ck0001742912-20201214
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SPRE |
SP
Funds S&P Global REIT Sharia ETF |
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listed
on NYSE Arca, Inc. |
PROSPECTUS
December 27,
2020
Beginning
on January 1, 2021, as permitted by regulations adopted by the U.S. Securities
and Exchange Commission (the “SEC”), paper copies of the SP Funds S&P Global
REIT Sharia ETF’s (the “Fund”) annual and semi-annual shareholder reports will
no longer be sent by mail, unless you specifically request paper copies of Fund
shareholder reports from your financial intermediary, such as a broker-dealer or
bank. Instead, the shareholder reports will be made available on the Fund’s
website at www.sp-funds.com, and you will be notified by mail each time a report
is posted and provided with a website link to access the report.
If
you have already elected to receive shareholder reports electronically, you will
not be affected by this change and you need not take any action. Please contact
your financial intermediary to elect to receive shareholder reports and other
Fund communications electronically.
You
may elect to receive all future Fund reports in paper free of charge. Please
contact your financial intermediary to inform them that you wish to continue
receiving paper copies of Fund shareholder reports and for details about whether
your election to receive reports in paper will apply to all funds held with your
financial intermediary.
The
SEC has not approved or disapproved of these securities or passed upon the
accuracy or adequacy of this Prospectus. Any representation to the contrary is a
criminal offense.
Investment Objective
The SP Funds S&P Global
REIT Sharia ETF (the “Fund”) seeks to track the performance, before fees and
expenses, of the S&P Global All Equity REIT Shariah Capped Index (the
“Index” or the “Shariah REIT Index”).
Fees and Expenses of the
Fund
This table describes the fees
and expenses that you may pay if you buy, hold, and sell shares of the Fund
(“Shares”). You may pay other fees, such as
brokerage commissions and other fees to financial intermediaries, which are not
reflected in the table and example
below.
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Annual
Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment) |
Management
Fees |
0.69% |
Distribution
and/or Service (12b-1) Fees |
0.00% |
Other
Expenses1 |
0.00% |
Total
Annual Fund Operating Expenses |
0.69% |
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1
Estimated for the current
fiscal year.
Expense Example
This Example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other funds. The Example assumes that you invest $10,000 in the
Fund for the time periods indicated and then redeem all of your Shares at the
end of those periods. The Example also assumes that your investment has a 5%
return each year and that the Fund’s operating expenses remain the same. The
Example does not take into account brokerage commissions that you may pay on
your purchases and sales of Shares. Although your actual costs may be higher
or lower, based on these assumptions your costs would
be:
Portfolio
Turnover
The Fund pays transaction
costs, such as commissions, when it buys and sells securities (or “turns over”
its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Shares are held in a taxable account.
These costs, which are not reflected in total annual fund operating expenses or
in the expense example above, affect the Fund’s performance. Because the Fund is
newly organized, portfolio turnover information is not yet
available.
Principal Investment
Strategies
The
Fund uses a “passive management” (or indexing) approach to track the
performance, before fees and expenses, of the Index.
The
Index includes all real estate investment trust (“REIT”) securities listed in
developed and emerging markets and included as constituents of the S&P
Global BMI Shariah Index, a comprehensive global Sharia-compliant index of
publicly-traded equity securities. Constituents included in the S&P Global
BMI Shariah Index must have a float-adjusted market capitalization of at least
$100 million and an annual trading value of at least $50 million. A REIT is a
security of a company that invests in real estate, either through real estate
property, mortgages and similar real estate investments, or all of the
foregoing. Islamic religious law commonly known as Sharia has certain
restrictions regarding finance and commercial activities permitted for Muslims,
including interest restrictions and prohibited industries. Constituents of the
S&P Global BMI Shariah Index, and therefore constituents of the Index, have
been screened for non-compliant business activities (companies that offer
products and services that are not compliant with Sharia law such as gambling,
alcohol, or tobacco) and compliance with certain accounting-based financial
ratios (companies must satisfy financial ratios governing leverage, cash, and
the share of revenues derived from non-compliant activities).
The
Index is rebalanced and reconstituted monthly. Each security in the Index is
subject to certain individual security weight caps. As of November 30, 2020, the
Index was composed of 35 constituents, representing investments in 10
countries.
The
Index was developed in 2020 by S&P Dow Jones Indices LLC (the “Index
Provider”), a division of S&P Global, with active contribution by
ShariaPortfolio, Inc. (the “Sub-Adviser”), the Fund’s sub-adviser. The Index is
owned and administered by the Index Provider. The S&P Global BMI Shariah
Index was developed in 2008 by the Index Provider and is owned and administered
by the Index Provider.
The
Fund’s Investment Strategy
The
Fund attempts to invest all, or substantially all, of its assets in the
component securities that make up the Index. Under normal circumstances, at
least 80% of the Fund’s total assets will be invested in the component
securities of the Index. This policy may be changed without shareholder approval
upon 60 days’ written notice to shareholders. The Fund’s investment adviser
expects that, over time, the correlation between the Fund’s performance and that
of the Index, before fees and expenses, will be 95% or better.
The
Fund generally may invest up to 20% of its total assets in Sharia-compliant
securities or other Sharia-compliant investments not included in the Index, but
which the Sub-Adviser believes will help the Fund track the Index. For example,
the Fund may invest in Sharia-compliant securities that are not components of
the Index to reflect various corporate actions and other changes to the S&P
Global BMI Shariah Index (such as reconstitutions, additions, and deletions).
Each investment made by the Fund is pre-screened and approved as Sharia
compliant before investment by the Fund.
The
Fund will generally use a “replication” strategy to achieve its investment
objective, meaning the Fund will generally invest in all of the component
securities of the Index in the same approximate proportions as in the Index.
However, the Fund may use a “representative sampling” strategy, meaning it may
invest in a sample of the securities in the Index whose risk, return, and other
characteristics closely resemble the risk, return, and other characteristics of
the Index as a whole, when the Fund’s investment adviser believes it is in the
best interests of the Fund (e.g.,
when replicating the Index involves practical difficulties or substantial costs,
an Index constituent becomes temporarily illiquid, unavailable, or less liquid,
or as a result of legal restrictions or limitations that apply to the Fund but
not to the Index).
To
the extent the Index concentrates (i.e.,
holds more than 25% of its total assets) in the securities of a particular
industry or group of related industries, the Fund will concentrate its
investments to approximately the same extent as the Index. The Fund is
classified as non-diversified and therefore may invest a larger percentage of
its assets in the securities of a single company or a smaller number of
companies than diversified funds. The Index is expected to be concentrated
(i.e.,
holding more than 25% of its total assets) in
REITs.
The Fund is deemed to be non-diversified
under the Investment Company Act of 1940, as amended (the “1940 Act”) ,which
means that it may invest a greater percentage of its assets in the securities of
a single issuer or a smaller number of issuers than if it was a diversified
fund.
Principal Investment
Risks
You can lose money on your investment in the
Fund. The Fund is subject to the risks described below. Some or
all of these risks may adversely affect the Fund’s net asset value per share
(“NAV”), trading price, yield, total return and/or ability to meet its
objective. For more information about the risks of investing in the Fund, see
the section in the Fund’s Prospectus titled “Additional Information About the
Fund—Principal Risks of Investing in the Fund.”
The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with other funds. Each risk summarized below
is considered a “principal risk” of investing in the Fund, regardless of the
order in which they appear.
•Concentration
Risk. The
Fund’s investments will be concentrated in an industry or group of industries to
the extent the Index is so concentrated. In such event, the value of Shares may
rise and fall more than the value of shares that invest in securities of
companies in a broader range of industries.
◦Concentration
in REITs
The
Fund is expected to be concentrated in REITs. A REIT is a company that owns or
finances income-producing real estate and meets certain requirements under the
Internal Revenue Code of 1986, as amended (the “Code”), as more fully described
in the Fund’s Statement of Additional Information (“SAI”). Through its
investments in REITs, the Fund is subject to the risks of investing in the real
estate market, including decreases in property revenues, increases in interest
rates, increases in property taxes and operating expenses, legal and regulatory
changes, a lack of credit or capital, defaults by borrowers or tenants,
environmental problems and natural disasters.
REITs
are subject to additional risks, including those related to adverse governmental
actions; declines in property value and the real estate market; the potential
failure to qualify for tax-free pass through of income;
and
exemption from registration as an investment company. REITs are dependent upon
specialized management skills and may invest in relatively few properties, a
small geographic area, or a small number of property types. As a result,
investments in REITs may be volatile. To the extent the Fund invests in REITs
concentrated in specific geographic areas or property types, the Fund may be
subject to a greater loss as a result of adverse developments affecting such
area or property types. REITs are pooled investment vehicles with their own fees
and expenses and the Fund will indirectly bear a proportionate share of those
fees and expenses.
•Currency
Risk.
The Fund’s exposure to foreign currencies subjects the Fund to the risk that
those currencies will decline in value relative to the U.S. Dollar. Currency
rates in foreign countries may fluctuate significantly over short periods of
time for any number of reasons, including changes in interest rates and the
imposition of currency controls or other political developments in the U.S. or
abroad.
•Emerging
Markets Risk. The
Fund may invest in securities issued by companies domiciled or headquartered in
emerging market nations. Investments in securities traded in developing or
emerging markets, or that provide exposure to such securities or markets, can
involve additional risks relating to political, economic, currency, or
regulatory conditions not associated with investments in U.S. securities and
investments in more developed international markets. Such conditions may impact
the ability of the Fund to buy, sell, or otherwise transfer securities,
adversely affect the trading market and price for Shares and cause the Fund to
decline in value.
•Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific issuers, industries, or sectors in which the Fund invests. Common
stocks, such as those held by the Fund, are generally exposed to greater risk
than other types of securities, such as preferred stock and debt obligations,
because common stockholders generally have inferior rights to receive payment
from issuers. Securities in the Fund’s portfolio may underperform in comparison
to securities in the general financial markets, a particular financial market,
or other asset classes, due to a number of factors, including inflation (or
expectations for inflation), interest rates, global demand for particular
products or resources, natural disasters or events, pandemic diseases,
terrorism, regulatory events, or government controls.
•ETF
Risks
◦Authorized
Participants, Market Makers, and Liquidity Providers Concentration Risk.
The
Fund has a limited number of financial institutions that are authorized to
purchase and redeem Shares directly from the Fund (known as “Authorized
Participants” or “APs”). In addition, there may be a limited number of market
makers and/or liquidity providers in the marketplace. To the extent either of
the following events occur, Shares may trade at a material discount to NAV and
possibly face delisting: (i) APs exit the business or otherwise become unable to
process creation and/or redemption orders and no other APs step forward to
perform these services; or (ii) market makers and/or liquidity providers exit
the business or significantly reduce their business activities and no other
entities step forward to perform their functions.
◦Costs
of Buying or Selling Shares. Due
to the costs of buying or selling Shares, including brokerage commissions
imposed by brokers and bid-ask spreads, frequent trading of Shares may
significantly reduce investment results and an investment in Shares may not be
advisable for investors who anticipate regularly making small
investments.
◦Shares
May Trade at Prices Other Than NAV. As
with all ETFs, Shares may be bought and sold in the secondary market at market
prices. Although it is expected that the market price of Shares will approximate
the Fund’s NAV, there may be times when the market price of Shares is more than
the NAV intra-day (premium) or less than the NAV intra-day (discount) due to
supply and demand of Shares or during periods of market volatility. This risk is
heightened in times of market volatility, periods of steep market declines, and
periods when there is limited trading activity for Shares in the secondary
market, in which case such premiums or discounts may be significant. Because
securities held by the Fund may trade on foreign exchanges that are closed when
the Fund’s primary listing exchange is open, the Fund is likely to experience
premiums and discounts greater than those of ETFs holding only domestic
securities.
◦Trading.
Although Shares are listed on a national securities exchange, such as NYSE Arca,
Inc. (the “Exchange”), and may be traded on U.S. exchanges other than the
Exchange, there can be no assurance that Shares will trade with any volume, or
at all, on any stock exchange. In stressed market conditions, the liquidity of
Shares may begin to mirror the liquidity of the Fund’s underlying portfolio
holdings, which can be significantly less liquid than Shares.
•Foreign
Securities Risks. Investments
in securities or other instruments of non-U.S. issuers involve certain risks not
involved in domestic investments and may experience more rapid and extreme
changes in value than investments in securities of U.S. companies. Financial
markets in foreign countries often are not as developed, efficient, or liquid as
financial markets in the United States, and therefore, the prices of non-U.S.
securities and instruments can be more volatile. In addition, the Fund will be
subject to risks associated with adverse political and economic developments in
foreign countries, which may include the imposition of economic sanctions.
Generally, there is less readily available and reliable information about
non-U.S. issuers due to less rigorous disclosure or accounting standards and
regulatory practices.
•Market
Capitalization Risk.
◦Large-Capitalization
Investing. The
securities of large-capitalization companies may be relatively mature compared
to smaller companies and therefore subject to slower growth during times of
economic expansion. Large-capitalization companies may also be unable to respond
quickly to new competitive challenges, such as changes in technology and
consumer tastes.
◦Mid-Capitalization
Investing. The
securities of mid-capitalization companies may be more vulnerable to adverse
issuer, market, political, or economic developments than securities of
large-capitalization companies. The securities of mid-capitalization companies
generally trade in lower volumes and are subject to greater and more
unpredictable price changes than large capitalization stocks or the stock market
as a whole.
◦Small-Capitalization
Investing.
The securities of small-capitalization companies may be more vulnerable to
adverse issuer, market, political, or economic developments than securities of
large- or mid-capitalization companies. The securities of small-capitalization
companies generally trade in lower volumes and are subject to greater and more
unpredictable price changes than large- or mid-capitalization stocks or the
stock market as a whole. There is typically less publicly available information
concerning smaller-capitalization companies than for larger, more established
companies.
•New
Fund Risk. The
Fund is a recently organized management investment company with no operating
history. As a result, prospective investors do not have a track record or
history on which to base their investment decisions.
•Non-Diversification
Risk.
Because the Fund is “non-diversified,” it may
invest a greater percentage of its assets in the securities of a single issuer
or a smaller number of issuers than if it was a diversified fund. As a result, a
decline in the value of an investment in a single issuer or a smaller number of
issuers could cause the Fund’s overall value to decline to a greater degree than
if the Fund held a more diversified portfolio.
•Passive
Investment Risk. The
Fund invests in the securities included in, or representative of, its Index
regardless of their investment merit. The Fund does not attempt to outperform
its Index or take defensive positions in declining markets. As a result, the
Fund’s performance may be adversely affected by a general decline in the market
segments relating to its Index.
•Sharia-Compliant
Investing Risk.
Islamic religious law commonly known as Sharia has certain restrictions
regarding finance and commercial activities permitted for Muslims, including
interest restrictions and prohibited industries, which reduces the size of the
overall universe in which the Fund can invest. The strategy to reduce the
investable universe may limit investment opportunities and adversely affect the
Fund’s performance, especially in comparison to a more diversified fund. Because
Islamic principles preclude the use of interest-paying instruments, cash
reserves do not earn income.
•Recent
Market Events.
U.S. and international markets have experienced significant periods of
volatility in recent years and months due to a number of economic, political and
global macro factors including the impact of the novel coronavirus (COVID-19) as
a global pandemic, which has resulted in public health issues, growth concerns
in the U.S. and overseas, layoffs, rising unemployment claims, changed travel
and social behaviors, and reduced consumer spending. The effects of COVID-19 may
lead to a substantial economic downturn or recession in the U.S. and global
economies, the recovery from which is uncertain and may last for an extended
period of time. These developments as well as other events could result in
further market volatility and negatively affect financial asset prices, the
liquidity of certain securities and the normal operations of securities
exchanges and other markets.
•Tax
Risk.
To qualify for the favorable tax treatment generally available to regulated
investment companies (“RICs”), the Fund must satisfy certain diversification
requirements. In particular, the Fund generally may not acquire a security if,
as a result of the acquisition, (i) more than 50% of the value of the Fund’s
assets would be invested in (a) issuers in which the Fund has, in each case,
invested more than 5% of the Fund’s assets or (b) issuers more than 10% of whose
outstanding voting securities are owned by the Fund or (ii) more than 25% of the
value of
the
Fund’s assets would be invested in (a) the securities of any one issuer. Given
the concentration of the Index in a relatively small number of securities, it
may not always be possible for the Fund to fully implement a replication
strategy or a representative sampling strategy while satisfying these
diversification requirements. The Fund’s efforts to satisfy the diversification
requirements may affect the Fund’s execution of its investment strategy and may
cause the Fund’s return to deviate from that of the Index, and the Fund’s
efforts to replicate or represent the Index may cause it inadvertently to fail
to satisfy the diversification requirements. If the Fund were to fail to satisfy
the diversification requirements, it could incur penalty taxes and be forced to
dispose of certain assets, or it could fail to qualify as a RIC. If the Fund
were to fail to qualify as a RIC, it would be taxed in the same manner as an
ordinary corporation, and distributions to its shareholders would not be
deductible by the Fund in computing its taxable income.
•Tracking
Error Risk.
As with all index funds, the performance of the Fund and its Index may differ
from each other for a variety of reasons. For example, the Fund incurs operating
expenses and portfolio transaction costs not incurred by the Index. In addition,
the Fund may not be fully invested in the securities of the Index at all times
or may hold securities not included in the Index.
•Underlying
Index Risk. Neither
the Fund’s investment adviser nor the Index Provider is able to guarantee the
continuous availability or timeliness of the production of the Index. The
calculation and dissemination of the Index values may be delayed if the
information technology or other facilities of the Index Provider, calculation
agent, data providers and/or relevant stock exchange malfunction for any reason.
A significant delay may cause trading in shares of the Fund to be suspended.
Errors in Index data, computation and/or the construction in accordance with its
methodology may occur from time to time and may not be identified and corrected
by the Index Provider, calculation agent or other applicable party for a period
of time or at all, which may have an adverse impact on the Fund and its
shareholders.
Performance
Performance information for the Fund is not
included because the Fund has not completed a full calendar year of operations
as of the date of this Prospectus. When such
information is included, this section will provide some indication of the risks
of investing in the Fund by showing changes in the Fund’s performance history
from year to year and showing how the Fund’s average annual total returns
compare with those of the Index and a broad measure of market
performance. Although past performance of the
Fund is no guarantee of how it will perform in the future, historical
performance may give you some indication of the risks of investing in the
Fund. Updated performance information will be available on the
Fund’s website at www.sp-funds.com.
Management
Investment
Adviser
Toroso
Investments, LLC (“Toroso” or the “Adviser”) serves as investment adviser to the
Fund.
Investment
Sub-Adviser
ShariaPortfolio,
Inc. (the “Sub-Adviser”), serves as investment sub-adviser to the
Fund.
Portfolio
Managers
Michael
Venuto, Chief Investment Officer for the Adviser, has been a portfolio manager
of the Fund since its inception in 2020.
Charles
A. Ragauss, CFA, Portfolio Manager for the Adviser, has been a portfolio manager
of the Fund since its inception in 2020.
Naushad
Virji, Chief Executive Officer for the Sub-Adviser, has been a portfolio manager
of the Fund since its inception in 2020.
Purchase
and Sale of Shares
The
Fund issues and redeems Shares at NAV only in large blocks known as “Creation
Units,” which only APs (typically, broker-dealers) may purchase or redeem. The
Fund generally issues and redeems Creation Units in exchange for a portfolio of
securities (the “Deposit Securities”) and/or a designated amount of U.S.
cash.
Shares
are listed on a national securities exchange, such as the Exchange, and
individual Shares may only be bought and sold in the secondary market through
brokers at market prices, rather than NAV. Because Shares trade at market prices
rather than NAV, Shares may trade at a price greater than NAV (premium) or less
than NAV (discount).
An
investor may incur costs attributable to the difference between the highest
price a buyer is willing to pay to purchase Shares (the “bid” price) and the
lowest price a seller is willing to accept for Shares (the “ask” price) when
buying or selling Shares in the secondary market. This difference in bid and ask
prices is often referred to as the “bid-ask spread.”
When
available, information regarding the Fund’s NAV, market price, how often Shares
traded on the Exchange at a premium or discount, and bid-ask spreads can be
found on the Fund’s website at www.sp-funds.com.
Tax
Information
Fund
distributions are generally taxable as ordinary income, qualified dividend
income, or capital gains (or a combination), unless your investment is in an
individual retirement account (“IRA”) or other tax-advantaged account.
Distributions on investments made through tax-deferred arrangements may be taxed
later upon withdrawal of assets from those arrangements.
Financial
Intermediary Compensation
If
you purchase Shares through a broker-dealer or other financial intermediary
(such as a bank) (an “Intermediary”), the Adviser, the Sub-Adviser, or their
affiliates may pay Intermediaries for certain activities related to the Fund,
including participation in activities that are designed to make Intermediaries
more knowledgeable about exchange-traded products, including the Fund, or for
other activities, such as marketing, educational training, or other initiatives
related to the sale or promotion of Shares. These payments may create a conflict
of interest by influencing the Intermediary and your salesperson to recommend
the Fund over another investment. Any such arrangements do not result in
increased Fund expenses. Ask your salesperson or visit the Intermediary’s
website for more information.
Investment
Objective
The
Fund seeks to track the performance, before fees and expenses, of the
Index.
An
investment objective is fundamental if it cannot be changed without the consent
of the holders of a majority of the outstanding Shares. The Fund’s investment
objective has not been adopted as a fundamental investment policy and therefore
may be changed without the consent of the Fund’s shareholders upon written
notice to shareholders.
Change
in Investment Policy
The
Fund will not change its investment policy of, under normal market conditions,
investing at least 80% its net assets (plus any borrowing made for investment
purposes) in the component securities of its underlying index without providing
60 days’ notice to shareholders.
Principal
Investment Strategies
The
following information is in addition to, and should be read along with, the
description of the Fund’s principal investment strategies in the section titled
“Fund Summary—Principal Investment Strategies” above.
To
the extent the Index concentrates (i.e., holds more than 25% of its total
assets) in the securities of a particular industry or group of related
industries, the Fund will concentrate its investments to approximately the same
extent as the Index. The Fund is deemed to be “non-diversified,” which means
that it may invest a greater percentage of its assets in the securities of a
single issuer or a smaller number of issuers than if it was a diversified fund.
Manager
of Managers Structure
The
Fund and the Adviser have received exemptive relief from the SEC permitting the
Adviser (subject to certain conditions and the approval of the Trust’s Board of
Trustees (the “Board”)) to change or select new unaffiliated sub-advisers
without obtaining shareholder approval. The relief also permits the Adviser to
materially amend the terms of agreements with an unaffiliated sub-adviser
(including an increase in the fee paid by the Adviser to the unaffiliated
sub-adviser (and not paid by the Fund)) or to continue the employment of an
unaffiliated sub-adviser after an event that would otherwise cause the automatic
termination of services with Board approval, but without shareholder approval.
Shareholders will be notified of any unaffiliated sub-adviser changes.
Principal
Risks of Investing in the Fund
This
section provides additional information regarding the principal risks described
under “Principal Investment Risks” in the Fund’s summary section. The factors
below apply to the Fund as indicated. Each of the factors below could have a
negative impact on the Fund’s performance and trading prices.
The
principal risks are presented in alphabetical order to facilitate finding
particular risks and comparing them with those of other funds. Each risk
summarized below is considered a “principal risk” of investing in the Fund,
regardless of the order in which they appear. As with any investment, there is a
risk that you could lose all or a portion of your investment in the Fund. Some
or all of these risks may adversely affect the Fund’s NAV per share, trading
price, yield, total return and/or ability to meet its investment objective. The
following risks could affect the value of your investment in the Fund:
•Concentration
Risk.
The Fund’s investments will be concentrated in an industry or group of
industries to the extent the Fund’s Index is so concentrated. In such event, the
value of Shares may rise and fall more than the value of shares that invest in
securities of companies in a broader range of industries.
◦Concentration
in REITs
The
Fund is expected to be concentrated in REITs. A REIT is a company that owns or
finances income-producing real estate and meets certain requirements under the
Code, as more fully described in the Fund’s SAI. Through its investments in
REITs, the Fund is subject to the risks of investing in the real estate market,
including decreases in property revenues, increases in interest rates, increases
in property taxes and operating expenses, legal and regulatory changes, a lack
of credit or capital, defaults by borrowers or tenants, environmental problems
and natural disasters.
REITs
are subject to additional risks, including those related to adverse governmental
actions; declines in property value and the real estate market; the potential
failure to qualify for tax-free pass through of income; and exemption from
registration as an investment company. REITs are dependent upon specialized
management skills and may invest in relatively few properties, a small
geographic area, or a small number of property types. As a result, investments
in REITs may be volatile. To the extent the Fund invests in REITs concentrated
in
specific
geographic areas or property types, the Fund may be subject to a greater loss as
a result of adverse developments affecting such area or property types. REITs
are pooled investment vehicles with their own fees and expenses and the Fund
will indirectly bear a proportionate share of those fees and
expenses.
•Currency
Risk.
The Fund’s exposure to foreign currencies subjects the Fund to the risk that
those currencies will decline in value relative to the U.S. Dollar. Currency
rates in foreign countries may fluctuate significantly over short periods of
time for any number of reasons, including changes in interest rates and the
imposition of currency controls or other political developments in the U.S. or
abroad.
•Emerging
Markets Risk. The
Fund’s investments in emerging market securities impose risks different from, or
greater than, risks of investing in foreign developed countries. These risks
include: smaller market capitalization of securities markets, which may suffer
periods of relative illiquidity; significant price volatility; and restrictions
on foreign investment. Emerging market countries may have relatively unstable
governments and may present the risk of nationalization of businesses,
expropriation, and confiscatory taxation or, in certain instances, reversion to
closed market, centrally planned economies. Emerging market economies may also
experience more severe downturns. In addition, foreign investors may be required
to register or pay taxes or tariffs on the proceeds of securities sales; future
economic or political crises could lead to price controls, forced mergers,
expropriation or confiscatory taxation, seizure, nationalization, or creation of
government monopolies. The currencies of emerging market countries may
experience significant declines against the U.S. dollar, and devaluation may
occur subsequent to investments in these currencies by the Fund. Inflation and
rapid fluctuations in inflation rates have had, and may continue to have,
negative effects on the economies and securities markets of certain emerging
market countries.
Additional
risks of emerging markets securities may include: greater social, economic and
political uncertainty and instability; more substantial governmental involvement
in the economy; less governmental supervision and regulation; unavailability of
currency hedging techniques; companies that are newly organized and small;
differences in auditing and financial reporting standards, which may result in
unavailability of material information about issuers; and less developed legal
systems. Emerging securities markets may have different clearance and settlement
procedures, which may be unable to keep pace with the volume of securities
transactions or otherwise make it difficult to engage in such transactions.
Settlement problems may cause the Fund to miss attractive investment
opportunities, hold a portion of its assets in cash pending investment, or be
delayed in disposing of a portfolio security. Such a delay could result in
possible liability to a purchaser of the security. In addition, less information
may be available about companies in emerging markets than in developed markets
because such emerging markets companies may not be subject to accounting,
auditing and financial reporting standards or to other regulatory practices
required by U.S. companies which may lead to potential errors in index data,
index computation and/or index construction. Such conditions may impact the
ability of the Fund to buy, sell or otherwise transfer securities; adversely
affect the trading market and price for such securities; and/or cause the Fund
to decline in value.
•Equity
Market Risk. The
equity securities held in the Fund’s portfolio may experience sudden,
unpredictable drops in value or long periods of decline in value. This may occur
because of factors that affect securities markets generally or factors affecting
specific issuers, industries, or sectors in which the Fund invests. Common
stocks, such as those held by the Fund, are generally exposed to greater risk
than other types of securities, such as preferred stock and debt obligations,
because common stockholders generally have inferior rights to receive payment
from issuers. Securities in the Fund’s portfolio may underperform in comparison
to securities in the general financial markets, a particular financial market,
or other asset classes, due to a number of factors, including inflation (or
expectations for inflation), interest rates, global demand for particular
products or resources, natural disasters or events, pandemic diseases,
terrorism, regulatory events, or government controls.
•ETF
Risks.
◦APs,
Market Makers, and Liquidity Providers Concentration Risk. The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, Shares may trade at a material discount to NAV and possibly face
delisting: (i) APs exit the business or otherwise become unable to process
creation and/or redemption orders and no other APs step forward to perform these
services; or (ii) market makers and/or liquidity providers exit the business or
significantly reduce their business activities and no other entities step
forward to perform their functions.
◦Costs
of Buying or Selling Shares. Investors
buying or selling Shares in the secondary market will pay brokerage commissions
or other charges imposed by brokers, as determined by that broker. Brokerage
commissions
are often a fixed amount and may be a significant proportional cost for
investors seeking to buy or sell relatively small amounts of Shares. In
addition, secondary market investors will also incur the cost of the bid-ask
spread. The bid-ask spread varies over time for Shares based on trading volume
and market liquidity, and is generally lower if Shares have more trading volume
and market liquidity and higher if Shares have little trading volume and market
liquidity. Further, a relatively small investor base in the Fund, asset swings
in the Fund and/or increased market volatility may cause increased bid-ask
spreads. Due to the costs of buying or selling Shares, including bid-ask
spreads, frequent trading of Shares may significantly reduce investment results
and an investment in Shares may not be advisable for investors who anticipate
regularly making small investments.
◦Shares
May Trade at Prices Other Than NAV. As
with all ETFs, Shares may be bought and sold in the secondary market at market
prices. Although it is expected that the market price of the Shares will
approximate the Fund’s NAV, there may be times when the market price of Shares
is more than the NAV intra-day (premium) or less than the NAV intra-day
(discount) due to supply and demand of the Shares or during periods of market
volatility. This risk is heightened in times of market volatility or periods of
steep market declines. The market price of Shares during the trading day, like
the price of any exchange-traded security, includes a “bid-ask” spread charged
by the exchange specialist, market makers, or other participants that trade the
Shares. In times of severe market disruption, the bid-ask spread can increase
significantly. At those times, Shares are most likely to be traded at a discount
to NAV, and the discount is likely to be greatest when the price of Shares is
falling fastest, which may be the time that you most want to sell your Shares.
The Adviser believes that, under normal market conditions, large market price
discounts or premiums to NAV will not be sustained because of arbitrage
opportunities. Because securities held by the Fund may trade on foreign
exchanges that are closed when the Fund’s primary listing exchange is open, the
Fund is likely to experience premiums and discounts greater than those of ETFs
holding only domestic securities.
◦Trading.
Although
Shares are listed for trading on the Exchange and may be listed or traded on
U.S. and non-U.S. stock exchanges other than the Exchange, there can be no
assurance that an active trading market for such Shares will develop or be
maintained. Trading in Shares may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable.
In addition, trading in Shares on the Exchange is subject to trading halts
caused by extraordinary market volatility pursuant to Exchange “circuit breaker”
rules, which temporarily halt trading on the Exchange when a decline in the
S&P 500 Index during a single day reaches certain thresholds (e.g., 7%, 13%,
and 20%). Additional rules applicable to the Exchange may halt trading in Shares
when extraordinary volatility causes sudden, significant swings in the market
price of Shares. There can be no assurance that Shares will trade with any
volume, or at all, on any stock exchange. In stressed market conditions, the
liquidity of Shares may begin to mirror the liquidity of the Fund’s underlying
portfolio holdings, which can be significantly less liquid than
Shares.
•Foreign
Securities Risks.
Certain foreign countries may impose exchange control regulations, restrictions
on repatriation of profit on investments or of capital invested, local taxes on
investments, and restrictions on the ability of issuers of non-U.S. securities
to make payments of principal and interest to investors located outside the
country, whether from currency blockage or otherwise. In addition, the Fund will
be subject to risks associated with adverse political and economic developments
in foreign countries, including seizure or nationalization of foreign deposits,
the imposition of economic sanctions, different legal systems and laws relating
to bankruptcy and creditors’ rights, and the potential inability to enforce
legal judgments, all of which could cause the Fund to lose money on its
investments in non-U.S. securities. The cost of servicing external debt will
also generally be adversely affected by rising international interest rates, as
many external debt obligations bear interest at rates which are adjusted based
upon international interest rates. Because non-U.S. securities may trade on days
when Shares are not priced, NAV may change at times when Shares cannot be
sold.
Foreign
banks and securities depositories at which the Fund holds its foreign securities
and cash may be recently organized or new to the foreign custody business and
may be subject to only limited or no regulatory oversight. Additionally, many
foreign governments do not supervise and regulate stock exchanges, brokers and
the sale of securities to the same extent as does the United States and may not
have laws to protect investors that are comparable to U.S. securities laws.
Settlement and clearance procedures in certain foreign markets may result in
delays in payment for or delivery of securities not typically associated with
settlement and clearance of U.S. investments.
In
recent years, the European financial markets have experienced volatility and
adverse trends due to concerns about economic downturns in, or rising government
debt levels of, several European countries. These events may spread to
other
countries in Europe, including countries that do not use the Euro. These events
may affect the value and liquidity of certain of the Fund’s
investments.
•Market
Capitalization Risk.
◦Large-Capitalization
Investing. The
securities of large-capitalization companies may be relatively mature compared
to smaller companies and therefore subject to slower growth during times of
economic expansion. Large-capitalization companies may also be unable to respond
quickly to new competitive challenges, such as changes in technology and
consumer tastes.
◦Mid-Capitalization
Investing. The
securities of mid-capitalization companies may be more vulnerable to adverse
issuer, market, political, or economic developments than securities of
large-capitalization companies. The securities of mid-capitalization companies
generally trade in lower volumes and are subject to greater and more
unpredictable price changes than large capitalization stocks or the stock market
as a whole.
◦Small-Capitalization
Investing.
The securities of small-capitalization companies may be more vulnerable to
adverse issuer, market, political, or economic developments than securities of
large- or mid-capitalization companies. The securities of small-capitalization
companies generally trade in lower volumes and are subject to greater and more
unpredictable price changes than large- or mid-capitalization stocks or the
stock market as a whole. There is typically less publicly available information
concerning smaller-capitalization companies than for larger, more established
companies.
•New
Fund Risk. The
Fund is a recently organized management investment company with no operating
history. As a result, prospective investors do not have a track record or
history on which to base their investment decisions. There can be no assurance
that the Fund will grow to or maintain an economically viable size.
•Non-Diversification
Risk.
Because the Fund is “non-diversified,” it may invest a greater percentage of its
assets in the securities of a single issuer or a smaller number of issuers than
if it was a diversified fund. As a result, a decline in the value of an
investment in a single issuer or a smaller number of issuers could cause the
Fund’s overall value to decline to a greater degree than if the Fund held a more
diversified portfolio. This may increase the Fund’s volatility and have a
greater impact on the Fund’s performance.
•Passive
Investment Risk.
The Fund invests in the securities included in, or representative of, its Index
regardless of its investment merit. The Fund does not attempt to outperform its
Index or take defensive positions in declining markets. As a result, the Fund’s
performance may be adversely affected by a general decline in the market
segments relating to its Index.
•Sharia-Compliant
Investing Risk.
Islamic principles restrict the Fund’s ability to invest in certain market
sectors, such as financial companies and conventional fixed-income securities,
and reduce the size of the overall universe in which the Fund can invest. The
strategy to reduce the investable universe may limit investment opportunities
and adversely affect the Fund’s performance, especially in comparison to a more
diversified fund. Because Islamic principles preclude the use of interest-paying
instruments, cash reserves do not earn income.
•Recent
Market Events.
U.S. and international markets have experienced significant periods of
volatility in recent years and months due to a number of economic, political and
global macro factors including the impact of the novel coronavirus (COVID-19) as
a global pandemic and related public health issues, growth concerns in the U.S.
and overseas, uncertainties regarding interest rates, trade tensions, and the
threat of tariffs imposed by the U.S. and other countries. In particular,
the spread of COVID-19 worldwide has resulted in disruptions to supply chains
and customer activity, stress on the global healthcare system, temporary and
permanent layoffs in the private sector, and rising unemployment claims, reduced
consumer spending, quarantines, cancellations, market declines, the closing of
borders, restrictions on travel, changed travel and social behaviors, and
widespread concern and uncertainty, all of which may lead to a substantial
economic downturn or recession in the U.S. and global economies. The recovery
from the effects of COVID-19 is uncertain and may last for an extended period of
time. Health crises and related political, social and economic disruptions
caused by the spread of COVID-19 may also exacerbate other pre-existing
political, social and economic risks in certain countries. These developments as
well as other events could result in further market volatility and negatively
affect financial asset prices, the liquidity of certain securities and the
normal operations of securities exchanges and other markets, despite government
efforts to address market disruptions. In addition, the Fund may face challenges
with respect to its day-to-day operations if key personnel of the Fund’s Adviser
or Sub-Adviser or other service providers are unavailable due to quarantines and
restrictions on travel related to COVID-19. As a result, the risk environment
remains elevated. The Adviser and the Sub-Adviser will
monitor
developments and seek to manage the Fund in a manner consistent with achieving
the Fund’s investment objective, but there can be no assurance that they will be
successful in doing so.
•Tax
Risk.
To qualify for the favorable tax treatment generally available to RICs, the Fund
must satisfy certain diversification requirements. In particular, the Fund
generally may not acquire a security if, as a result of the acquisition, (i)
more than 50% of the value of the Fund’s assets would be invested in (a) issuers
in which the Fund has, in each case, invested more than 5% of the Fund’s assets
or (b) issuers more than 10% of whose outstanding voting securities are owned by
the Fund or (ii) more than 25% of the value of the Fund’s assets would be
invested in (a) the securities of any one issuer. Given the concentration of the
Index in a relatively small number of securities, it may not always be possible
for the Fund to fully implement a replication strategy or a representative
sampling strategy while satisfying these diversification requirements. The
Fund’s efforts to satisfy the diversification requirements may affect the Fund’s
execution of its investment strategy and may cause the Fund’s return to deviate
from that of the Index, and the Fund’s efforts to replicate or represent the
Index may cause it inadvertently to fail to satisfy the diversification
requirements. If the Fund were to fail to satisfy the diversification
requirements, it could incur penalty taxes and be forced to dispose of certain
assets, or it could fail to qualify as a RIC. If the Fund were to fail to
qualify as a RIC, it would be taxed in the same manner as an ordinary
corporation, and distributions to its shareholders would not be deductible by
the Fund in computing its taxable income.
•Tracking
Error Risk. As
with all index funds, the performance of the Fund and its Index may differ from
each other for a variety of reasons. For example, the Fund incurs operating
expenses and portfolio transaction costs not incurred by the Index. In addition,
the Fund may not be fully invested in the securities of the Index at all times
or may hold securities not included in the Index. The use of sampling techniques
may affect the Fund’s ability to achieve close correlation with its Index. The
Fund may use a representative sampling strategy to achieve its investment
objective, if the Sub-Adviser believes it is in the best interests of the Fund,
which generally can be expected to produce a greater non-correlation
risk.
•Underlying
Index Risk.
Neither the Adviser nor the Index Provider (defined below) is able to guarantee
the continuous availability or timeliness of the production of the Index. The
calculation and dissemination of Index values may be delayed if the information
technology or other facilities of the Index Provider, calculation agent, data
providers and/or relevant stock exchange malfunction for any reason. A
significant delay may cause trading in shares of the Fund to be suspended.
Errors in Index data, computation and/or the construction in accordance with its
methodology may occur from time to time and may not be identified and corrected
by the Index Provider, calculation agent or other applicable party for a period
of time or at all, which may have an adverse impact on the Fund and its
shareholders.
S&P
Dow Jones Indices LLC is the index provider and calculation agent for the Index
(“S&P” or the “Index Provider”). S&P Dow Jones Indices LLC is not
affiliated with the Fund, the Adviser, the Sub-Adviser, the Fund’s distributor,
or any of their respective affiliates. The Index Provider provides information
to the Fund about the constituents of the Index and does not provide investment
advice with respect to the desirability of investing in, purchasing, or selling
securities.
Sharia
Compliance
Islamic
religious law commonly known as Sharia has certain restrictions regarding
finance and commercial activities permitted for Muslims, including interest
restrictions and prohibited industries. The Fund may utilize a liquidation
period of up to 90 days to exit its position in holdings that are deemed to be
non-Sharia compliant. This liquidation period may only be utilized to minimize
liquidation costs.
The
S&P Global All Equity REIT Shariah Capped Index (the “Index” or the “Shariah
REIT Index”) is designed to measure all REIT securities listed in developed and
emerging markets and included as constituents of the S&P Global BMI Shariah
Index, a comprehensive global Sharia-compliant index of publicly-traded equity
securities. Constituents of the S&P Global BMI Shariah Index, and therefore
constituents of the Index, have been screened to exclude companies with
non-compliant business activities (companies that offer products and services
that are not compliant with Sharia law such as gambling, alcohol or tobacco) and
to include companies compliant with certain accounting-based financial ratios
(companies must satisfy financial ratios governing leverage, cash, and the share
of revenues derived from non-compliant activities), as described below. Ratings
Intelligence Partners, an independent London/Kuwait-based consulting company,
provides the Sharia screens and filters the S&P Global BMI Shariah Index
based on these screens. Ratings Intelligence Partners has a team of qualified
Islamic researchers who work directly with a Sharia supervisory board of five
Islamic scholars that interprets business issues and recommends actions related
to the constituents of the S&P Global BMI Shariah Index.
Companies
that receive income in excess of 5% of its total revenue from Sharia-prohibited
business activities are removed from the list of companies eligible for
inclusion in the S&P Global BMI Shariah Index. Sharia-prohibited business
activities include:
•Advertising
of all non-Islamic activities;
•Media
& Entertainment (certain producers, distributors and broadcasters of music,
movies, television shows and musical radio shows and cinema
operators);
•Alcohol
production or sale;
•Cloning;
•Conventional
Finance (except: Islamic Banks, Islamic Financial Institutions and Islamic
Insurance Companies);
•Casino
management and gambling;
•Pork-related
products or production, packaging, and process or any other activity related to
pork;
•Pornography;
•Tobacco
manufacturing or sale; and
•Trading
of gold and silver as cash on deferred basis.
After
companies have been screened by their business activities, the remaining
companies’ finances are further examined to ensure they are Sharia compliant.
Only those companies that satisfy the following financial ratios will be
considered Sharia compliant:
•Debt
is less than 33.333% of total assets;
•Cash
and interest-bearing items are less than 33.333% of total assets;
•Accounts
receivable and cash are less than 50% of total assets; and
•Total
interest and non-compliant activities income are less than 5% of total
revenue.
The
Shariah REIT Index constituents are reviewed on an ongoing and monthly basis to
ensure they continue to be Sharia-compliant companies. Because the Shariah REIT
Index is rebalanced and reconstituted monthly, any portfolio security determined
to be non-Sharia-compliant will be held for no longer than 30 days.
Dividend
Purification
If
a company derives a portion of its total income from interest income and/or
Sharia-prohibited business activities, Sharia investment principles state that
this portion must be “purified” from the distributions paid out to shareholders.
Shareholders may purify their portion of prohibited income received by absolving
an equivalent amount to charitable purposes. Accordingly, for investors seeking
to purify prohibited income received from the Fund, if any, the Sub-Adviser will
publish on the Fund’s website, www.sp-funds.com, the per share amount to be
purified by shareholders on an annual basis.
The
Sub-Adviser determines such amount by evaluating income earned from
Sharia-prohibited business activities. In making such determination, the
Sub-Adviser considers the amount of prohibited income in relation to the number
of shares of the company held by the Fund and the Fund’s holding period of such
shares. A company may have prohibited income whether or not the company’s
profits have been distributed and whether or not the company has declared a
profit or suffered a loss.
For
additional information about the Fund’s distribution policies, see “Dividends,
Distributions and Taxes” below in this Prospectus.
Information
about the Fund’s daily portfolio holdings will be available on the Fund’s
website at www.sp-funds.com. A complete description of the Fund’s policies and
procedures with respect to the disclosure of the Fund’s portfolio holdings is
available in the Fund’s SAI.
Investment
Adviser
Toroso
Investments, LLC, 898 N. Broadway, Suite 2, Massapequa, New York 11758, serves
as investment adviser to the Fund and has overall responsibility for the general
management and administration of the Fund pursuant to an investment advisory
agreement with the Trust, on behalf of the Fund (the “Advisory Agreement”). The
Adviser also arranges for sub-advisory, transfer agency, custody, fund
administration, and all other related services necessary for the Fund to
operate. Toroso is a Delaware limited liability company founded in March 2012
that is dedicated to understanding, researching and managing assets within the
expanding ETF universe. As of October 31, 2020 Toroso had assets under
management of $4.9 billion.
The
Adviser provides oversight of the Sub-Adviser and review of the Sub-Adviser’s
performance. The Adviser is also responsible for trading portfolio securities
for the Fund, including selecting broker-dealers to execute purchase and sale
transactions. For the services provided to the Fund, the Fund pays the Adviser a
unified management fee, which is calculated daily and paid monthly, at an annual
rate of 0.69% of the Fund’s average daily net assets.
Under
the Advisory Agreement, the Adviser has agreed to pay all expenses incurred by
the Fund except for interest charges on any borrowings, dividends and other
expenses on securities sold short, taxes, brokerage commissions, and other
expenses incurred in placing orders for the purchase and sale of securities and
other investment instruments, acquired fund fees and expenses, accrued deferred
tax liability, extraordinary expenses, distribution fees, and expenses paid by
the Fund under any distribution plan adopted pursuant to Rule 12b-1 under the
1940 Act, and the unified management fee payable to the Adviser (collectively,
the “Excluded Expenses”).
Investment
Sub-Adviser
ShariaPortfolio,
Inc. (the “Sub-Adviser”), 1331 International Pkwy, Suite 2291, Lake Mary,
Florida 32746, serves as investment sub-adviser to the Fund, pursuant to a
sub-advisory agreement between the Adviser and Sub-Adviser (the “Sub-Advisory
Agreement”). The Sub-Adviser is responsible for ensuring the Fund follows the
character of the Index and providing advice with regard to the interpretation of
and compliance with Sharia principles. For its services, the Sub-Adviser is paid
a fee by the Adviser, which fee is calculated daily and paid monthly, at an
annual rate of 0.02% of the Fund’s average daily net assets up to $500 million,
and 0.01% of the Fund’s average daily net assets thereafter.
The
Sub-Adviser also serves as the investment sub-adviser to the SP Funds Dow Jones
Global Sukuk ETF and the SP Funds S&P 500 Sharia Industry Exclusions ETF,
each a separate series of the Trust and currently offered in a separate
prospectus.
A
discussion regarding the basis for the Board’s approval of the Advisory
Agreement and Sub-Advisory Agreement will be available in the Fund’s first
semi-annual or annual report to shareholders.
Portfolio
Managers
Michael
Venuto, Chief Investment Officer at the Adviser
Mr.
Venuto is a co-founder and has been the Chief Investment Officer of the Adviser
since 2012. Mr. Venuto is an ETF industry veteran with over a decade of
experience in the design and implementation of ETF-based investment strategies.
Previously, he was Head of Investments at Global X Funds where he provided
portfolio optimization services to institutional clients. Before that, he was
Senior Vice President at Horizon Kinetics where his responsibilities included
new business development, investment strategy and client and strategic
initiatives.
Charles
A. Ragauss, CFA, Portfolio Manager at the Adviser
Mr.
Ragauss serves as Portfolio Manager at the Adviser, having joined the Adviser in
September 2020. Through the Adviser, Mr. Ragauss also provides support services
to CSat Investment Advisory, L.P., doing business as Exponential ETFs
(“Exponential”). Mr. Ragauss previously served as Chief Operating Officer and in
other roles at Exponential from April 2016 to September 2020. Previously, Mr.
Ragauss was Assistant Vice President at Huntington National Bank (“Huntington”),
where he was Product Manager for the Huntington Funds and Huntington Strategy
Shares ETFs, a combined fund complex of almost $4 billion in assets under
management. At Huntington, he led ETF development bringing to market some of the
first actively managed ETFs. Mr. Ragauss joined Huntington in 2010. Mr. Ragauss
attended Grand Valley State University where he received his Bachelor of
Business Administration in Finance and International Business, as well as a
minor in French. He is a member of both the National and West Michigan CFA
societies and holds the CFA designation.
Naushad
Virji, Chief Executive Officer at the Sub-Adviser
Mr.
Virji has been a portfolio manager of the Fund since its inception in 2020. Mr.
Virji launched the Sub-Adviser in 2014 and ShariaPortfolio Canada, Inc. in 2019.
He has also been Chief Executive Officer at Virji Investments, Inc., a
registered investment advisor firm, since 2003. Mr. Virji attended the
University of Florida where he received a degree in business administration.
The
Fund’s SAI provides additional information about each Portfolio Manager’s
compensation structure, other accounts that each Portfolio Manager manages, and
each Portfolio Manager’s ownership of Shares.
Fund
Sponsor
The
Adviser has entered into an Agreement with SP Funds Management, LLC (the “Fund
Sponsor”), under which the Fund Sponsor assumes the obligation of the Adviser to
pay all expenses of the Fund, except the sub-advisory fee payable to the
Sub-Adviser and the Excluded Expenses (such expenses of the Fund, except
Excluded Expenses, the “Unitary Expenses”). Such expenses incurred by the Fund
and paid by the Fund Sponsor include fees charged by Tidal ETF Services, LLC,
the
Fund’s
administrator and an affiliate of the Adviser. See the section of the SAI titled
“Administrator” for additional information about the Fund’s administrator. The
Fund Sponsor is controlled by, and is therefore an affiliated entity of, the
Sub-Adviser. Although the Fund Sponsor has agreed to be responsible for the
Unitary Expenses, the Adviser retains the ultimate obligation to the Fund to pay
such expenses. The Fund Sponsor will also provide general strategic support for
the Fund in the following areas: product development, capital markets, strategic
relationships and support of marketing and sales efforts. For these services and
payments, the Fund Sponsor is entitled to a fee based on the total management
fee earned by the Adviser under the Advisory Agreement less the Unitary Expenses
and certain start-up costs. The Fund Sponsor does not make investment decisions,
provide investment advice, or otherwise act in the capacity of an investment
adviser to the Fund. The Fund Sponsor is not involved in the maintenance of the
Index and does not act in the capacity of an index provider.
The
Fund issues and redeems Shares only in Creation Units at the NAV per share next
determined after receipt of an order from an AP. Only APs may acquire Shares
directly from the Fund, and only APs may tender their Shares for redemption
directly to the Fund, at NAV. APs must be a member or participant of a clearing
agency registered with the SEC and must execute a Participant Agreement that has
been agreed to by the Distributor (defined below), and that has been accepted by
the Fund’s transfer agent, with respect to purchases and redemptions of Creation
Units. Once created, Shares trade in the secondary market in quantities less
than a Creation Unit.
Most
investors buy and sell Shares in secondary market transactions through brokers.
Individual Shares are listed for trading on the secondary market on the Exchange
and can be bought and sold throughout the trading day like other publicly traded
securities.
When
buying or selling Shares through a broker, you will incur customary brokerage
commissions and charges, and you may pay some or all of the spread between the
bid and the offer price in the secondary market on each leg of a round trip
(purchase and sale) transaction. In addition, because secondary market
transactions occur at market prices, you may pay more than NAV when you buy
Shares, and receive less than NAV when you sell those Shares.
Book
Entry
Shares
are held in book-entry form, which means that no stock certificates are issued.
Depository Trust Company (“DTC”) or its nominee is the record owner of all
outstanding Shares.
Investors
owning Shares are beneficial owners as shown on the records of DTC or its
participants. DTC serves as the securities depository for all Shares. DTC’s
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and other institutions that directly or indirectly
maintain a custodial relationship with DTC. As a beneficial owner of Shares, you
are not entitled to receive physical delivery of stock certificates or to have
Shares registered in your name, and you are not considered a registered owner of
Shares. Therefore, to exercise any right as an owner of Shares, you must rely
upon the procedures of DTC and its participants. These procedures are the same
as those that apply to any other securities that you hold in book-entry or
“street name” through your brokerage account.
Frequent
Purchases and Redemptions of Shares
The
Fund imposes no restrictions on the frequency of purchases and redemptions of
Shares. In determining not to approve a written, established policy, the Board
evaluated the risks of market timing activities by Fund shareholders. Purchases
and redemptions by APs, who are the only parties that may purchase or redeem
Shares directly with the Fund, are an essential part of the ETF process and help
keep Share trading prices in line with NAV. As such, the Fund accommodates
frequent purchases and redemptions by APs. However, the Board has also
determined that frequent purchases and redemptions for cash may increase
tracking error and portfolio transaction costs and may lead to the realization
of capital gains. To minimize these potential consequences of frequent purchases
and redemptions, the Fund employs fair value pricing and may impose transaction
fees on purchases and redemptions of Creation Units to cover the custodial and
other costs incurred by the Fund in effecting trades. In addition, the Fund and
the Adviser reserve the right to reject any purchase order at any
time.
Determination
of Net Asset Value
The
Fund’s NAV is calculated as of the scheduled close of regular trading on the New
York Stock Exchange (“NYSE”), generally 4:00 p.m. Eastern Time, each day
the NYSE is open for business. The NAV for the Fund is calculated by dividing
the Fund’s net assets by its Shares outstanding.
In
calculating its NAV, the Fund generally values its assets on the basis of market
quotations, last sale prices, or estimates of value furnished by a pricing
service or brokers who make markets in such instruments. If such information is
not available for a security held by the Fund or is determined to be unreliable,
the security will be valued at fair value estimates under guidelines established
by the Board (as described below).
Fair
Value Pricing
The
Board has adopted procedures and methodologies to fair value Fund securities
whose market prices are not “readily available” or are deemed to be unreliable.
For example, such circumstances may arise when: (i) a security has been delisted
or has had its trading halted or suspended; (ii) a security’s primary pricing
source is unable or unwilling to provide a price; (iii) a security’s primary
trading market is closed during regular market hours; or (iv) a security’s value
is materially affected by events occurring after the close of the security’s
primary trading market. Generally, when fair valuing a security, the Fund will
take into account all reasonably available information that may be relevant to a
particular valuation including, but not limited to, fundamental analytical data
regarding the issuer, information relating to the issuer’s business, recent
trades or offers of the security, general and/or specific market conditions, and
the specific facts giving rise to the need to fair value the security. Fair
value determinations are made in good faith and in accordance with the fair
value methodologies included in the Board-adopted valuation procedures. Due to
the subjective and variable nature of fair value pricing, there can be no
assurance that the Adviser or the Sub-Adviser will be able to obtain the fair
value assigned to the security upon the sale of such security.
Investments
by Registered Investment Companies
Section 12(d)(1)
of the 1940 Act restricts investments by registered investment companies in the
securities of other investment companies, including Shares. Registered
investment companies are permitted to invest in the Fund beyond the limits set
forth in Section 12(d)(1), subject to certain terms and conditions set forth in
an SEC exemptive order issued to the Trust or rule under the 1940 Act, including
that such investment companies enter into an agreement with the
Fund.
Delivery
of Shareholder Documents – Householding
Householding
is an option available to certain investors of the Fund. Householding is a
method of delivery, based on the preference of the individual investor, in which
a single copy of certain shareholder documents can be delivered to investors who
share the same address, even if their accounts are registered under different
names. Householding for the Fund is available through certain broker-dealers. If
you are interested in enrolling in householding and receiving a single copy of
prospectuses and other shareholder documents, please contact your broker-dealer.
If you are currently enrolled in householding and wish to change your
householding status, please contact your broker-dealer.
Dividends
and Distributions
The
Fund intends to pay out its investment company taxable income, if any, monthly,
and distribute any net realized capital gains to its shareholders at least
annually. The Fund will declare and pay capital gain distributions, if any, in
cash. Distributions in cash may be reinvested automatically in additional whole
Shares only if the broker through whom you purchased Shares makes such option
available. Your broker is responsible for distributing the income and capital
gain distributions to you.
Because
the REITs in which the Fund invests do not provide complete information about
the taxability of their distributions until after the calendar year-end, the
Fund may not be able to determine how much of its distributions are taxable to
shareholders until after the January 31st deadline for issuing Form 1099-DIV. As
a result, the Fund may request permission from the Internal Revenue Service
(“IRS”) each year for an extension of time to issue Form 1099-DIV until February
28th.
Taxes
The
following discussion is a summary of some important U.S. federal income tax
considerations generally applicable to investments in the Fund. Your investment
in the Fund may have other tax implications. Please consult your tax advisor
about the tax consequences of an investment in Shares, including the possible
application of foreign, state, and local tax laws.
The
Fund intends to qualify each year for treatment as a regulated investment
company (a “RIC”) under the Internal Revenue Code of 1986, as amended. If it
meets certain minimum distribution requirements, a RIC is not subject to tax at
the fund level on income and gains from investments that are timely distributed
to shareholders. However, the Fund’s failure to qualify as a RIC or to meet
minimum distribution requirements would result (if certain relief provisions
were not available) in fund-level taxation and, consequently, a reduction in
income available for distribution to shareholders.
Unless
your investment in Shares is made through a tax-exempt entity or tax-advantaged
account, such as an IRA plan, you need to be aware of the possible tax
consequences when the Fund makes distributions, when you sell your Shares listed
on the Exchange, and when you purchase or redeem Creation Units (institutional
investors only).
The
tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax
Act”) made significant changes to the U.S. federal income tax rules for taxation
of individuals and corporations, generally effective for taxable years beginning
after
December
31, 2017. Many of the changes applicable to individuals are temporary and would
apply only to taxable years before January 1, 2026. There were only minor
changes with respect to the specific rules only applicable to RICs, such as the
Fund. The Tax Act, however, also made numerous other changes to the tax rules
that may affect shareholders and the Fund. The Coronavirus Aid, Relief, and
Economic Security Act (the “CARES Act”) modified certain changes to the U.S.
federal income tax rules made by the Tax Act which may, in addition, affect
shareholders and the Fund. You are urged to consult with your own tax advisor
regarding how this legislation affects your investment in the Fund.
Taxes
on Distributions
For
federal income tax purposes, distributions of net investment income are
generally taxable as ordinary income or qualified dividend income. Taxes on
distributions of net capital gains (if any) are determined by how long the Fund
owned the investments that generated them, rather than how long a shareholder
has owned their Shares. Sales of assets held by the Fund for more than one year
generally result in long-term capital gains and losses, and sales of assets held
by the Fund for one year or less generally result in short-term capital gains
and losses. Distributions of the Fund’s net capital gain (the excess of net
long-term capital gains over net short-term capital losses) that are reported by
the Fund as capital gain dividends (“Capital Gain Dividends”) will be taxable as
long-term capital gains. Distributions of short-term capital gain will generally
be taxable as ordinary income. Dividends and distributions are generally taxable
to you whether you receive them in cash or reinvest them in additional
shares.
Distributions
reported by the Fund as “qualified dividend income” are generally taxed to
non-corporate shareholders at rates applicable to long-term capital gains,
provided certain holding period and other requirements are met. “Qualified
dividend income” generally is income derived from dividends paid by U.S.
corporations or certain foreign corporations that are either incorporated in a
U.S. possession or eligible for tax benefits under certain U.S. income tax
treaties. In addition, dividends that the Fund receives in respect of stock of
certain foreign corporations may be qualified dividend income if that stock is
readily tradable on an established U.S. securities market. Corporate
shareholders may be entitled to a dividends-received deduction for the portion
of dividends they receive from the Fund that are attributable to dividends
received by the Fund from U.S. corporations, subject to certain limitations.
Shortly
after the close of each calendar year, you will be informed of the character of
any distributions received from the Fund.
In
addition to the federal income tax, certain individuals, trusts, and estates may
be subject to a Net Investment Income (“NII”) tax of 3.8%. The NII tax is
imposed on the lesser of: (i) a taxpayer’s investment income, net of deductions
properly allocable to such income; or (ii) the amount by which such taxpayer’s
modified adjusted gross income exceeds certain thresholds ($250,000 for married
individuals filing jointly, $200,000 for unmarried individuals and $125,000 for
married individuals filing separately). The Fund’s distributions are
includable in a shareholder’s investment income for purposes of this NII
tax. In addition, any capital gain realized by a shareholder upon a sale,
exchange, or redemption of Fund shares is includable in such shareholder’s
investment income for purposes of this NII tax.
In
general, your distributions are subject to federal income tax for the year in
which they are paid. Certain distributions paid in January, however, may be
treated as paid on December 31 of the prior year. Distributions are generally
taxable even if they are paid from income or gains earned by the Fund before
your investment (and thus were included in the Shares’ NAV when you purchased
your Shares).
You
may wish to avoid investing in the Fund shortly before a dividend or other
distribution, because such a distribution will generally be taxable even though
it may economically represent a return of a portion of your
investment.
If
you are neither a resident nor a citizen of the United States or if you are a
foreign entity, distributions (other than Capital Gain Dividends) paid to you by
the Fund will generally be subject to a U.S. withholding tax at the rate of 30%,
unless a lower treaty rate applies. The Fund may, under certain circumstances,
report all or a portion of a dividend as an “interest-related dividend” or a
“short-term capital gain dividend,” which would generally be exempt from this
30% U.S. withholding tax, provided certain other requirements are
met.
Under
the Foreign Account Tax Compliance Act (“FATCA”), the Fund may be required to
withhold a generally nonrefundable 30% tax on (i) distributions of investment
company taxable income and (ii) distributions of net capital gain and the gross
proceeds of a sale or redemption of Fund shares paid to (A) certain “foreign
financial institutions” unless such foreign financial institution agrees to
verify, monitor, and report to the IRS the identity of certain of its
account-holders, among other items (or unless such entity is otherwise deemed
compliant under the terms of an intergovernmental agreement between the United
States and the foreign financial institution’s country of residence), and (B)
certain “non-financial foreign entities” unless such entity certifies to the
Fund that it does not have any substantial U.S. owners or provides the name,
address, and taxpayer identification number of each substantial U.S. owner,
among other items. In December 2018, the IRS
and
Treasury Department released proposed Treasury Regulations that would eliminate
FATCA withholding on Fund distributions of net capital gain and the gross
proceeds from a sale or redemption of Fund shares. Although taxpayers are
entitled to rely on these proposed Treasury Regulations until final Treasury
Regulations are issued, these proposed Treasury Regulations have not been
finalized, may not be finalized in their proposed form, and are potentially
subject to change. This FATCA withholding tax could also affect the Fund’s
return on its investments in foreign securities or affect a shareholder’s return
if the shareholder holds its Fund shares through a foreign intermediary. You are
urged to consult your tax adviser regarding the application of this FATCA
withholding tax to your investment in the Fund and the potential certification,
compliance, due diligence, reporting, and withholding obligations to which you
may become subject in order to avoid this withholding tax.
The
Fund (or a financial intermediary, such as a broker, through which a shareholder
owns Shares) generally is required to withhold and remit to the U.S. Treasury a
percentage of the taxable distributions and sale or redemption proceeds paid to
any shareholder who fails to properly furnish a correct taxpayer identification
number, who has underreported dividend or interest income, or who fails to
certify that they are not subject to such withholding.
Taxes
When Shares are Sold on the Exchange
Any
capital gain or loss realized upon a sale of Shares generally is treated as a
long-term capital gain or loss if Shares have been held for more than one year
and as a short-term capital gain or loss if Shares have been held for one year
or less. However, any capital loss on a sale of Shares held for six months or
less is treated as long-term capital loss to the extent of Capital Gain
Dividends paid with respect to such Shares. Any loss realized on a sale will be
disallowed to the extent Shares are acquired, including through reinvestment of
dividends, within a 61-day period beginning 30 days before and ending 30 days
after the sale of Shares.
Taxes
on Purchases and Redemptions of Creation Units
An
AP having the U.S. dollar as its functional currency for U.S. federal income tax
purposes who exchanges securities for Creation Units generally recognizes a gain
or a loss. The gain or loss will be equal to the difference between the value of
the Creation Units at the time of the exchange and the exchanging AP’s aggregate
basis in the securities delivered plus the amount of any cash paid for the
Creation Units. An AP who exchanges Creation Units for securities will generally
recognize a gain or loss equal to the difference between the exchanging AP’s
basis in the Creation Units and the aggregate U.S. dollar market value of the
securities received, plus any cash received for such Creation Units. The IRS may
assert, however, that a loss that is realized upon an exchange of securities for
Creation Units may not be currently deducted under the rules governing “wash
sales” (for an AP who does not mark-to-market their holdings) or on the basis
that there has been no significant change in economic position. Persons
exchanging securities should consult their own tax advisor with respect to
whether wash sale rules apply and when a loss might be deductible.
Any
capital gain or loss realized upon redemption of Creation Units is generally
treated as long-term capital gain or loss if Shares comprising the Creation
Units have been held for more than one year and as a short-term capital gain or
loss if such Shares have been held for one year or less.
The
Fund may include a payment of cash in addition to, or in place of, the delivery
of a basket of securities upon the redemption of Creation Units. The Fund may
sell portfolio securities to obtain the cash needed to distribute redemption
proceeds. This may cause the Fund to recognize investment income and/or capital
gains or losses that it might not have recognized if it had completely satisfied
the redemption in-kind. As a result, the Fund may be less tax efficient if it
includes such a cash payment in the proceeds paid upon the redemption of
Creation Units.
Taxation
of REIT Investments
The
Fund will invest in REITs. The Tax Act treats “qualified REIT dividends” (i.e.,
ordinary REIT dividends other than capital gain dividends and portions of REIT
dividends designated as qualified dividend income eligible for capital gain tax
rates) as eligible for a 20% deduction by non-corporate taxpayers. In general,
qualified REIT dividends that an investor receives directly from a REIT are
automatically eligible for the 20% qualified business income deduction. The IRS
has issued final Treasury Regulations that permit a dividend or part of a
dividend paid by a RIC and reported as a “section 199A dividend” to be treated
by the recipient as a qualified REIT dividend for purposes of the 20% qualified
business income deduction, if certain holding period and other requirements have
been satisfied by the recipient with respect to its Fund shares.
Foreign
Investments by the Fund
Interest
and other income received by the Fund with respect to foreign securities may
give rise to withholding and other taxes imposed by foreign countries. Tax
treaties or conventions between certain countries and the United States may
reduce or eliminate such taxes. If, as of the close of a taxable year, more than
50% of the value of the Fund’s assets consists of certain
foreign
stock or securities, the Fund will be eligible to elect to “pass through” to
investors the amount of certain qualifying foreign income and similar taxes paid
by the Fund during that taxable year. This means that investors would be
considered to have received as additional income their respective shares of such
foreign taxes, but may be entitled to either a corresponding tax deduction in
calculating taxable income, or, subject to certain limitations, a credit in
calculating federal income tax. If the Fund does not so elect, the Fund will be
entitled to claim a deduction for certain foreign taxes incurred by the Fund.
The Fund (or its administrative agent) will notify you if it makes such an
election and provide you with the information necessary to reflect foreign taxes
paid on your income tax return.
The
foregoing discussion summarizes some of the possible consequences under current
federal tax law of an investment in the Fund. It is not a substitute for
personal tax advice. You also may be subject to foreign, state, and local tax on
Fund distributions and sales of Shares. Consult your personal tax advisor about
the potential tax consequences of an investment in Shares
under
all applicable tax laws. For more information, please see the section entitled
“Federal Income Taxes” in the SAI.
Foreside
Fund Services, LLC (the “Distributor”), the Fund’s distributor, is a
broker-dealer registered with the SEC. The Distributor distributes Creation
Units for the Fund on an agency basis and does not maintain a secondary market
in Shares. The Distributor has no role in determining the policies of the Fund
or the securities that are purchased or sold by the Fund. The Distributor’s
principal address is Three Canal Plaza, Suite 100, Portland, Maine
04101.
The
Board has adopted a Distribution (Rule 12b-1) Plan (the “Plan”) pursuant to Rule
12b-1 under the 1940 Act. In accordance with the Plan, the Fund is authorized to
pay an amount up to 0.25% of its average daily net assets each year for certain
distribution-related activities and shareholder services.
No
Rule 12b-1 fees are currently paid by the Fund, and there are no plans to impose
these fees. However, in the event Rule 12b-1 fees are charged in the future,
because the fees are paid out of Fund assets on an ongoing basis, over time
these fees will increase the cost of your investment and may cost you more than
certain other types of sales charges.
When
available, information regarding how often Shares traded on the Exchange at a
price above (i.e., at a premium) or below (i.e., at a discount) the NAV of the
Fund can be found on the Fund’s website at www.sp-funds.com.
Shares
are not sponsored, endorsed, or promoted by the Exchange. The Exchange is not
responsible for, nor has it participated in the determination of, the timing,
prices, or quantities of Shares to be issued, nor in the determination or
calculation of the equation by which Shares are redeemable. The Exchange has no
obligation or liability to owners of Shares in connection with the
administration, marketing, or trading of Shares.
Without
limiting any of the foregoing, in no event shall the Exchange have any liability
for any lost profits or indirect, punitive, special, or consequential damages
even if notified of the possibility thereof.
The
Adviser, the Sub-Adviser, and the Fund make no representation or warranty,
express or implied, to the owners of Shares or any member of the public
regarding the advisability of investing in securities generally or in the Fund
particularly.
The
Index is a product of S&P Dow Jones Indices LLC, a division of S&P
Global, or its affiliates (“SPDJI”), and has been licensed for use by the
Adviser. Standard & Poor’s®
and S&P®
are registered trademarks of Standard & Poor’s Financial Services LLC
(“S&P”); Dow Jones®
is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and
these trademarks have been licensed for use by SPDJI and sublicensed for certain
purposes by the Adviser. It is not possible to invest directly in an index. The
Fund is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P,
any of their respective affiliates (collectively, “S&P Dow Jones Indices”).
S&P Dow Jones Indices makes no representation or warranty, express or
implied, to the owners of the Fund or any member of the public regarding the
advisability of investing in securities generally or in the Fund particularly.
Past performance of an index is not an indication or guarantee of future
results. S&P Dow Jones Indices’ only relationship to the Adviser with
respect to the Index is the licensing of the Index and certain trademarks,
service marks and/or trade names of S&P Dow Jones Indices and/or its
licensors. The Index is determined, composed and calculated by S&P Dow Jones
Indices without regard to the Adviser or the Fund. S&P Dow Jones Indices has
no obligation to take the needs of the Adviser or the owners of the Fund into
consideration in determining, composing or calculating the Index. S&P Dow
Jones Indices is not responsible for and has not participated in the
determination of the prices, and amount of shares of the Fund or the timing of
the issuance or sale of shares of the Fund or in the determination or
calculation of the equation by which shares of the Fund are to be converted into
cash, surrendered or redeemed, as the case may be. S&P Dow Jones Indices has
no obligation or liability in connection with the administration,
marketing
or trading of the Fund. There is no assurance that investment products based on
the Index will accurately track index performance or provide positive investment
returns. S&P Dow Jones Indices LLC is not an investment or tax advisor. A
tax advisor should be consulted to evaluate the impact of any tax-exempt
securities on portfolios and the tax consequences of making any particular
investment decision. Inclusion of a security within an index is not a
recommendation by S&P Dow Jones Indices to buy, sell, or hold such security,
nor is it considered to be investment advice.
S&P
DOW JONES INDICES DOES NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR
THE COMPLETENESS OF THE INDEX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION,
INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING
ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL
NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS
THEREIN. S&P DOW JONES INDICES MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND
EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY THE ADVISER, OWNERS
OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR WITH
RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN
NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT,
SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT
LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY
HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT,
STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY
AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND THE ADVISER,
OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.
This
section would ordinarily include Financial Highlights. The Financial Highlights
table is intended to help you understand the Fund’s performance for the Fund’s
periods of operations. Because the Fund has not yet commenced operations as of
the date of this Prospectus, no Financial Highlights are shown.
SP
Funds S&P Global REIT Sharia ETF
|
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Adviser |
Toroso
Investments, LLC
898
N. Broadway, Suite 2
Massapequa,
New York 11758 |
Administrator |
Tidal
ETF Services LLC
898
N. Broadway, Suite 2
Massapequa,
New York 11758 |
Sub-Adviser |
ShariaPortfolio,
Inc.
1331
International Pkwy
Suite
2291
Lake
Mary, Florida 32746 |
Distributor |
Foreside
Fund Services, LLC
Three
Canal Plaza, Suite 100
Portland,
Maine 04101 |
Custodian |
U.S.
Bank National Association
1555
N. Rivercenter Dr.
Milwaukee,
Wisconsin 53212 |
Independent
Registered Public Accounting Firm |
Tait,
Weller & Baker LLP
Two
Liberty Place
50
S. 16th Street, 29th Floor
Philadelphia,
Pennsylvania 19102 |
Sub-Administrator,
Fund Accountant, and Transfer Agent |
U.S.
Bancorp Fund Services, LLC,
doing
business as U.S. Bank Global Fund Services
615
East Michigan Street
Milwaukee,
Wisconsin 53202 |
Legal
Counsel |
Godfrey
& Kahn, S.C.
833
East Michigan Street, Suite 1800
Milwaukee,
Wisconsin 53202 |
Investors
may find more information about the Fund in the following documents:
Statement
of Additional Information: The
Fund’s SAI provides additional details about the investments of the Fund and
certain other additional information. A current SAI dated December 27, 2020, as
supplemented from time to time, is on file with the SEC and is herein
incorporated by reference into this Prospectus. It is legally considered a part
of this Prospectus.
Annual/Semi-Annual
Reports: Additional
information about the Fund’s investments will be available in the Fund’s annual
and semi-annual reports to shareholders. In the annual report you will find a
discussion of the market conditions and investment strategies that significantly
affected the Fund’s performance after the first fiscal year the Fund is in
operation.
You
can obtain free copies of these documents, when available, request other
information or make general inquiries about the Fund by contacting the Fund at
SP Funds, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee, Wisconsin
53201-0701 or calling 425-409-9500.
Shareholder
reports, the Fund’s current Prospectus and SAI and other information about the
Fund are also available:
•Free
of charge from the SEC’s EDGAR database on the SEC’s website at
http://www.sec.gov; or
•Free
of charge from the Fund’s Internet website at www.sp-funds.com; or
(SEC
Investment Company Act File No. 811-23377)