %
Stellantis NV     2.28 %
Swiss Re AG     2.27 %
Erste Group Bank AG     2.25 %
Japan Tobacco, Inc.     2.23 %
The Sage Group Plc     2.15 %
Danone SA     2.14 %
Bouygues SA     2.14 %
Intesa Sanpaolo SpA     2.13 %
Total % of Top 10 Holdings     22.43 %

 

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

 

Future holdings are subject to change.

Sector Allocation* (as of November 30, 2023)

 

Financials     10.82 %
Consumer Staples     10.31 %
Communication Services     10.19 %
Information Technology     10.11 %
Utilities     10.10 %
Materials     10.04 %
Energy     9.58 %
Industrials     9.56 %
Health Care     9.03 %
Consumer Discretionary     7.78 %
Automobiles     2.28 %
Money Market Fund     0.20 %
Total     100.00 %

 

Growth of $10,000 (as of November 30, 2023)

 

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 over the past ten years 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 | November 30, 2023

 

 

ALPS Emerging Sector Dividend Dogs ETF

 

Performance Overview November 30, 2023 (Unaudited)

 

Investment Objective

The ALPS Emerging Sector Dividend Dogs ETF (the “Fund” or “EDOG”) seeks investment results that replicate as closely as possible, before fees and expenses, the performance of the S-Network® Emerging Sector Dividend Dogs Index (the “Underlying Index”).

 

The Underlying Index is a rules-based index intended to give investors a means of tracking the overall performance of the highest dividend paying stocks (i.e. “Dividend Dogs”) in the S-Network® Emerging Markets Liquid 500 Index, a universe of mainly large capitalization stocks domiciled in emerging markets (the “S-Network Emerging Markets”) on a sector-by-sector basis. “Dividend Dogs” refers to the five stocks in each of the Global Industry Classification Standard (“GICS”) sectors, excluding the real estate sector, that make up the S-Network® Emerging Markets which offer the highest dividend yields. Emerging market countries are countries that major international financial institutions, such as the World Bank, generally consider to be less economically mature than developed nations.

 

Performance Overview

The Fund, for the trailing twelve-month period ended November 30, 2023, generated a total return of 4.88%, in-line with the Fund’s Underlying Index, net of fees, which returned 4.88%. The Fund underperformed the Morningstar Emerging Markets Index (MEMMN), which returned 5.90% for the same period.

 

The trailing twelve-month yield (TTM) for the fund’s constituents as of November 30, 2023 was 6.76% vs. 2.68% for the MEMMN.

 

Emerging markets, as represented by the MEMMN gained 5.90% for the TTM period ended November 30, 2023 compared to the S&P 500® Index return of 13.84%, as the fiscal year 2023 saw global markets rebound from the 2022 lows. Developing economies and emerging market stocks as a whole were buoyed by positive catalysts including a weakening US dollar and inexpensive valuations. Emerging markets’ relative underperformance stemmed from inflationary pressures, currency devaluation, higher borrowing costs, and below-consensus growth from China’s economic recovery, which has been underwhelming due to regulatory crackdowns in tech and recent deflationary pressures. Main macroeconomic talking points throughout 2023 centered on the path of future interest rates driven by monetary policy, and inflation trending towards the European Central Bank (ECB) and Fed’s 2% inflation target. While inflation in emerging markets remains elevated relative to developed economies, expectations continue to point to lower levels, which should benefit company margins and manufacturing. The latest economic data displays Real GDP year-over-year rising to 5.2% in the US, 2.4% for Developed Economies, 4.5% for Emerging Economies, and 4.9% for China. In terms of valuations, the MEMMN currently exhibits a (P/E) ratio of 15.4x, slightly above its 10-year average. Looking forward, ALPS Advisors believes markets are likely to be data-dependent on job growth, Consumer Price Index (CPI), spending and manufacturing data to justify the recent recovery in valuations.

 

Compared to the MEMMN, the Fund saw a negative impact (-0.60%) from the sector allocation effect which was largely driven by the relative underweight in Information Technology (average weight for the period of 9.60% vs. 18.25% in MEMMN) and a relative overweight to Utilities over the one year period (average weight for the period of 10.21% vs. 3.06% in MEMMN), a result of the equal sector weighting strategy. The Fund also saw a positive impact of 0.54% due to the selection effect, as EDOG’s higher-yielding names in Financials and Utilities were outperformers, while constituents in Communication Services and Materials caused relative underperformance relative to MEMMN.

 

From a geographical perspective, the highest contribution to return was attributed to holdings based in Brazil. The Fund’s performance was adversely impacted by holdings based in South Africa.

 

The best-performing stocks for the period were Petroleo Brasileiro SA (PETR3 BZ), which increased 124.60%, Ecopetrol SA (EC US), gaining 66.11%, and Cez AS (CEZ CP), which gained 51.67%. The worst-performing stocks for the trailing twelve-month period were Multichoice Group LTD (MCG SJ), losing 48.94%, African Rainbow Minerals LTD (ARI SJ), which fell 35.72%, and Maanshan Iron & Steel (323 HK), decreasing 34.10%.

 

Looking ahead, the Fund’s strategy of annually selecting the five highest-yielding securities in each of the ten sectors in the S-Net Emerging Markets Index is intended to provide high yield relative to the MEMMN, potential for market participation in all economic cycles through equal sector weighting, and a deep value portfolio of securities as identified through high yield relative to their sector peers.

 

7 | November 30, 2023

 

 

ALPS Emerging Sector Dividend Dogs ETF

 
Performance Overview November 30, 2023 (Unaudited)

 

Performance (as of November 30, 2023)

 

  1 Year 5 Year

Since

Inception^

ALPS Emerging Sector Dividend Dogs ETF – NAV 4.88% 4.64% 2.43%
ALPS Emerging Sector Dividend Dogs ETF – Market Price* 4.83% 4.70% 2.43%
S-Network® Emerging Sector Dividend Dogs Index 4.88% 5.29% 3.18%
Morningstar® Emerging Markets Index 5.90% 3.69% 3.47%

 

Total Expense Ratio (per the current prospectus) 0.60%.

 

Performance data quoted represents past performance. Past performance does not guarantee future results. Total return figures assume reinvestment of dividends and capital gains distributions, if any. The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data please visit www.alpsfunds.com or call 1.866.675.2639.

 

Net Asset Value (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 March 28, 2014.

 

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

 

The S-Network® Emerging Sector Dividend Dogs Index is a rules-based index intended to give investors a means of tracking the overall performance of the highest dividend paying stocks in the S-Network Emerging Markets Liquid 500 Index, a universe of mainly large capitalization stocks domiciled in emerging markets on a sector-by-sector basis. Emerging market countries are countries that major international financial institutions, such as the World Bank, generally consider to be less economically mature than developed nations. 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).

 

Morningstar® Emerging Markets Index measures the performance of emerging markets targeting the top 97% of stocks by 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 Emerging Sector Dividend Dogs 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 ETF.

 

8 | November 30, 2023

 

 

ALPS Emerging Sector Dividend Dogs ETF

 

Performance Overview November 30, 2023 (Unaudited)

 

Top 10 Holdings* (as of November 30, 2023)

 

TOTVS SA     3.06 %
Cia Siderurgica Nacional SA     2.81 %
Dr Reddy's Laboratories, Ltd.     2.59 %
JBS S/A     2.57 %
Infosys, Ltd.     2.49 %
Bangkok Dusit Medical Services PCL     2.45 %
Richter Gedeon Nyrt     2.43 %
African Rainbow Minerals, Ltd.     2.37 %
Wipro, Ltd.     2.35 %
Sime Darby Bhd     2.28 %
Total % of Top 10 Holdings     25.40 %

 

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

 

Future holdings are subject to change. 

Sector Allocation* (as of November 30, 2023)

 

Industrials 11.52%
Materials 11.07%
Financials 10.71%
Consumer Staples 10.50%
Utilities 10.08%
Information Technology 9.78%
Health Care 9.69%
Communication Services 9.67%
Energy 9.38%
Consumer Discretionary 7.45%
Money Market Fund 0.15%
Total 100.00%

 

Growth of $10,000 (as of November 30, 2023)

 

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 | November 30, 2023

 

 

ALPS REIT Dividend Dogs ETF

 

Performance Overview November 30, 2023 (Unaudited)

 

Investment Objective

The ALPS REIT Dividend Dogs ETF (the “Fund” or "RDOG") seeks investment results that replicate as closely as possible, before fees and expenses, the performance of the S-Network® REIT Dividend Dogs Index (the “Underlying Index”).

 

The Underlying Index is a rules-based index intended to give investors a means of tracking the overall performance of the highest dividend paying real estate investment trusts (“REITs”) (i.e. “Dividend Dogs”) in the S-Network® Composite US REIT Index, a universe of mainly REITs listed in the United States (the “S-Net U.S. REIT” or "SNREIT"), on a segment-by-segment basis. “Dividend Dogs” refers to the five REITs in each of the nine segments that make up the S-Net U.S. REIT which offer the highest dividend yields.

 

Performance Overview

The Fund, for the twelve-month period ended November 30, 2023, generated a total return of -7.16%, largely in line with the Fund’s Underlying Index, net of fees, which returned -6.69%. The Fund underperformed the broader U.S. REIT market, as represented by the S-Network Composite US REIT Index (SNREIT), which returned -2.87% for the same period.

 

The trailing twelve-month (TTM) yield for the fund as of November 30, 2023 was 7.06% while the SNREIT TTM yield was 4.54% as of November 30, 2023.

 

The S&P 500® Index returned 13.84% for the TTM period that ended November 30, 2023, as the fiscal year 2023 saw markets rebound from 2022 lows. The Federal Reserve Bank (Fed) continued its path of quantitative tightening in 2023 to combat inflation, reaching their target of peak rates with expectations of rate cuts into 2024 as Consumer Price Index (CPI), energy prices and yields trended towards more acceptable levels. US markets rallied substantially off the secondary effects of the Fed’s actions leading to better odds of a soft landing, with expectations of rate cuts driving growth and equity multiples higher into the next year. Main macroeconomic talking points throughout 2023 centered on the path of future interest rates driven by monetary policy, and inflation trending towards the Fed’s 2% inflation target. Inflation significantly declined throughout 2023, with November 2023 numbers showing year-over-year CPI around 3.1%. Despite persistent recession calls, ALPS Advisors believes a gradual reduction in interest rates is likely to lead to an earnings recovery in the US, easing financial conditions for both US and global equities. With the recent recovery in sentiment and price for US markets, the S&P 500® Index Price-to-Earnings (P/E) ratio of 22.2x is slightly above its 10-year average of 20.6x. Looking forward, ALPS Advisors believes markets are likely to be data-dependent on job growth, CPI, spending and manufacturing data to justify the recent recovery in valuations.

 

Rising rates and a work-from-home culture negatively impacted Office REITs, as properties became less attractive with higher cap rates and pressure of funds-from-operations (FFO). In contrast, Retail REITs and Technology REITs, provided positive performance for the Fund.

 

The best-performing stocks in the Fund for the period were Necessity Retail REIT Inc. (RTL), which increased 37.08%, Park Hotels & Resorts Inc. (PK), gaining 33.26%, and Digital Realty Trust (DLR), which rose 28.96%. The largest detractors were Medical Properties Trust Inc. (MPW), falling 58.59%, Office Properties Income Trust (OPI), losing 52.51% and Hudson Pacific Properties Inc. (HPP), which fell 37.04%.

 

Looking ahead, the Fund’s strategy of annually selecting the five highest-yielding securities in each of the nine segments in the S-Network Composite US REIT Index is intended to provide meaningfully higher yield relative to the S-Network Composite US REIT Index, potential for market participation in all economic cycles through equal segment weighting, and a value portfolio of securities as identified through high yield relative to their segment peers.

 

10 | November 30, 2023

 

 

ALPS REIT Dividend Dogs ETF

 

Performance Overview November 30, 2023 (Unaudited)

 

Performance (as of November 30, 2023)

 

  1 Year 5 Year 10 Year Since Inception^
ALPS REIT Dividend Dogs ETF – NAV -7.16% 0.76% 3.19% 2.09%
ALPS REIT Dividend Dogs ETF – Market Price* -6.87% 0.76% 3.15% 2.08%
S-Network® REIT Dividend Dogs Index -6.69%
S-Network® Composite US REIT Index -2.87% 3.66%
S-Network® REIT Dividend Dogs Index/S&P United States REIT Index** -6.69% 1.09% 5.29% 4.78%

 

Total Expense Ratio (per the current prospectus) is 0.35%.

 

Performance data quoted represents past performance. Past performance does not guarantee future results. On January 2, 2020, the Fund changed its Underlying Index and principal investment strategies. Consequently, the Fund's total returns shown above for the periods prior to January 2, 2020 are not necessarily indicative of the performance of the Fund, as it is currently managed. Total return figures assume reinvestment of dividends and capital gains distributions, if any. The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data please visit www.alpsfunds.com or call 1.866.759.5679.

 

Net Asset Value (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 Inception Date was May 7, 2008.

 

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

 

** The performance shown reflects a combination of the Fund's Underlying Index, and for periods prior to January 2, 2020, the S&P United States REIT Index. Prior to January 2, 2020, the Fund used a different Underlying Index than the S&P United States REIT Index. Therefore, the historical returns shown for the periods prior to January 2, 2020, are not necessarily indicative of the historical strategy of the Fund.

 

The S-Network® REIT Dividend Dogs Index, like the S-Net U.S. REIT from which components of the Underlying Index are selected, divides into nine segments, eight of which are based on Global Industry Classification Standard (“GICS”) Sub-Industries (excluding Technology REITs involved in cell towers and/or data centers) and a separate Technology REIT segment based on the research of the Underlying Index provider, S-Network® Global Indexes, Inc. (the “Index Provider”). The Underlying Index generally consists of 45 REITs on each annual reconstitution date. The Underlying Index’s REITs must be constituents of the S-Net U.S. REIT universe, which includes a universe of mainly REITs listed in the United States. The selection criteria for the universe also includes requirements for segment inclusion, primary exchange listing, minimum market capitalization, share price, average daily trading volume and other factors. The Underlying Index is rebalanced quarterly. The index is reported on a total return basis, which assumes reinvestment of any dividends and distributions realized during a given time period. The index commenced operations on October 29, 2019.

 

The S-Network® Composite US REIT Index (the “S-Net U.S. REIT” or “SNREIT”) is a benchmark index for the Real Estate Investment Trust component of the US stock market. The SNREIT provides the universe of stocks for RDOGX. The selection criteria for SNREIT include requirements for sector inclusion, primary exchange listing, minimum market capitalization, minimum average daily trading volume, and other factors. All constituents of RDOGX must be constituents of SNREIT. The index commenced operations on February 12, 2016.

 

The S&P United States REIT Index defines and measures the investable universe of publicly traded real estate investment trusts domiciled in the United States.

 

The indexes are not actively managed and do not reflect any deductions for fees, expenses or taxes. Total return assumes reinvestment of any dividends and distributions realized during a given time period. 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 REIT Dividend Dogs 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 ETF.

 

11 | November 30, 2023

 

 

ALPS REIT Dividend Dogs ETF

 

Performance Overview November 30, 2023 (Unaudited)

 

Top 10 Holdings* (as of November 30, 2023)

 

Crown Castle, Inc. 2.67%
Uniti Group, Inc. 2.62%
American Tower Corp. 2.61%
Park Hotels & Resorts, Inc. 2.59%
Outfront Media, Inc. 2.52%
Spirit Realty Capital, Inc. 2.52%
Sabra Health Care REIT, Inc. 2.51%
CBL & Associates Properties, Inc. 2.46%
Simon Property Group, Inc. 2.46%
Digital Realty Trust, Inc. 2.41%
Total % of Top 10 Holdings 25.37%

 

* % of Total Investments

 

Future holdings are subject to change.

REIT Sector Allocation* (as of November 30, 2023)

 

Technology REITs 12.67%
Retail REITs 11.76%
Hotel & Resort REITs 11.31%
Specialized REITs 11.26%
Health Care REITs 10.86%
Industrial REITs 10.71%
Diversified REITs 10.66%
Residential REITs 10.47%
Office REITs 10.12%
Money Market Fund 0.18%
Total 100.00%

 

Growth of $10,000 (as of November 30, 2023)

 

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 over the past ten years 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.

 

12 | November 30, 2023

 

 

ALPS ETF Trust

 

Disclosure of Fund Expenses November 30, 2023 (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 November 30, 2023.

 

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
6/1/23

Ending

Account

Value

11/30/23

 

 

Expense

Ratio(a)

Expenses Paid

During Period

6/1/23 –

11/30/23(b)

ALPS Sector Dividend Dogs ETF        
Actual $ 1,000.00 $ 1,054.50 0.36% $ 1.85
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,023.26 0.36% $ 1.83
ALPS International Sector Dividend Dogs ETF        
Actual $ 1,000.00 $ 1,102.40 0.50% $ 2.64
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,022.56 0.50% $ 2.54
ALPS Emerging Sector Dividend Dogs ETF        
Actual $ 1,000.00 $ 1,056.70 0.60% $ 3.09
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,022.06 0.60% $ 3.04
ALPS REIT Dividend Dogs ETF        
Actual $ 1,000.00 $ 1,087.30 0.35% $ 1.83
Hypothetical (5% return before expenses) $ 1,000.00 $ 1,023.31 0.35% $ 1.78

 

 

(a) Annualized based on the Fund's most recent fiscal half-year expenses.
(b) Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (183), divided by 365.

 

13 | November 30, 2023

 

 

ALPS ETF Trust

 

Report of Independent Registered Public Accounting Firm

 

To the Shareholders of ALPS Sector Dividend Dogs ETF, ALPS International Sector Dividend Dogs ETF, ALPS Emerging Sector Dividend Dogs ETF and ALPS REIT Dividend Dogs ETF and Board of Trustees of ALPS ETF Trust

 

Opinion on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of ALPS Sector Dividend Dogs ETF, ALPS International Sector Dividend Dogs ETF, ALPS Emerging Sector Dividend Dogs ETF and ALPS REIT Dividend Dogs ETF (the “Funds”), each a series of ALPS ETF Trust, as of November 30, 2023, the related statements of operations and changes in net assets, the related notes, and the financial highlights for the year then ended (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of November 30, 2023, the results of their operations, the changes in net assets, and the financial highlights for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

 

The Funds’ financial statements and financial highlights for the years ended November 30, 2022, and prior, were audited by other auditors whose report dated January 27, 2023, expressed an unqualified opinion on those financial statements and financial highlights.

 

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 laws 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of November 30, 2023, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. 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.

 

We have served as the auditor of one or more investment companies advised by ALPS Advisors, Inc. since 2013.

 

COHEN & COMPANY, LTD.

Philadelphia, Pennsylvania

January 29, 2024

 

14 | November 30, 2023

 

 

ALPS Sector Dividend Dogs ETF

 

Schedule of Investments November 30, 2023

 

Security Description   Shares     Value  
COMMON STOCKS (99.48%)                
Communication Services (10.76%)                
AT&T, Inc.     1,531,630     $ 25,379,109  
Interpublic Group of Cos., Inc.     695,701       21,385,849  
Omnicom Group, Inc.     279,841       22,563,580  
Paramount Global, Class B     1,614,527       23,200,753  
Verizon Communications, Inc.     659,819       25,290,862  
Total Communication Services             117,820,153  
                 
Consumer Discretionary (8.23%)                
Best Buy Co., Inc.     301,194       21,366,703  
Hasbro, Inc.     315,131       14,625,230  
Newell Brands, Inc.     2,216,967       16,915,458  
VF Corp.     1,174,563       19,650,439  
Whirlpool Corp.     161,488       17,586,043  
Total Consumer Discretionary             90,143,873  
                 
Consumer Staples (9.86%)                
Altria Group, Inc.     500,398       21,036,732  
Kimberly-Clark Corp.     173,346       21,448,101  
Kraft Heinz Co.     670,065       23,525,982  
Philip Morris International,                
Inc.     235,570       21,992,815  
Walgreens Boots Alliance,                
Inc.(a)     1,002,610       19,992,043  
Total Consumer Staples             107,995,673  
                 
Energy (10.28%)                
Devon Energy Corp.     418,180       18,805,555  
Kinder Morgan, Inc.     1,312,876       23,067,231  
ONEOK, Inc.     340,540       23,446,179  
Phillips 66     180,290       23,237,578  
Williams Cos., Inc.     652,564       24,007,830  
Total Energy             112,564,373  
                 
Financials (10.32%)                
Citigroup, Inc.     543,431       25,052,169  
Franklin Resources, Inc.     849,283       21,062,219  
Lincoln National Corp.     859,762       20,445,140  
Prudential Financial, Inc.     231,865       22,671,760  
Truist Financial Corp.     741,078       23,818,247  
Total Financials             113,049,535  
                 
Health Care (8.95%)                
AbbVie, Inc.     147,952       21,066,885  
Gilead Sciences, Inc.     290,062       22,218,749  
Medtronic PLC     275,736       21,857,593  
Organon & Co.     1,138,943       12,892,835  
Viatris, Inc.     2,183,031       20,040,225  
Total Health Care             98,076,287  
                 
Industrials (10.13%)                
3M Co.     207,744       20,581,198  
Fastenal Co.     404,457       24,255,286  
Snap-On, Inc.     84,881       23,315,962  
Stanley Black & Decker, Inc.     243,047       22,092,972  

Security Description   Shares     Value  
Industrials (continued)            
United Parcel Service, Inc.,                
Class B     136,978     $ 20,767,235  
Total Industrials             111,012,653  
                 
Information Technology (10.80%)                
Corning, Inc.     702,320       20,009,097  
HP, Inc.     748,607       21,964,129  
Intel Corp.     580,440       25,945,668  
International Business                
Machines Corp.     149,117       23,643,991  
Seagate Technology Holdings                
PLC     337,376       26,686,442  
Total Information Technology             118,249,327  
                 
Materials (10.17%)                
Amcor PLC     2,385,742       22,616,834  
International Paper Co.     636,954       23,529,081  
LyondellBasell Industries NV,                
Class A     222,027       21,114,767  
Newmont Mining Corp.     569,915       22,904,884  
The Dow Chemical Co.     410,912       21,264,696  
Total Materials             111,430,262  
                 
Utilities (9.98%)                
Dominion Resources, Inc.     468,852       21,257,750  
Duke Energy Corp.     241,922       22,324,562  
Edison International     315,441       21,131,393  
Pinnacle West Capital Corp.     287,774       21,565,783  
Southern Co.     324,882       23,060,124  
Total Utilities             109,339,612  
                 
TOTAL COMMON STOCKS                
(Cost $1,181,121,238)             1,089,681,748  

 

    7 Day Yield     Shares     Value  
SHORT TERM INVESTMENTS (0.16%)                    
Money Market Fund (0.16%)                        
State Street Institutional                        
Treasury Plus Money                        
Market Fund (Premier                        
Class)     5.31 %     1,759,568       1,759,568  
                         
TOTAL SHORT TERM INVESTMENTS                        
                         
(Cost $1,759,568)                     1,759,568  
                         
TOTAL INVESTMENTS (99.64%)                        
(Cost $1,182,880,806)                   $ 1,091,441,316  
OTHER ASSETS IN EXCESS OF LIABILITIES (0.36%)               3,936,830  
NET ASSETS - 100.00%                   $ 1,095,378,146  

 

(a) Security, or a portion of the security position is currently on loan. The total market value of securities on loan is $17,948,193.

 

See Notes to Financial Statements.

 

15 | November 30, 2023

 

 

ALPS International Sector Dividend Dogs ETF

 

Schedule of Investments November 30, 2023

 

Security Description   Shares     Value  
COMMON STOCKS (99.51%)                
Australia (8.12%)                
BHP Group, Ltd.     163,672     $ 5,007,178  
Fortescue, Ltd.(a)     364,353       6,016,255  
South32, Ltd.     2,154,768       4,385,195  
Woodside Energy Group, Ltd.     186,056       3,811,036  
Total Australia             19,219,664  
                 
Austria (2.25%)                
Erste Group Bank AG     131,605       5,316,057  
                 
Denmark (1.70%)                
A P Moller-Maersk A/S     2,546       4,014,923  
                 
Finland (2.04%)                
Fortum Oyj     343,976       4,824,351  
                 
France (16.23%)                
Amundi SA(b)(c)     79,413       4,883,895  
Bouygues SA     132,969       5,052,735  
Cie Generale des                
Etablissements Michelin                
SCA     142,922       4,793,106  
Credit Agricole SA     378,355       4,951,109  
Danone SA     78,845       5,060,944  
Engie SA     284,733       4,933,471  
Orange SA     391,274       4,814,370  
Sanofi SA     42,095       3,915,793  
Total France             38,405,423  
                 
Germany (5.52%)                
Bayerische Motoren Werke AG     44,125       4,591,171  
Fresenius Medical Care AG     105,534       4,322,678  
Mercedes-Benz Group AG     64,134       4,159,251  
Total Germany             13,073,100  
                 
Hong Kong (1.86%)                
CITIC, Ltd.     4,664,000       4,394,536  
                 
Israel (1.65%)                
Israel Chemicals, Ltd.     775,573       3,895,795  
                 
Italy (6.15%)                
Enel SpA     682,241       4,816,605  
Eni SpA     285,337       4,710,996  
Intesa Sanpaolo SpA     1,749,399       5,029,974  
Total Italy             14,557,575  
                 
Japan (17.68%)                
Canon, Inc.(a)     187,063       4,803,378  
ENEOS Holdings, Inc.     1,151,100       4,537,318  
Japan Tobacco, Inc.     205,400       5,265,921  
Kyocera Corp.     89,820       4,961,728  
NEC Corp.     83,300       4,629,651  
Nippon Steel Corp.     188,500       4,395,282  
Nippon Yusen KK(a)     169,700       4,548,683  
Sumitomo Corp.     217,900       4,556,118  

Security Description   Shares     Value  
Japan (continued)                
Takeda Pharmaceutical Co.,                
Ltd.     147,300     $ 4,138,031  
Total Japan             41,836,110  
                 
Netherlands (4.14%)                
Koninklijke Philips NV     216,373       4,420,726  
Stellantis NV     248,293       5,378,826  
Total Netherlands             9,799,552  
                 
Norway (3.92%)                
Aker BP ASA     161,785       4,636,762  
Telenor ASA     432,232       4,645,916  
Total Norway             9,282,678  
                 
Poland (2.07%)                
ORLEN SA     332,626       4,908,455  
                 
Portugal (2.01%)                
Jeronimo Martins SGPS SA     192,631       4,759,686  
                 
Spain (5.91%)                
Endesa SA     220,096       4,596,214  
Redeia Corp. SA     278,835       4,667,990  
Telefonica SA     1,098,135       4,726,272  
Total Spain             13,990,476  
                 
Sweden (6.16%)                
H & M Hennes & Mauritz AB,                
Class B     301,322       4,816,493  
Telefonaktiebolaget LM                
Ericsson, Class B     885,064       4,378,176  
Telia Co. AB     2,274,686       5,392,253  
Total Sweden             14,586,922  
                 
Switzerland (2.26%)                
Swiss Re AG     45,386       5,351,267  
                 
United Kingdom (9.84%)                
British American Tobacco PLC     139,965       4,438,678  
GSK PLC     251,263       4,502,439  
Imperial Brands PLC     206,505       4,813,870  
The Sage Group Plc     355,565       5,074,626  
Vodafone Group PLC     4,955,622       4,462,569  
Total United Kingdom             23,292,182  
                 
TOTAL COMMON STOCKS                
(Cost $222,762,311)             235,508,752  

 

16 | November 30, 2023

 

 

ALPS International Sector Dividend Dogs ETF

 

Schedule of Investments November 30, 2023

 

    7 Day Yield     Shares     Value  
SHORT TERM INVESTMENTS (2.13%)                        
Money Market Fund (0.20%)                        
State Street Institutional Treasury Plus Money Market Fund (Premier Class)                        
(Cost $473,041)     5.31 %     473,041     $ 473,041  
                         
Investments Purchased with Collateral                        
from Securities Loaned (1.93%)                        
State Street Navigator Securities Lending Government Money Market Portfolio, 5.37%                        
(Cost $4,563,243)             4,563,243     $ 4,563,243  
                         
TOTAL SHORT TERM INVESTMENTS                        
                         
(Cost $5,036,284)                     5,036,284  
                         
TOTAL INVESTMENTS (101.64%)                        
(Cost $227,798,595)                   $ 240,545,036  
LIABILITIES IN EXCESS OF OTHER ASSETS (-1.64%)                 (3,879,279 )
NET ASSETS - 100.00%                   $ 236,665,757  

 

(a) Security, or a portion of the security position is currently on loan. The total market value of securities on loan is $4,383,058.
(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 $4,883,895, representing 2.06% 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 November 30, 2023, the market value of those securities was $4,883,895, representing 2.06% of net assets.

 

See Notes to Financial Statements.

 

17 | November 30, 2023

 

 

ALPS Emerging Sector Dividend Dogs ETF

 

Schedule of Investments November 30, 2023

 

Security Description   Shares     Value  
COMMON STOCKS (99.35%)                
Brazil (12.71%)                
Cia Siderurgica Nacional SA     253,106     $ 844,364  
Engie Brasil Energia SA     73,000       645,158  
JBS S/A     163,800       772,401  
Petroleo Brasileiro SA     90,422       659,695  
TOTVS SA     136,241       922,012  
Total Brazil             3,843,630  
                 
Chile (8.40%)                
Banco Santander Chile, ADR     34,179       668,883  
Cia Sud Americana de Vapores SA     9,759,488       566,222  
Empresas CMPC SA     353,830       684,413  
Falabella SA(a)     265,410       619,589  
Total Chile             2,539,107  
                 
China (9.05%)                
BBMG Corp.(b)     5,656,000       543,059  
China Petroleum & Chemical Corp.     1,065,200       548,194  
COSCO SHIPPING Holdings Co., Ltd.     591,000       544,749  
Maanshan Iron & Steel Co., Ltd.(b)     3,468,000       546,086  
Sinotrans, Ltd.     1,518,000       553,851  
Total China             2,735,939  
                 
Colombia (4.30%)                
Bancolombia SA, ADR     23,886       659,015  
Ecopetrol SA, Sponsored ADR, Sponsored ADR     50,954       642,530  
Total Colombia             1,301,545  
                 
Czech Republic (4.27%)                
CEZ AS     14,927       660,334  
Komercni banka A.S.     20,342       629,826  
Total Czech Republic             1,290,160  
                 
Hungary (2.42%)                
Richter Gedeon Nyrt     29,022       731,472  
                 
India (7.40%)                
Dr Reddy's Laboratories, Ltd., ADR     11,163       780,294  
Infosys, Ltd., Sponsored ADR     42,657       748,630  
Wipro, Ltd., ADR(b)     145,935       707,785  
Total India             2,236,709  
                 
Indonesia (8.35%)                
Astra International Tbk PT     1,450,900       505,149  
Bukit Asam Tbk PT     3,169,200       494,485  
Indo Tambangraya Megah Tbk PT     302,000       478,021  
Indofood Sukses Makmur Tbk PT     1,340,900       555,466  

 

Security Description   Shares     Value  
Indonesia (continued)                
Perusahaan Gas Negara Tbk PT     6,853,200     $ 492,670  
Total Indonesia             2,525,791  
                 
Malaysia (10.26%)                
Maxis Bhd     676,300       566,063  
MISC Bhd     396,300       611,524  
Petronas Gas Bhd     165,500       598,848  
Sime Darby Bhd     1,293,900       685,896  
Sime Darby Plantation Bhd     660,500       639,308  
Total Malaysia             3,101,639  
                 
Mexico (5.99%)                
Coca-Cola Femsa SAB de CV, ADR     7,411       627,341  
El Puerto de Liverpool SAB de CV     106,652       621,177  
Kimberly-Clark de Mexico SAB de CV, Class A     278,600       563,665  
Total Mexico             1,812,183  
                 
Philippines (4.30%)                
Manila Electric Co.     98,290       637,672  
PLDT, Inc.     28,580       663,381  
Total Philippines             1,301,053  
                 
Russia (0.00%(c))                
Mobile TeleSystems PJSC, Sponsored ADR(a)(d)     64,600       646  
Novolipetsk Steel PJSC, GDR(a)(d)(e)     17,594       176  
Severstal PAO, GDR(a)(d)(e)     23,283       233  
X5 Retail Group NV, GDR(a)(d)(e)     17,785       178  
Total Russia             1,233  
                 
South Africa (10.15%)                
African Rainbow Minerals, Ltd.     73,912       712,488  
MultiChoice Group     153,373       550,479  
Nedbank Group, Ltd.     54,962       623,347  
Ninety One, Ltd.     294,764       642,340  
Vodacom Group, Ltd.     105,399       542,335  
Total South Africa             3,070,989  
                 
Thailand (10.20%)                
Bangkok Dusit Medical Services PCL     987,200       736,664  
Bumrungrad Hospital Pcl     105,500       668,794  
Delta Electronics Thailand PCL     255,000       563,606  
Home Product Center PCL     1,582,400       530,803  
Intouch Holdings PCL     295,800       586,513  
Total Thailand             3,086,380  

 

18 | November 30, 2023

 

 

ALPS Emerging Sector Dividend Dogs ETF

 

Schedule of Investments November 30, 2023

 

Security Description   Shares     Value  
Turkey (1.55%)            

Tofas Turk Otomobil Fabrikasi A.S.

    56,838     $ 469,463  
                 
TOTAL COMMON STOCKS                
(Cost $31,288,651)             30,047,293  

 

    7 Day Yield     Shares     Value  
SHORT TERM INVESTMENTS (0.32%)                        
Money Market Fund (0.15%)                        
State Street Institutional Treasury Plus Money Market Fund (Premier Class) (Cost $46,205)     5.31 %     46,205     $ 46,205  
                         
Investments Purchased with Collateral                        
from Securities Loaned (0.17%)                        
State Street Navigator Securities Lending Government Money Market Portfolio, 5.37% (Cost $51,420)             51,420       51,420  
TOTAL SHORT TERM INVESTMENTS                        
                         
(Cost $97,625)                     97,625  
                         
TOTAL INVESTMENTS (99.67%)                        
(Cost $31,386,276)                   $ 30,144,918  
OTHER ASSETS IN EXCESS OF LIABILITIES (0.33%)                     98,516  
NET ASSETS - 100.00%                   $ 30,243,434  

  

(a) Non-income producing security.
(b) Security, or a portion of the security position is currently on loan. The total market value of securities on loan is $172,750.
(c) Less than 0.005%.
(d) As a result of the use of significant unobservable inputs to determine fair value, these investments have been classified as Level 3 securities under the fair value hierarchy.
(e) 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 November 30, 2023, the market value of those securities was $587, representing 0.01% of net assets.

 

See Notes to Financial Statements.

 

19 | November 30, 2023

 

 

ALPS REIT Dividend Dogs ETF

 

Schedule of Investments November 30, 2023

 

Security Description   Shares     Value  
COMMON STOCKS (99.63%)                
Data Center REITs (2.37%)                
Equinix, Inc.     339     $ 276,288  
                 
Diversified REITs (10.64%)                
Broadstone Net Lease, Inc.     15,906       254,496  
CTO Realty Growth, Inc.     15,224       257,286  
Gladstone Commercial Corp.     19,775       247,187  
Global Net Lease, Inc.     23,301       204,583  
One Liberty Properties, Inc.     13,534       276,500  
Total Diversified REITs             1,240,052  
                 
Health Care REITs (10.83%)                
Global Medical REIT, Inc.     27,848       279,315  
Healthcare Realty Trust, Inc.     15,707       239,846  
Medical Properties Trust, Inc.     39,549       191,813  
Omega Healthcare Investors, Inc.     8,179       259,683  
Sabra Health Care REIT, Inc.     20,030       292,438  
Total Health Care REITs             1,263,095  
                 
Hotel & Resort REITs (11.29%)                
Apple Hospitality REIT, Inc.     16,258       271,021  
Park Hotels & Resorts, Inc.     20,358       301,909  
Pebblebrook Hotel Trust(a)     17,683       225,458  
RLJ Lodging Trust     26,002       277,961  
Service Properties Trust     33,497       239,504  
Total Hotel & Resort REITs             1,315,853  
                 
Industrial REITs (10.69%)                
EastGroup Properties, Inc.     1,471       255,586  
Innovative Industrial Properties, Inc.     2,966       242,204  
LXP Industrial Trust     27,295       239,650  
Plymouth Industrial REIT, Inc.     11,546       251,125  
STAG Industrial, Inc.     7,181       257,439  
Total Industrial REITs             1,246,004  
                 
Multi-Family Residential REITs (8.29%)                
Apartment Income REIT Corp.     8,098       252,010  
BRT Apartments Corp.     14,451       263,008  
Centerspace     4,229       225,575  
Clipper Realty, Inc.     44,211       225,476  
Total Multi-Family Residential REITs             966,069  
                 
Office REITs (10.10%)                
Brandywine Realty Trust     52,946       236,139  
Hudson Pacific Properties, Inc.     36,422       213,797  
Office Properties Income Trust     44,582       248,768  
Piedmont Office Realty Trust, Inc., Class A     38,676       240,565  
SL Green Realty Corp.     6,500       237,705  
Total Office REITs             1,176,974  
                 
Retail REITs (11.74%)                
Alexander's, Inc.     1,329       244,483  

 

Security Description   Shares     Value  
Retail REITs (continued)                
CBL & Associates Properties, Inc.     12,196     $ 286,606  
Saul Centers, Inc.     6,998       258,576  
Simon Property Group, Inc.     2,289       285,873  
Spirit Realty Capital, Inc.     7,089       292,776  
Total Retail REITs             1,368,314  
                 
Self-Storage REITs (2.20%)                
National Storage Affiliates Trust     7,731       256,592  
                 
Single-Family Residential REITs (2.16%)                
UMH Properties, Inc.     17,842       251,929  
                 
Specialized REITs (11.65%)                
EPR Properties     5,940       265,043  
Four Corners Property Trust, Inc.     10,654       244,935  
Gaming and Leisure Properties, Inc.     5,357       250,333  
Outfront Media, Inc.     23,962       293,055  
Uniti Group, Inc.     55,053       304,443  
Total Specialized REITs             1,357,809  
                 
Technology REITs (5.07%)                
Crown Castle, Inc.     2,644       310,088  
Digital Realty Trust, Inc.     2,021       280,475  
Total Technology REITs             590,563  
                 
Telecom Tower REITs (2.60%)                
American Tower Corp.     1,453       303,357  
                 
TOTAL COMMON STOCKS                
(Cost $14,389,611)             11,612,899  

 

    7 Day Yield     Shares     Value  
SHORT TERM INVESTMENTS (0.19%)                        
Money Market Fund (0.19%)                        
State Street Institutional Treasury Plus Money Market Fund (Premier Class)     5.31 %     22,561       22,561  
                         
TOTAL SHORT TERM INVESTMENTS                        
                         
(Cost $22,561)                     22,561  
                         
TOTAL INVESTMENTS (99.82%)                        
(Cost $14,412,172)                   $ 11,635,460  
OTHER ASSETS IN EXCESS OF LIABILITIES (0.18%)                     20,892  
NET ASSETS - 100.00%                   $ 11,656,352  

  

(a) Security, or a portion of the security position is currently on loan. The total market value of securities on loan is $202,100.

 

See Notes to Financial Statements.

 

20 | November 30, 2023

 

 

ALPS ETF Trust

 

Statements of Assets and Liabilities November 30, 2023

 

    ALPS Sector
Dividend Dogs
ETF
    ALPS
International
Sector Dividend
Dogs ETF
    ALPS Emerging
Sector Dividend
Dogs ETF
    ALPS REIT
Dividend Dogs
ETF
 
ASSETS:                        
Investments, at value*   $ 1,091,441,316     $ 240,545,036     $ 30,144,918     $ 11,635,460  
Foreign currency, at value (Cost $–, $82,169, $38,322 and $–)           82,171       38,195        
Foreign tax reclaims           635,697       6,174       1,280  
Dividends receivable     6,461,408       794,893       120,279       22,812  
Receivable for investments sold     1,216,204       2,246,772       38,128        
Receivable for shares sold           1,440,309              
Total Assets     1,099,118,928       245,744,878       30,347,694       11,659,552  
                                 
LIABILITIES:                                
Payable for investments purchased     2,211,510       4,423,007       38,196        
Payable to adviser     311,326       92,871       14,644       3,200  
Payable for shares redeemed     1,217,946                    
Payable for collateral upon return of securities loaned           4,563,243       51,420        
Total Liabilities     3,740,782       9,079,121       104,260       3,200  
NET ASSETS   $ 1,095,378,146     $ 236,665,757     $ 30,243,434     $ 11,656,352  
                                 
NET ASSETS CONSIST OF:                                
Paid-in capital   $ 1,359,886,937     $ 282,926,866     $ 41,629,458     $ 23,713,932  
Total Distributable earnings/(accumulated losses)     (264,508,791 )     (46,261,109 )     (11,386,024 )     (12,057,580 )
NET ASSETS   $ 1,095,378,146     $ 236,665,757     $ 30,243,434     $ 11,656,352  
                                 
INVESTMENTS, AT COST   $ 1,182,880,806     $ 227,798,595     $ 31,386,276     $ 14,412,172  
                                 
PRICING OF SHARES:                                
Net Assets   $ 1,095,378,146     $ 236,665,757     $ 30,243,434     $ 11,656,352  
Shares of beneficial interest outstanding (Unlimited number of shares authorized, par value $0.01 per share)     22,484,141       8,250,000       1,450,000       325,000  
Net Asset Value, offering and redemption price per share   $ 48.72     $ 28.69     $ 20.86     $ 35.87  

 

* Includes $17,948,193, $4,383,058, $172,750, and $202,100 respectively of securities on loan.

 

See Notes to Financial Statements.

 

21 | November 30, 2023

 

 

ALPS ETF Trust

 

Statements of Operations For the Year Ended November 30, 2023

 

   

ALPS Sector

Dividend Dogs

ETF

   

ALPS

International

Sector Dividend

Dogs ETF

   

ALPS Emerging

Sector Dividend

Dogs ETF

   

ALPS REIT

Dividend Dogs

ETF

 
INVESTMENT INCOME:                        
Dividends*   $ 53,646,353     $ 11,492,366     $ 2,107,307     $ 683,898  
Securities Lending Income     857       11,672       2,040       942  
Total Investment Income     53,647,210       11,504,038       2,109,347       684,840  
                                 
EXPENSES:                                
Investment adviser fees     4,489,145       1,023,339       177,374       53,940  
Total Expenses     4,489,145       1,023,339       177,374       53,940  
NET INVESTMENT INCOME     49,158,065       10,480,699       1,931,973       630,900  
                                 
REALIZED AND UNREALIZED GAIN/(LOSS)                                
Net realized gain/(loss) on investments(a)     40,887,629       (3,440,498 )     (1,151,239 )     (3,144,755 )
Net realized loss on foreign currency transactions           (53,311 )     (29,954 )      
Total net realized gain/(loss)     40,887,629       (3,493,809 )     (1,181,193 )     (3,144,755 )
Net change in unrealized appreciation/(depreciation) on investments     (159,451,318 )     23,994,177       562,335       955,249  
Net change in unrealized appreciation/(depreciation) on translation of assets and liabilities denominated in foreign currencies           13,772       (1,120 )     56  
Total net change in unrealized appreciation/(depreciation)     (159,451,318 )     24,007,949       561,215       955,305  
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS     (118,563,689 )     20,514,140       (619,978 )     (2,189,450 )
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS   $ (69,405,624 )   $ 30,994,839     $ 1,311,995     $ (1,558,550 )
*Net of foreign tax withholding:   $     $ 1,711,805     $ 293,384     $  

 

(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.

 

22 | November 30, 2023

 

 

ALPS Sector Dividend Dogs ETF

 

Statements of Changes in Net Assets

 

   

For the

Year Ended

November 30, 2023

   

For the

Year Ended

November 30, 2022

 
OPERATIONS:            
Net investment income   $ 49,158,065     $ 47,106,686  
Net realized gain     40,887,629       79,831,594  
Net change in unrealized appreciation/(depreciation)     (159,451,318 )     (10,173,890 )
Net increase/(decrease) in net assets resulting from operations     (69,405,624 )     116,764,390  
                 
Net Equalization Credits/(Debits)     (2,391,020 )     1,492,734  
                 
DISTRIBUTIONS TO SHAREHOLDERS:                
From distributable earnings     (51,058,930 )     (46,839,426 )
Total distributions     (51,058,930 )     (46,839,426 )
                 
CAPITAL SHARE TRANSACTIONS:                
Proceeds from sale of shares     48,739,416       142,289,681  
Cost of shares redeemed     (135,465,114 )     (44,389,643 )
Net income equalization (Note 2)     2,391,020       (1,492,734 )
Net increase/(decrease) from share transactions     (84,334,678 )     96,407,304  
Net increase/(decrease) in net assets     (207,190,252 )     167,825,002  
                 
NET ASSETS:                
Beginning of year     1,302,568,398       1,134,743,396  
End of year   $ 1,095,378,146     $ 1,302,568,398  
                 
OTHER INFORMATION:                
CAPITAL SHARE TRANSACTIONS:                
Beginning shares     24,309,141       22,484,141  
Shares sold     950,000       2,700,000  
Shares redeemed     (2,775,000 )     (875,000 )
Shares outstanding, end of year     22,484,141       24,309,141  

 

See Notes to Financial Statements.

 

23 | November 30, 2023

 

 

ALPS International Sector Dividend Dogs ETF

 

Statements of Changes in Net Assets

 

   

For the

Year Ended

November 30, 2023

   

For the

Year Ended

November 30, 2022

 
OPERATIONS:            
Net investment income   $ 10,480,699     $ 7,271,405  
Net realized gain/(loss)     (3,493,809 )     12,053  
Net change in unrealized appreciation/(depreciation)     24,007,949       (5,804,169 )
Net increase in net assets resulting from operations     30,994,839       1,479,289  
                 
Net Equalization Credits     1,593,144       157,925  
                 
DISTRIBUTIONS TO SHAREHOLDERS:                
From distributable earnings     (10,066,812 )     (6,875,035 )
From tax return of capital           (104,515 )
Total distributions     (10,066,812 )     (6,979,550 )
                 
CAPITAL SHARE TRANSACTIONS:                
Proceeds from sale of shares     60,732,845       47,390,193  
Cost of shares redeemed     (14,945,757 )     (29,427,911 )
Net income equalization (Note 2)     (1,593,144 )     (157,925 )
Net increase from share transactions     44,193,944       17,804,357  
Net increase in net assets     66,715,115       12,462,021  
                 
NET ASSETS:                
Beginning of year     169,950,642       157,488,621  
End of year   $ 236,665,757     $ 169,950,642  
                 
OTHER INFORMATION:                
CAPITAL SHARE TRANSACTIONS:                
Beginning shares     6,575,000       5,950,000  
Shares sold     2,225,000       1,775,000  
Shares redeemed     (550,000 )     (1,150,000 )
Shares outstanding, end of year     8,250,000       6,575,000  

 

See Notes to Financial Statements.

 

24 | November 30, 2023

 

 

ALPS Emerging Sector Dividend Dogs ETF

Statements of Changes in Net Assets

 

    For the Year Ended November 30, 2023     For the Year Ended November 30, 2022  
OPERATIONS:            
Net investment income   $ 1,931,973     $ 1,344,781  
Net realized loss     (1,181,193 )     (97,520 )
Net change in unrealized appreciation/(depreciation)     561,215       (2,290,146 )
Net increase/(decrease) in net assets resulting from operations     1,311,995       (1,042,885 )
                 
Net Equalization Credits/(Debits)     (7,348 )     69,251  
                 
DISTRIBUTIONS TO SHAREHOLDERS:                
From distributable earnings     (1,969,818 )     (1,199,258 )
Total distributions     (1,969,818 )     (1,199,258 )
                 
CAPITAL SHARE TRANSACTIONS:                
Proceeds from sale of shares     3,780,259       8,949,252  
Cost of shares redeemed     (1,060,988 )     (3,266,629 )
Net income equalization (Note 2)     7,348       (69,251 )
Net increase from share transactions     2,726,619       5,613,372  
Net increase in net assets     2,061,448       3,440,480  
                 
NET ASSETS:                
Beginning of year     28,181,986       24,741,506  
End of year   $ 30,243,434     $ 28,181,986  
                 
OTHER INFORMATION:                
CAPITAL SHARE TRANSACTIONS:                
Beginning shares     1,325,000       1,050,000  
Shares sold     175,000       450,000  
Shares redeemed     (50,000 )     (175,000 )
Shares outstanding, end of year     1,450,000       1,325,000  

 

See Notes to Financial Statements.

 

25 | November 30, 2023

 

 

ALPS REIT Dividend Dogs ETF

 

Statements of Changes in Net Assets

 

    For the Year Ended November 30, 2023     For the Year Ended November 30, 2022  
OPERATIONS:            
Net investment income   $ 630,900     $ 801,823  
Net realized gain/(loss)     (3,144,755 )     3,120,128  
Net change in unrealized appreciation/(depreciation)     955,305       (7,304,705 )
Net decrease in net assets resulting from operations     (1,558,550 )     (3,382,754 )
                 
DISTRIBUTIONS TO SHAREHOLDERS:                
From distributable earnings     (651,314 )     (825,395 )
From tax return of capital     (442,862 )     (282,853 )
Total distributions     (1,094,176 )     (1,108,248 )
                 
CAPITAL SHARE TRANSACTIONS:                
Cost of shares redeemed     (6,444,564 )     (3,444,778 )
Net decrease from share transactions     (6,444,564 )     (3,444,778 )
Net decrease in net assets     (9,097,290 )     (7,935,780 )
                 
NET ASSETS:                
Beginning of year     20,753,642       28,689,422  
End of year   $ 11,656,352     $ 20,753,642  
                 
OTHER INFORMATION:                
CAPITAL SHARE TRANSACTIONS:                
Beginning shares     500,000       575,000  
Shares sold            
Shares redeemed     (175,000 )     (75,000 )
Shares outstanding, end of year     325,000       500,000  

 

See Notes to Financial Statements.

 

26 | November 30, 2023

 

 

ALPS Sector Dividend Dogs ETF

 

Financial Highlights For a Share Outstanding Throughout the Periods Presented

  

    For the Year
Ended
November 30,
2023
    For the Year
Ended
November 30,
2022
    For the Year
Ended
November 30,
2021
    For the Year
Ended
November 30,
2020
    For the Year
Ended
November 30,
2019
 
NET ASSET VALUE, BEGINNING OF PERIOD   $ 53.58     $ 50.47     $ 43.69     $ 45.78     $ 44.26  
                                         
INCOME/(LOSS) FROM INVESTMENT OPERATIONS:                                        
Net investment income (a)     2.06       2.02       1.75       1.70       1.71  
Net realized and unrealized gain/(loss)     (4.79 )     3.11       6.84       (2.14 )     1.34  
Total from investment operations     (2.73 )     5.13       8.59       (0.44 )     3.05  
                                         
DISTRIBUTIONS:                                        
From net investment income     (2.13 )     (2.02 )     (1.81 )     (1.65 )     (1.53 )
Total distributions     (2.13 )     (2.02 )     (1.81 )     (1.65 )     (1.53 )
                                         
Net increase/(decrease) in net asset value     (4.86 )     3.11       6.78       (2.09 )     1.52  
NET ASSET VALUE, END OF PERIOD   $ 48.72     $ 53.58     $ 50.47     $ 43.69     $ 45.78  
TOTAL RETURN(b)     (5.07 )%     10.42 %     19.77 %     (0.27 )%     7.26 %
                                         
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000s)   $ 1,095,378     $ 1,302,568     $ 1,134,743     $ 1,007,514     $ 1,746,784  
                                         
Ratio of expenses to average net assets     0.37 %(c)     0.40 %     0.40 %     0.40 %     0.40 %
Ratio of net investment income to average net assets     4.10 %     3.84 %     3.43 %     4.27 %     3.97 %
Portfolio turnover rate(d)     51 %     53 %     54 %     77 %     55 %
Undistributed net investment income included in price of units issued and redeemed(a)(e)   $ (0.10 )   $ 0.06     $ (0.02 )   $ 0.12     $ 0.06  

 

(a) Based on average shares outstanding during the period.
(b) Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period and redemption at the net asset value on the last day of the period and assuming all distributions are reinvested at reinvestment prices. Total return calculated for a period of less than one year is not annualized.
(c) Effective April 1, 2023 the Advisory Fee changed from 0.40% to 0.36%.
(d) Portfolio turnover for periods less than one year is not annualized and does not include securities received or delivered from processing creations or redemptions in-kind.
(e) The per share amount of equalization is presented to show the impact of equalization on distributable earnings per share.

 

See Notes to Financial Statements.

 

27 | November 30, 2023

 

 

 

ALPS International Sector Dividend Dogs ETF

 

Financial Highlights For a Share Outstanding Throughout the Periods Presented

 

   

For the
Year
Ended
November 30,

2023

    For the
Year
Ended
November 30,
2022
    For the
Year
Ended
November 30,
2021
    For the
Year
Ended
November 30,
2020
    For the
Year
Ended
November 30,
2019
 
NET ASSET VALUE, BEGINNING OF PERIOD   $ 25.85     $ 26.47     $ 24.82     $ 26.88     $ 25.14  
                                         
INCOME/(LOSS) FROM INVESTMENT OPERATIONS:                                        
Net investment income(a)     1.41       1.15       1.09       0.75       1.20  
Net realized and unrealized gain/(loss)     2.80       (0.68 )     1.65       (1.66 )     1.69  
Total from investment operations     4.21       0.47       2.74       (0.91 )     2.89  
                                         
DISTRIBUTIONS:                                        
From net investment income     (1.37 )     (1.07 )     (1.08 )     (1.11 )     (1.15 )
Tax return of capital           (0.02 )     (0.01 )     (0.04 )      
Total distributions     (1.37 )     (1.09 )     (1.09 )     (1.15 )     (1.15 )
                                         
Net increase/(decrease) in net asset value     2.84       (0.62 )     1.65       (2.06 )     1.74  
NET ASSET VALUE, END OF PERIOD   $ 28.69     $ 25.85     $ 26.47     $ 24.82     $ 26.88  
TOTAL RETURN(b)     16.71 %     1.92 %     10.93 %     (3.08 )%     11.79 %
                                         
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000s)   $ 236,666     $ 169,951     $ 157,489     $ 146,431     $ 221,741  
                                         
Ratio of expenses to average net assets     0.50 %     0.50 %     0.50 %     0.50 %     0.50 %
Ratio of net investment income to average net assets     5.12 %     4.43 %     3.92 %     3.22 %     4.65 %
Portfolio turnover rate(c)     62 %     54 %     61 %     79 %     58 %
Undistributed net investment income included in price of units issued and redeemed(a)(d)   $ 0.21     $ 0.03     $ (0.25 )   $ 0.00 (e)   $ 0.04  

 

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

(e) Less than $0.005.

 

See Notes to Financial Statements.

 

28 | November 30, 2023

 

 

ALPS Emerging Sector Dividend Dogs ETF

 

Financial Highlights For a Share Outstanding Throughout the Periods Presented

 

    For the
Year Ended
November 30,
2023
    For the
Year Ended
November 30,
2022
    For the
Year Ended
November 30,
2021
    For the
Year Ended
November 30,
2020
    For the
Year Ended
November 30,
2019
 
NET ASSET VALUE, BEGINNING OF PERIOD   $ 21.27     $ 23.56     $ 20.96     $ 20.67     $ 21.33  
                                         
INCOME/(LOSS) FROM INVESTMENT OPERATIONS:                                        
Net investment income(a)     1.39       1.11       1.04       0.56       0.89  
Net realized and unrealized gain/(loss)     (0.39 )     (2.41 )     2.50       0.42       (0.33 )
Total from investment operations     1.00       (1.30 )     3.54       0.98       0.56  
                                         
DISTRIBUTIONS:                                        
From net investment income     (1.41 )     (0.99 )     (0.94 )     (0.69 )     (1.22 )
Total distributions     (1.41 )     (0.99 )     (0.94 )     (0.69 )     (1.22 )
                                         
Net increase/(decrease) in net asset value     (0.41 )     (2.29 )     2.60       0.29       (0.66 )
NET ASSET VALUE, END OF PERIOD   $ 20.86     $ 21.27     $ 23.56     $ 20.96     $ 20.67  
TOTAL RETURN(b)     4.88 %     (5.20 )%     16.81 %     5.20 %     2.67 %
                                         
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000s)   $ 30,243     $ 28,182     $ 24,742     $ 20,958     $ 28,941  
                                         
Ratio of expenses to average net assets     0.60 %     0.60 %     0.60 %     0.60 %     0.60 %
Ratio of net investment income to average net assets     6.54 %     5.17 %     4.32 %     2.92 %     4.16 %
Portfolio turnover rate(c)     85 %     90 %     84 %     93 %     83 %
Undistributed net investment income included in price of units issued and redeemed(a)(d)   $ (0.01 )   $ 0.06     $ 0.02     $ 0.02     $ 0.01  

 

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

 

See Notes to Financial Statements.

 

29 | November 30, 2023

 

 

ALPS REIT Dividend Dogs ETF

 

Financial Highlights For a Share Outstanding Throughout the Periods Presented

 

   

For the Year

Ended

November 30,

2023

   

For the Year

Ended

November 30,

2022

   

For the Year

Ended

November 30,

2021

   

For the Year

Ended

November 30,

2020 (a)

   

For the Year

Ended

November 30,

2019

 
NET ASSET VALUE, BEGINNING OF PERIOD   $ 41.51     $ 49.89     $ 40.49     $ 48.42     $ 44.18  
                                         
INCOME/(LOSS) FROM INVESTMENT OPERATIONS:                                        
Net investment income (b)     1.51       1.49       1.21       1.29       1.19  
Net realized and unrealized gain/(loss)     (4.62 )     (7.86 )     10.25       (7.26 )     4.45  
Total from investment operations     (3.11 )     (6.37 )     11.46       (5.97 )     5.64  
                                         
DISTRIBUTIONS:                                        
From net investment income     (1.46 )     (1.51 )     (1.36 )     (1.57 )     (1.40 )
Tax return of capital     (1.07 )     (0.50 )     (0.70 )     (0.39 )      
Total distributions     (2.53 )     (2.01 )     (2.06 )     (1.96 )     (1.40 )
                                         
Net increase/(decrease) in net asset value     (5.64 )     (8.38 )     9.40       (7.93 )     4.24  
NET ASSET VALUE, END OF PERIOD   $ 35.87     $ 41.51     $ 49.89     $ 40.49     $ 48.42  
TOTAL RETURN(c)     (7.16 )%     (13.06 )%     29.03 %     (11.77 )%     13.00 %
                                         
RATIOS/SUPPLEMENTAL DATA:                                        
Net assets, end of period (000s)   $ 11,656     $ 20,754     $ 28,689     $ 26,320     $ 53,265  
                                         
Ratio of expenses to average net assets     0.35 %     0.35 %     0.35 %     0.38 %(d)     0.55 %
Ratio of net investment income to average net assets     4.09 %     3.23 %     2.60 %     3.26 %     2.56 %
Portfolio turnover rate(e)     89 %     85 %     78 %     148 %     10 %

  

(a) Prior to January 2, 2020, the ALPS REIT Dividend Dogs ETF was known as the Cohen & Steers Global Realty Majors ETF.
(b) Based on average shares outstanding during the period.
(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 reinvestment prices. Total return calculated for a period of less than one year is not annualized.
(d) Effective January 2, 2020 the Fund's Advisory Fee changed from 0.55% to 0.35%.
(e) Portfolio turnover for periods less than one year is not annualized and does not include securities received or delivered from processing creations or redemptions in-kind.

 

See Notes to Financial Statements.

 

30 | November 30, 2023

 

 

ALPS ETF Trust

 

Notes to Financial Statements November 30, 2023

 

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 November 30, 2023, the Trust consisted of twenty-three separate portfolios. Each portfolio represents a separate series of the Trust. This report pertains to the ALPS Sector Dividend Dogs ETF, the ALPS International Sector Dividend Dogs ETF, the ALPS Emerging Sector Dividend Dogs ETF, and the ALPS REIT Dividend Dogs ETF (each a “Fund” and collectively, the “Funds”).

 

The investment objective of the ALPS Sector Dividend Dogs ETF is to seek investment results that replicate as closely as possible, before fees and expenses, the performance of the S-Network® Sector Dividend Dogs Index. The investment objective of the ALPS International Sector Dividend Dogs ETF is to seek investment results that replicate as closely as possible, before fees and expenses, the performance of the S-Network® International Sector Dividend Dogs Index. The investment objective of the ALPS Emerging Sector Dividend Dogs ETF is to seek investment results that replicate as closely as possible, before fees and expenses, the performance of the S-Network® Emerging Sector Dividend Dogs Index. The investment objective of the ALPS REIT Dividend Dogs ETF is to seek investment results that replicate as closely as possible, before fees and expenses, the performance of the S-Network® REIT Dividend Dogs Index. Each Fund has elected to qualify as a diversified series of the Trust under the 1940 Act.

 

Each Fund’s Shares (“Shares”) are listed on the NYSE Arca, Inc. (the “NYSE Arca”). 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 (“NYSE”), normally 4:00 p.m. Eastern time, on each day the NYSE is open for trading. The NAV is computed by dividing the value of all assets of the Fund (including accrued interest and dividends), less all liabilities (including accrued expenses and dividends declared but unpaid), by the total number of shares outstanding.

 

Portfolio securities listed on any exchange other than the NASDAQ Stock Market LLC (“NASDAQ”) are valued at the last sale price on the business day as of which such value is being determined. If there has been no sale on such day, the securities are valued at the mean of the most recent bid and ask prices on such day. Securities traded on the NASDAQ are valued at the NASDAQ Official Closing Price as determined by NASDAQ. Portfolio securities traded on more than one securities exchange are valued at the last sale price on the business day as of which such value is being determined at the close of the exchange representing the principal market for such securities. Portfolio securities traded in the over-the-counter market, but excluding securities traded on the NASDAQ, are valued at the 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”). Pursuant to Rule 2a-5 under the 1940 Act, the Board designated ALPS Advisors, Inc. (the "Adviser") as the valuation designee ("Valuation Designee") for each Fund to perform the fair value determinations relating to Fund investments. The Adviser may carry out its designated responsibilities as Valuation Designee through various teams and committees. 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 the Valuation Designee. These securities generally include, but are not limited to, restricted securities (securities which may not be publicly sold without registration under the Securities Act of 1933) for which a pricing service is unable to provide a market price; securities whose trading has been formally suspended; a security whose market price is not available from a pre-established primary pricing source or the pricing source is not willing to provide a price; a security with respect to which an event has occurred that is most likely to materially affect the value of the security after the market has closed but before the calculation of the Fund’s NAV or make it difficult or impossible to obtain a reliable market quotation; or a security whose price, as provided by the pricing service, does not reflect the security’s “fair value” due to the security being de-listed from a national exchange or the security’s primary trading market is temporarily closed at a time when, under normal conditions, it would be open. As a general principle, the current “fair value” of a security would be the amount which the owner might reasonably expect to receive from the sale on the applicable exchange or principal market. A variety of factors may be considered in determining the fair value of such securities.

 

31 | November 30, 2023

 

 

ALPS ETF Trust

 

Notes to Financial Statements November 30, 2023

 

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 assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and
Level 3 Significant unobservable prices or inputs (including the Fund’s own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date.

 

32 | November 30, 2023

 

 

ALPS ETF Trust

 

Notes to Financial Statements November 30, 2023

 

The following is a summary of the inputs used to value the Funds’ investments as of November 30, 2023:

 

ALPS Sector Dividend Dogs ETF

 

Investments in Securities at Value  

Level 1 - Quoted and

Unadjusted Prices

   

Level 2 - Other Significant

Observable Inputs

   

Level 3 – Significant

Unobservable Inputs

    Total  
Common Stocks*   $ 1,089,681,748     $    –     $     $ 1,089,681,748  
Short Term Investments     1,759,568                   1,759,568  
Total   $ 1,091,441,316     $     $     $ 1,091,441,316  

 

ALPS International Sector Dividend Dogs ETF

 

Investments in Securities at Value  

Level 1 - Quoted and

Unadjusted Prices

   

Level 2 - Other Significant

Observable Inputs

   

Level 3 – Significant

Unobservable Inputs

    Total  
Common Stocks*   $ 235,508,752     $     $     $ 235,508,752  
Short Term Investments     5,036,284                   5,036,284  
Total   $ 240,545,036     $     $     $ 240,545,036  

 

ALPS Emerging Sector Dividend Dogs ETF

 

Investments in Securities at Value  

Level 1 - Quoted and

Unadjusted Prices

   

Level 2 - Other Significant

Observable Inputs

   

Level 3 – Significant

Unobservable Inputs

    Total  
Common Stocks*                                
Russia   $     $     $ 1,233     $ 1,233  
Other*   $ 30,046,060                 $ 30,046,060  
Short Term Investments     97,625                   97,625  
Total   $ 30,143,685     $     $ 1,233     $ 30,144,918  

 

ALPS REIT Dividend Dogs ETF

 

Investments in Securities at Value  

Level 1 - Quoted and

Unadjusted Prices

   

Level 2 - Other Significant

Observable Inputs

   

Level 3 – Significant

Unobservable Inputs

    Total  
Common Stocks*   $ 11,612,899     $     $     $ 11,612,899  
Short Term Investments     22,561                   22,561  
Total   $ 11,635,460     $     $     $ 11,635,460  

 

* For a detailed sector/country breakdown, see the accompanying Schedules of Investments.

 

The Funds, except for the ALPS Emerging Sector Dividend Dogs ETF, did not have any securities that used significant unobservable inputs (Level 3) in determining fair value and there were no transfers into or out of Level 3 during the year ended November 30, 2023. The Adviser has determined that the value of Level 3 securities is not material; therefore, a reconciliation of assets of the ALPS Emerging Sector Dividend Dogs ETF for Level 3 investments for which significant unobservable inputs were used to determine fair value is not presented for the year ended November 30, 2023.

 

C. Foreign Securities

The ALPS International Sector Dividend Dogs ETF, the ALPS Emerging Sector Dividend Dogs ETF, and the ALPS REIT Dividend Dogs ETF may directly purchase securities of foreign issuers. Investments in non-U.S. issuers may involve unique risks compared to investing in securities of U.S. issuers, including, among others, less liquidity generally, greater market volatility than U.S. securities and less complete financial information than for U.S. issuers. In addition, adverse political, economic or social developments could undermine the value of the Fund’s investments or prevent the Fund from realizing the full value of its investments. Financial reporting standards for companies based in foreign markets differ from those in the United States. Finally, the value of the currency of the country in which the Fund has invested could decline relative to the value of the U.S. dollar, which may affect the value of the investment to U.S. investors.

 

Because foreign markets may be open on different days than the days during which investors may purchase the shares of each Fund, the value of each Fund's securities may change on the days when investors are not able to purchase the shares of the Funds. The value of securities denominated in foreign currencies is converted into U.S. dollars using exchange rates determined daily as of the close of regular trading on the NYSE or NASDAQ. Any use of a different rate from the rates used by the Index may adversely affect a Fund's ability to track its Index.

 

33 | November 30, 2023

 

 

ALPS ETF Trust

 

Notes to Financial Statements November 30, 2023

 

D. Foreign Currency Translation

The books and records of the Funds are maintained in U.S. dollars. Investment valuations and other assets and liabilities initially expressed in foreign currencies are converted each business day into U.S. dollars based upon current exchange rates. The portion of realized and unrealized gains or losses on investments due to fluctuations in foreign currency exchange rates is not separately disclosed and is included in realized and unrealized gains or losses on investments, when applicable.

 

E. Securities Transactions and Investment Income

Securities transactions are recorded as of the trade date. Realized gains and losses from securities transactions are recorded on the specific identification in accordance with GAAP. Dividend income and capital gains distributions, if any, are recorded on the ex-dividend date, net of any foreign taxes withheld. Interest income, if any, is recorded on the accrual basis, including any amortization of premiums and accretion of discounts. Income received from foreign sources may result in withholding tax. Withholding taxes are accrued at the same time as the related income if the tax rate is fixed and known, unless a tax withheld is reclaimable from the local tax authorities in which case it is recorded as receivable. If the tax rate is not known or estimable, such expense or reclaim receivable is recorded when the net proceeds are received.

 

F. Dividends and Distributions to Shareholders

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

 

G. Equalization

The ALPS Sector Dividend Dogs ETF, the ALPS International Sector Dividend Dogs ETF, and the ALPS Emerging Sector Dividend Dogs ETF utilize the accounting practice known as “Equalization” by which a portion of the proceeds from sales and costs of reacquiring the Funds’ shares, equivalent on a per share basis to the amount of distributable net investment income on the date of the transaction, is credited or charged to undistributed net investment income. As a result, undistributed net investment income per share is unaffected by sales or reacquisitions of the Funds’ shares. Amounts related to Equalization can be found on the Statements of Changes in Net Assets.

 

H. Foreign Taxes

The ALPS International Sector Dividend Dogs ETF, the ALPS Emerging Sector Dividend Dogs ETF, and the ALPS REIT Dividend Dogs ETF may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, foreign currency exchanges and capital gains on investments. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the Funds invest. These foreign taxes, if any, are paid by these Funds and are disclosed in each Fund’s Statement of Operations. Foreign taxes accrued as of November 30, 2023, if any, are reflected in each Fund’s Statement of Assets and Liabilities.

 

I. Real Estate Investment Trusts (“REITs”)

As part of its investments in real estate related securities, the ALPS REIT Dividend Dogs ETF (“RDOG”) will invest in REITs and is subject to certain risks associated with direct investment in REITs. REITs possess certain risks which differ from an investment in common stocks. REITs are financial vehicles that pool investors’ capital to acquire, develop and/or finance real estate and provide services to their tenants. REITs may concentrate their investments in specific geographic areas or in specific property types, e.g., regional malls, shopping centers, office buildings, apartment buildings and industrial warehouses. REITs may be affected by changes in the value of their underlying properties and by defaults by borrowers or tenants. REITs depend generally on their ability to generate cash flow to make distributions to shareowners, and certain REITs have self-liquidation provisions by which mortgages held may be paid in full and distributions of capital returns may be made at any time.

 

As REITs generally pay a higher rate of dividends than most other operating companies, to the extent application of RDOG’s investment strategy results in RDOG investing in REIT shares, the percentage of RDOG’s dividend income received from REIT shares will likely exceed the percentage of RDOG’s portfolio that is comprised of REIT shares. Distributions received by RDOG from REITs may consist of dividends, capital gains and/or return of capital.

 

Dividend income from REITs is recognized on the ex-dividend date. The calendar year-end amounts of ordinary income, capital gains, and return of capital included in distributions received from RDOG’s investments in REITs are reported to RDOG after the end of the calendar year; accordingly, RDOG estimates these amounts for accounting purposes until the characterization of REIT distributions is reported to RDOG after the end of the calendar year. Estimates are based on the most recent REIT distribution information available.

 

The performance of a REIT may be affected by its failure to qualify for tax-free pass-through of income under the Internal Revenue Code of 1986, as amended (the “Code”), or its failure to maintain exemption from registration under the 1940 Act. Due to RDOG’s investments in REITs, RDOG may also make distributions in excess of RDOG’s earnings and capital gains. Distributions, if any, in excess of RDOG’s earnings and profits will first reduce the adjusted tax basis of a holder’s shares and, after that basis has been reduced to zero, will constitute capital gains to the shareholder.

 

34 | November 30, 2023

 

 

ALPS ETF Trust

 

Notes to Financial Statements November 30, 2023

 

J. Federal Tax and Tax Basis Information

The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. GAAP. Reclassifications are made to the Funds’ capital accounts for permanent tax differences to reflect income and gains available for distribution (or available capital loss carryforwards) under income tax regulations.

 

For the year ended November 30, 2023, the following reclassifications, which had no impact on results of operations or net assets, were recorded to reflect permanent tax differences resulting primarily from in-kind transactions and prior year tax return true-ups:

 

Fund   Paid-in Capital     Total Distributable Earnings  
ALPS Sector Dividend Dogs ETF   $ 8,453,870     $ (8,453,870 )
ALPS International Sector Dividend Dogs ETF     1,589,245       (1,589,245 )
ALPS Emerging Sector Dividend Dogs ETF     155,716       (155,716 )
ALPS REIT Dividend Dogs ETF     (404,750 )     404,750  

 

The tax character of distributions paid during the fiscal years ended November 30, 2023 and November 30, 2022 was as follows:

 

Fund   Ordinary Income     Return of Capital  
November 30, 2023            
ALPS Sector Dividend Dogs ETF   $ 51,058,930     $  
ALPS International Sector Dividend Dogs ETF     10,066,812        
ALPS Emerging Sector Dividend Dogs ETF     1,969,818        
ALPS REIT Dividend Dogs ETF     651,314       442,862  
                 
Fund   Ordinary Income     Return of Capital  
November 30, 2022                
ALPS Sector Dividend Dogs ETF   $ 46,839,426     $  
ALPS International Sector Dividend Dogs ETF     6,875,035       104,515  
ALPS Emerging Sector Dividend Dogs ETF     1,199,258        
ALPS REIT Dividend Dogs ETF     825,395       282,853  

 

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

 

Under current law, capital losses maintain their character as short-term or long-term and are carried forward to the next tax year without expiration. As of November 30, 2023, the following amounts are available as carry forwards to the next tax year:

 

Fund   Short-Term     Long-Term  
ALPS Sector Dividend Dogs ETF   $     $ 168,036,590  
ALPS International Sector Dividend Dogs ETF     6,656,571       51,316,726  
ALPS Emerging Sector Dividend Dogs ETF     1,215,909       8,786,761  
ALPS REIT Dividend Dogs ETF     7,002,786       2,117,277  

 

The ALPS Sector Dividend Dogs ETF used capital loss carryovers during the year ended November 30, 2023 in the amount of $32,556,612.

 

35 | November 30, 2023

 

 

ALPS ETF Trust

 

Notes to Financial Statements November 30, 2023

 

As of November 30, 2023, the components of distributable earnings on a tax basis for each Fund were as follows:

 

   

Undistributed net

investment income

   

 

Accumulated net

realized loss on

investments

   

Net unrealized

appreciation/

(depreciation) on

investments

    Total  
ALPS Sector Dividend Dogs ETF   $ 2,742,205     $ (168,036,590 )   $ (99,214,406 )   $ (264,508,791 )
ALPS International Sector Dividend Dogs ETF     1,377,587       (57,973,297 )     10,334,601       (46,261,109 )
ALPS Emerging Sector Dividend Dogs ETF     160,800       (10,002,670 )     (1,544,154 )     (11,386,024 )
ALPS REIT Dividend Dogs ETF           (9,120,063 )     (2,937,517 )     (12,057,580 )

 

As of November 30, 2023, the cost of investments for federal income tax purposes and accumulated net unrealized appreciation/(depreciation) on investments were as follows:

 

   

 

Gross Appreciation

(excess of value

over tax cost)

   

Gross

Depreciation

(excess of tax

cost over value)

   

 Net Appreciation/

(Depreciation) of

Foreign Currency

   

Net Unrealized

Appreciation/

(Depreciation)

   

Cost of

Investments for

Income Tax

Purposes

 
ALPS Sector Dividend Dogs ETF   $ 90,744,212     $ (189,958,618 )   $     $ (99,214,406 )   $ 1,190,655,722  
ALPS International Sector Dividend Dogs ETF     25,925,876       (15,613,893 )     22,618       10,334,601       230,233,053  
ALPS Emerging Sector Dividend Dogs ETF     3,094,402       (4,638,954 )     398       (1,544,154 )     31,689,470  
ALPS REIT Dividend Dogs ETF     549,714       (3,487,185 )     (46 )     (2,937,517 )     14,572,931  

 

The differences between book-basis and tax-basis are primarily due to the deferral of losses from wash sales and investments in passive foreign investment companies.

 

K. Income Taxes

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

 

As of and during the year ended November 30, 2023, each Fund did not have a liability for any unrecognized tax benefits. Each Fund files U.S. federal, state, and local tax returns as required. Each Fund’s tax returns are subject to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return, but may extend to four years in certain jurisdictions. Each Fund’s tax returns for open years have incorporated no uncertain tax positions that require a provision for income taxes.

 

L. Lending of Portfolio Securities

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

 

36 | November 30, 2023

 

 

ALPS ETF Trust

 

Notes to Financial Statements November 30, 2023

 

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

 

The following is a summary of a Fund's securities lending agreement and related cash and non-cash collateral received as of November 30, 2023:

 

 

Fund

 

Market Value of

Securities on Loan

   

Cash Collateral

Received

   

Non-Cash Collateral

Received

   

Total Collateral

Received

 
ALPS Sector Dividend Dogs ETF   $ 17,948,193     $     $ 18,343,890     $ 18,343,890  
ALPS International Sector Dividend Dogs ETF     4,383,058       4,563,243             4,563,243  
ALPS Emerging Sector Dividend Dogs ETF     172,750       51,420       129,963       181,383  
ALPS REIT Dividend Dogs ETF     202,100             205,819       205,819  

 

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

 

The following table reflects a breakdown of transactions accounted for as secured borrowings, the gross obligation by the type of collateral pledged or securities loaned, and the remaining contractual maturity of those transactions as of November 30, 2023:

 

ALPS International Sector Dividend Dogs ETF   Remaining contractual maturity of the agreements
     
Securities Lending Transactions  

Overnight &

Continuous

    Up to 30 Days     30-90 Days    

Greater

than 90 Days

    Total  
Common Stocks   $ 4,563,243     $     $     $     $ 4,563,243  
Total Borrowings                                     4,563,243  
Gross amount of recognized liabilities for securities lending (collateral received)             $ 4,563,243  

 

 

ALPS Emerging Sector Dividend Dogs ETF   Remaining contractual maturity of the agreements  
       
Securities Lending Transactions  

Overnight &

Continuous

    Up to 30 Days     30-90 Days    

Greater

than 90 Days

    Total  
Common Stocks   $ 51,420     $     $     $     $ 51,420