PROSPECTUS
April 30,
2022
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Ticker
Symbol |
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TIMOTHY PLAN US SMALL CAP CORE
ETF |
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TPSC |
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TIMOTHY PLAN US LARGE/MID CAP CORE
ETF |
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TPLC |
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TIMOTHY PLAN HIGH DIVIDEND STOCK
ETF |
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TPHD |
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TIMOTHY PLAN INTERNATIONAL ETF |
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TPIF |
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TIMOTHY PLAN US LARGE/MID CAP CORE ENHANCED
ETF |
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TPLE |
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TIMOTHY PLAN HIGH DIVIDEND STOCK ENHANCED
ETF |
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TPHE |
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Listed
and traded on: The New York Stock Exchange
This Prospectus Offers Timothy Plan ETFs
The
Timothy Plan believes that it has a responsibility to invest in a moral and
ethical manner. Accordingly, our ETFs do not invest in companies that are
involved in the production or wholesale distribution of alcohol, tobacco, or
gambling equipment, gambling enterprises or which are involved, either directly
or indirectly, in abortion or pornography, or promoting anti-family
entertainment or non‑biblical lifestyles. Securities issued by companies engaged
in these prohibited activities are excluded from the ETF portfolios and are
referred to throughout this Prospectus as “Excluded Securities”.
Under
a strict filtering policy, Excluded Securities will not knowingly be purchased
by any of the Timothy Plan ETF’s. Timothy Partners, Ltd. (“TPL”) is responsible
for determining those securities that are Excluded Securities, and reserves the
right to exclude investments, in its best judgment, in other companies whose
practices may not fall within the exclusions described above, but nevertheless
could be found offensive to basic, traditional Judeo-Christian values. The
Indices upon which the Funds are based are designed to omit Excluded Securities.
However, each index is rebalanced only twice each year, so if a company whose
securities are being held by one of our Funds is discovered to be engaged in a
prohibited practice, that security will remain in the portfolio until the next
bi‑annual reevaluation of portfolio holdings, and will then be liquidated.
Timothy
Plan
1‑800‑846‑7526
THE
SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THE FUNDS’
SECURITIES OR DETERMINED WHETHER THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Table of Contents
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Section 1 | Fund Summaries
Timothy Plan US Small Cap Core
ETF
INVESTMENT OBJECTIVE
The
Fund seeks to provide investment results that track the performance of the
Victory US Small Cap Volatility Weighted BRI Index before fees and expenses.
FEES AND EXPENSES OF THE
FUND
This
table describes the fees and expenses that you may pay if you buy and hold
shares (“Shares”) of the Fund. Investors may incur usual or customary brokerage
commissions and other charges on their purchases and sales of Shares of the Fund
in the secondary market, which are not reflected in the table or the example
below.
SHAREHOLDER FEES
(fees paid
directly from your investment)
NONE
ANNUAL FUND OPERATING
EXPENSES
(expenses that you pay
each year as a percentage of the value of your investment)
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MANAGEMENT
FEES |
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0.52% |
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Total
Annual Operating Expenses |
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0.52% |
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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. Although your actual costs may be higher or lower, based upon
these assumptions your costs would be:
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1 YEAR |
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3 YEARS |
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5 YEARS |
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10 YEARS |
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$53 |
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$167 |
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$291 |
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$653 |
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 will
generally indicate higher transaction costs resulting in higher taxes when
Shares
are held in a taxable account. These costs, which are not reflected in annual
Fund operating expenses or in the Example, affect the Fund’s performance. During
the Fund’s most recent fiscal year, the Fund’s portfolio turnover rate was
57% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund seeks to achieve its investment objective by investing, under normal market
conditions, at least 80% of its net assets directly or indirectly in the
securities included in the Victory US Small Cap Volatility Weighted BRI Index
(the “Index”), an unmanaged, volatility weighted index created by the Fund’s
Sub‑Advisor. A volatility weighted index assigns percentage values to each
security in the index based on the volatility of that security in the market.
More volatile stocks have a lower weighting, and less volatile stocks are
assigned a higher weighting.
The
Index combines fundamental criteria with individual security risk control
achieved through volatility weighting of individual securities, rather than
traditional market‑cap weighting. Such a methodology is sometimes referred to as
“Smart Beta.” The Index follows a proprietary rules-based methodology, developed
by the Fund’s sub‑adviser, to construct its constituent securities.
The
Index universe begins with the stocks included in the Nasdaq Victory US Small
Cap 500 Volatility Weighted Index, a volatility weighted index comprised of the
500 largest U.S. companies with market capitalizations of less than
$3 billion with positive earnings in each of the four most recent quarters.
The
Index then eliminates the companies that do not satisfy the eVALUEator
proprietary Biblically Responsible Investing (“BRI”) filtering criteria
(“Excluded Securities”). The Advisor maintains the list of Excluded Securities
identified by the eVALUEator system.
The
Index is reconstituted every April and October (based on information as of the
prior month‑end) and is adjusted to limit exposure to any particular sector to
25%. As of March 31, 2021, the Index had a market capitalization range from
$ 198 million to $ 4.6 billion.
The
Fund will not knowingly invest in Excluded Securities. Excluded Securities are
securities issued by any company that is involved in the production or wholesale
distribution of alcohol, tobacco, or gambling equipment, gambling enterprises,
or which is involved, either directly or indirectly, in abortion or pornography,
or promoting anti-family entertainment or non‑biblical lifestyles. The Fund also
reserves the right to exclude investments, in its best judgement, in other
companies whose practices may not fall within the exclusions described above,
but can be found offensive to basic, traditional Judeo-Christian values.
The
Fund generally seeks to track the returns of the Index before fees and expenses
by employing a replication strategy that seeks to hold all of the stocks in the
Index. A replication strategy means that the Fund seeks to hold all of the
securities included in its index, in approximately the percentages represented
by the securities in the index.
PRINCIPAL RISKS OF
INVESTING IN THE FUND
The
Fund’s investments are subject to the following principal risks:
Excluded Security Risk. Because the Index omits
Excluded Securities, the Fund may be riskier than other funds that invest in a
broader array of securities. BRI may not be successful. Because the Index is
reconstituted only at prescribed times during the year, the Fund may temporarily
hold securities that do not comply with the BRI filtering criteria if the
application of the criteria or the nature of a company’s business changes in
between these dates.
Equity Risk. The value of the equity securities
in which the Fund invests may decline in response to developments affecting
individual companies and/or general economic conditions. Price changes may be
temporary or last for extended periods.
ETF Structure Risks. The Fund is structured as
an exchange-traded fund (“ETF”) and as a result is subject to special risks,
including:
Not Individually
Redeemable. The Fund’s shares (“Shares”) are not
individually redeemable and may be redeemed by the Fund at its net asset value
per share (“NAV”) only in large blocks known as “Creation Units.” You may incur
brokerage costs purchasing enough Shares to constitute a Creation Unit.
Alternatively, you may redeem your Shares by selling them on the secondary
market at prevailing market
prices.
Trading
Issues. Trading in Shares on the Exchange (as defined
below) may be halted due to market conditions or for reasons that, in the view
of the Exchange, make trading in Shares inadvisable, such as extraordinary
market volatility. There can be no assurance that Shares will continue to meet
the listing requirements of the Exchange. There is no guarantee that an active
secondary market will develop for the Shares. In stressed market conditions, the
market for Shares may become less liquid in response to deteriorating liquidity
in the markets for the Fund’s underlying portfolio holdings, which may lead to
differences between the market price of the Shares and the underlying value of
those Shares.
Market Price Variance
Risk. The market prices of Shares will fluctuate in
response to changes in NAV and supply and demand for Shares and will include a
“bid‑ask spread” charged by the exchange specialists, market makers or other
participants that trade the particular security. There may be times when the
market price and the NAV vary significantly. This means that Shares may trade at
a premium or discount to NAV.
Authorized Participants
Concentration Risk. A limited number of financial
institutions may be responsible for all or a significant portion of the creation
and redemption activity for the Fund. If these firms exit the business or are
unable or unwilling to process creation and/or redemption orders, Shares may
trade at a premium or discount to
NAV.
Intraday Indicative
Value (IIV) Risk.
The Exchange intends to disseminate the approximate per share value of the
Fund’s published basket of securities (“Deposit Securities”) every 15 seconds
(the “intraday indicative value” or “IIV’’). The IIV is not a “real-time” update
of the NAV per share of the Fund because the IIV may not be calculated in the
same manner as the NAV. For example, the calculation of the NAV may be subject
to fair valuation at different prices than those used in the calculations of the
IIV and, unlike the calculation of NAV, the IIV does not take into account Fund
expenses. In addition, the IIV is based on the published Deposit Securities and
not on the Fund’s actual holdings.
Liquidity Risk. In certain circumstances, such
as the disruption of the orderly markets for the securities in which the Fund
invests, the Fund might not be able to dispose of certain holdings quickly or at
prices that represent true market value in the judgment of the Sub‑Advisor.
Markets for the securities in which the Fund invests may be disrupted by a
number of events, including but not limited to economic crises, natural
disasters, new legislation, or regulatory changes, and may prevent the Fund from
limiting losses, realizing gains or achieving a high correlation with the
Index.
Passive Investment Risk. The Fund is not
actively managed and does not, therefore, seek returns in excess of the Index.
The Sub‑Advisor will not buy or sell shares of an equity security due to current
or projected performance of a security, industry or sector, unless that security
is added to or removed, respectively, from the
Index.
Small Capitalization Stock Risk. The earnings
and prospects of small‑cap companies are more volatile than larger companies.
Small‑cap companies normally have a lower trading volume than larger companies,
which may tend to make their market price fall more disproportionately than
larger companies in response to selling pressures. Small‑cap companies may have
limited markets, product lines, or financial resources and lack management
experience and may experience higher failure rates than larger
companies.
Stock Market Risk. Overall stock market risks
may affect the value of the Fund. Factors such as domestic and international
economic growth and market conditions, interest rate levels and political events
affect the securities markets.
Tracking Risks. The Fund’s return may not match
the return of the Index for a number of reasons, including: the Fund incurs
operating expenses not applicable to the Index and incurs costs in buying and
selling securities; the Fund may not be fully invested at times; differences in
the valuation of securities; and differences between the Fund’s portfolio and
the Index resulting from legal restrictions, cost, or liquidity
constraints.
You may lose money by investing in the
Fund. There is no guarantee that the Fund will achieve
its objective.
By
itself, the Fund does not constitute a complete investment plan and should be
considered a long-term investment for investors who can afford to weather
changes in the value of their
investment.
PAST PERFORMANCE
The following bar chart and table provide some
indication of the risks of investing in the Fund by showing the variability of
the Fund’s performance from year to year and by comparing the Fund’s performance
to a broad based index. The
Fund’s past performance (before and after taxes) is not necessarily an
indication of how the Fund will perform in the future. More
up‑to‑date returns are available on the Fund’s website at etf.timothyplan.com, or by calling
the Fund at (800)
846‑7526.
Year‑by‑year Annual Total Returns
(for calendar years ending on December 31)
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BEST
QUARTER |
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WORST
QUARTER |
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Dec‑20 |
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Mar‑20 |
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31.26% |
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-32.52% |
Average Annual Total Returns
(for periods ending on December 31, 2021)
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TIMOTHY PLAN US SMALL CAP CORE
ETF |
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1 YEAR |
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INCEPTION* |
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Return before taxes |
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29.62% |
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20.51% |
Return after taxes on distributions
(1) |
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29.25% |
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20.14% |
Return after taxes on distributions and sale of
shares (1) |
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17.77% |
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15.90% |
Victory US Small Cap
Volatility Weighted BRI Index (2) (reflects no deduction for fees,
expenses or taxes) |
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30.44% |
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20.71% |
Russell 2000 Index(3) |
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14.82% |
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18.20% |
(1) |
After‑tax returns are calculated using the
historical highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes.
After‑tax returns depend on an investor’s
tax situation and may differ from those shown. After‑tax returns shown are
not relevant to investors who hold their Fund shares through tax‑deferred
arrangements, such as 401(k) plans or individual retirement
accounts. |
(2) |
Victory
US Small Cap Volatility Weighted BRI Index is an unmanaged, volatility
weighted index created by the Fund’s Sub‑Advisor. A volatility weighted
index assigns percentage values to each security in the index based on the
volatility of that security in the market. More volatile stocks have a
lower weighting, and less volatile stocks are assigned a higher weighting.
The Index assumes reinvestment of all dividends and distributions and does
not reflect any asset-based charges for investment management or other
expenses. |
(3) |
The
Russell 2000© Index
is a market capitalization-weighted index that measures the performance of
the 2000 smallest US stocks in the Russell 3000© Index, as measured by
market capitalization. |
INVESTMENT ADVISOR
Timothy
Partners, Ltd. has served as the Fund’s investment adviser since the Fund
commenced operations on December 2, 2019.
SUB‑ADVISOR
Victory
Capital Management Inc. (“Victory Capital” or the “Sub‑Advisor”) through its
Victory Solutions team, has served as the Fund’s Sub‑Advisor since the Fund
commenced operations on December 2, 2019.
PORTFOLIO MANAGERS
Mannik
Dhillon is President of Victory Capital’s VictoryShares and Solutions platform
and has been a Portfolio Manager of the Fund since it commenced operations on
December 2, 2019.
Free
Foutz is the Portfolio Implementation Manager for Victory Capital’s
VictoryShares and Solutions platform and has been a Portfolio Manager of the
Fund since it commenced operations on December 2, 2019.
PURCHASE AND SALE OF
SHARES
The
Fund issues and redeems Shares at NAV only in large blocks of 50,000 Shares
(each block of Shares is called a “Creation Unit”). Creation Units are issued
and redeemed for cash and/or in‑kind for securities by Authorized Participants
(“APs”) that have entered into agreements with the Fund’s distributor.
Individual Shares may only be purchased and sold through brokers in secondary
market transactions on The New York Stock Exchange (the “Exchange”). Except when
aggregated in Creation Units, Shares are not redeemable securities of the Fund.
Shares
of the Fund will be listed for trading on the Exchange and will trade at market
prices rather than NAV. Shares of the Fund may trade at a price that is greater
than (a premium), at, or less than (a discount) NAV.
TAX INFORMATION
The
Fund’s distributions generally are taxable as ordinary income, qualified
dividend income or capital gains. A sale of Shares may result in capital gain or
loss.
PAYMENT TO BROKER-DEALERS
AND OTHER FINANCIAL INTERMEDIARIES
If
you purchase Shares through a broker-dealer or other financial intermediary
(such as a bank), the Fund and its related companies may pay the intermediary
for the sale of Shares and related services. These payments may create a
conflict of interest by influencing the broker-dealer or other intermediary and
your salesperson to recommend the Fund over another investment. Ask your
salesperson or visit your financial intermediary’s website for more information.
Timothy Plan US Large/Mid Cap Core
ETF
INVESTMENT OBJECTIVE
The
Fund seeks to provide investment results that track the performance of the
Victory US Large/Mid Cap Volatility Weighted BRI Index before fees and
expenses.
FEES AND EXPENSES OF THE
FUND
This
table describes the fees and expenses that you may pay if you buy and hold
shares (“Shares”) of the Fund. Investors may incur usual or customary brokerage
commissions and other charges on their purchases and sales of Shares of the Fund
in the secondary market, which are not reflected in the table or the example
below.
SHAREHOLDER FEES
(fees paid directly from
your investment)
NONE
ANNUAL FUND OPERATING
EXPENSES
(expenses that you pay
each year as a percentage of the value of your investment)
|
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|
|
|
|
MANAGEMENT
FEES |
|
|
0.52% |
|
|
|
Total
Annual Operating Expenses |
|
|
0.52% |
|
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. Although your actual costs may be higher or lower, based upon
these assumptions your costs would be:
|
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|
|
|
|
|
|
|
|
|
1 YEAR |
|
3 YEARS |
|
5 YEARS |
|
10 YEARS |
|
|
|
|
$53 |
|
$167 |
|
$291 |
|
$653 |
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 will
generally indicate higher transaction costs resulting in higher taxes when
Shares are held in a taxable account. These costs, which are not reflected in
annual Fund operating expenses or in the Example, affect the Fund’s performance.
During the Fund’s most recent fiscal year, the Fund’s portfolio turnover rate
was 27% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund seeks to achieve its investment objective by investing, under normal market
conditions, at least 80% of its net assets directly or indirectly in the
securities included in the Victory US Large/Mid Cap Volatility Weighted BRI
Index (the “Index”), an unmanaged, volatility weighted index created by the
Sub‑Advisor. A volatility weighted index assigns percentage values to each
security in the Index based on the volatility of that security in the market.
More volatile stocks have a lower weighting, and less volatile stocks are
assigned a higher weighting.
The
Index combines fundamental criteria with individual security risk control
achieved through volatility weighting of individual securities, rather than
traditional market‑cap weighting. Such a methodology is sometimes referred to as
“Smart Beta.” The Index follows a proprietary rules-based methodology, developed
by the Sub‑advisor, to construct its constituent securities.
The
Index universe begins with the stocks included in the Nasdaq Victory US Large
Cap 500 Volatility Weighted Index, a volatility weighted index comprised of the
500 largest U.S. companies by market capitalization with positive earnings in
each of the four most recent quarters. The Index then eliminates the companies
that do not satisfy the eVALUEator proprietary Biblically Responsible Investing
(“BRI”) filtering criteria (“Excluded Securities”). The Advisor maintains the
list of Excluded Securities identified by the eVALUEator system.
The
Index is reconstituted every April and October (based on information as of the
prior month‑end) and is adjusted to limit exposure to any particular sector to
25%. As of March 31, 2022, the Index had a market capitalization range from
$ 415 billion to $ 1.1 trillion.
The
Fund will not knowingly invest in Excluded Securities. Excluded Securities are
securities issued by any company that is involved in the production or wholesale
distribution of alcohol, tobacco, or gambling equipment, gambling enterprises,
or which is involved, either directly or indirectly, in abortion or pornography,
or promoting anti-family entertainment or non‑biblical lifestyles.
The
Fund generally seeks to track the returns of the Index before fees and expenses
by employing a replication strategy that seeks to hold all of the stocks in the
Index, in approximately the percentages represented by the securities in the
Index.
PRINCIPAL RISKS OF
INVESTING IN THE FUND
The
Fund’s investments are subject to the following principal risks:
Excluded Security Risk. Because the Index omits
Excluded Securities, the Fund may be riskier than other funds that invest in a
broader array of securities. BRI may not be successful. Because the Index is
reconstituted only at prescribed times during the year, the Fund may temporarily
hold securities that do not comply with the BRI filtering criteria if the
application of the criteria or the nature of a company’s business changes in
between these dates.
Equity Risk. The value of the equity securities
in which the Fund invests may decline in response to developments affecting
individual companies and/or general economic conditions. Price changes may be
temporary or last for extended periods.
ETF Structure Risks. The Fund is structured as
an exchange-traded fund (“ETF”) and as a result is subject to special risks,
including:
Not Individually
Redeemable. The Fund’s shares (“Shares”) are not
individually redeemable and may be redeemed by the Fund at its net asset value
per share (“NAV”) only in large blocks known as “Creation Units.” You may incur
brokerage costs purchasing enough Shares to constitute a Creation Unit.
Alternatively, you may redeem your Shares by selling them on the secondary
market at prevailing market prices.
10
Trading
Issues. Trading in Shares on the Exchange (as defined
below) may be halted due to market conditions or for reasons that, in the view
of the Exchange, make trading in Shares inadvisable, such as extraordinary
market volatility. There can be no assurance that Shares will continue to meet
the listing requirements of the Exchange. There is no guarantee that an active
secondary market will develop for the Shares. In stressed market conditions, the
market for Shares may become less liquid in response to deteriorating liquidity
in the markets for the Fund’s underlying portfolio holdings, which may lead to
differences between the market price of the Shares and the underlying value of
those Shares.
Market Price Variance
Risk. The market prices of Shares will fluctuate in
response to changes in NAV and supply and demand for Shares and will include a
“bid‑ask spread” charged by the exchange specialists, market makers or other
participants that trade the particular security. There may be times when the
market price and the NAV vary significantly. This means that Shares may trade at
a premium or discount to NAV.
Authorized Participants
Concentration Risk. A limited number of financial
institutions may be responsible for all or a significant portion of the creation
and redemption activity for the Fund. If these firms exit the business or are
unable or unwilling to process creation and/or redemption orders, Shares may
trade at a premium or discount to
NAV.
Intraday Indicative Value
(IIV) Risk. The Exchange intends to disseminate the
approximate per share value of the Fund’s published basket of securities
(“Deposit Securities”) every 15 seconds (the “intraday indicative value” or
“IIV’’). The IIV is not a “real-time” update of the NAV per share of the Fund
because the IIV may not be calculated in the same manner as the NAV. For
example, the calculation of the NAV may be subject to fair valuation at
different prices than those used in the calculations of the IIV and, unlike the
calculation of NAV, the IIV does not take into account Fund expenses. In
addition, the IIV is based on the published Deposit Securities and not on the
Fund’s actual holdings.
Large Capitalization Stock Risk. The securities
of large cap companies may underperform the securities of smaller cap companies
or the market as a whole. Larger, more established companies may not respond as
quickly to competitive challenges (such as changes in technology and consumer
tastes) and their growth rate may lag those of smaller companies, especially
during periods of economic
expansion.
Smaller Capitalization Stock Risk. The earnings
and prospects of medium sized companies can be more volatile than larger
companies and they may experience higher failure rates than larger companies.
The stocks of medium sized companies may have a lower trading volume than larger
companies, which may tend to make their market price fall more
disproportionately than larger companies in response to selling
pressures.
Passive Investment Risk. The Fund is not
actively managed and does not, therefore, seek returns in excess of the Index.
The Advisor will not buy or sell shares of an equity security due to current or
projected performance of a security, industry, or sector, unless that security
is added to or removed, respectively, from the
Index.
Stock Market Risk. Overall stock market risks
may affect the value of the Fund. Factors such as domestic and international
economic growth and market conditions, interest rate levels and political events
affect the securities markets.
Tracking Risks. The Fund’s return may not match
the return of the Index for a number of reasons, including: the Fund incurs
operating expenses not applicable to the Index and incurs costs in buying and
selling securities; the Fund may not be fully invested at times; differences in
the valuation of securities; and differences between the Fund’s portfolio and
the Index resulting from legal restrictions, cost or liquidity
constraints.
You may lose money by investing in the
Fund. There is no guarantee that the Fund will achieve its
objective.
By
itself, the Fund does not constitute a complete investment plan and should be
considered a long-term investment for investors who can afford to weather
changes in the value of their investment.
PAST PERFORMANCE
The following bar chart and table provide some
indication of the risks of investing in the Fund by showing the variability of
the Fund’s performance from year to year and by comparing the Fund’s performance
to a broad based index. The
Fund’s past performance (before and after taxes) is not necessarily an
indication of how the Fund will perform in the future. More
up‑to‑date returns are available on the Fund’s website at etf.timothyplan.com, or by calling
the Fund at (800)
846‑7526.
Year‑by‑year Annual Total Returns
(for calendar years ending on December 31)
|
|
|
|
|
BEST
QUARTER |
|
WORST
QUARTER |
|
|
Jun‑20 |
|
Mar‑20 |
|
|
20.54% |
|
-24.00% |
Average Annual Total Returns
(for periods ending on December 31, 2021)
|
|
|
|
|
|
|
|
|
|
|
TIMOTHY PLAN US LARGE/MID CAP CORE
ETF |
|
1 YEAR |
|
INCEPTION* |
|
|
Return before taxes |
|
25.82% |
|
18.48% |
Return after taxes on distributions
(1) |
|
25.63% |
|
18.23% |
Return after taxes on distributions and sale of
shares (1) |
|
15.41% |
|
14.46% |
Victory US Large/Mid Cap Volatility Weighted BRI
Index (2)
(reflects no deduction for fees, expenses or
taxes) |
|
26.47% |
|
19.11% |
S&P 500 Index(3) |
|
28.71% |
|
21.80% |
(1) |
After‑tax returns are calculated using the
historical highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes.
After‑tax returns depend on an investor’s
tax situation and may differ from those shown. After‑tax returns shown are
not relevant to investors who hold their Fund shares through tax‑deferred
arrangements, such as 401(k) plans or individual retirement
accounts. |
(2) |
Victory US Large/Mid Cap Volatility
Weighted BRI Index is an unmanaged, volatility weighted index created by
the Fund’s Sub‑Advisor. A volatility weighted index assigns percentage
values to each security in the index based on the volatility of that
security in the market. More volatile stocks have a lower weighting, and
less volatile stocks are assigned a higher weighting. The Index assumes
reinvestment of all dividends and distributions and does not reflect any
asset-based charges for investment management or other
expenses. |
(3) |
The Standard & Poors 500
(“S&P 500”) Index is market capitalization-weighted index tracking the
performance of the 500 largest companies listed on stock exchanges in the
United States as measured by market
capitalization. |
INVESTMENT ADVISOR
Timothy
Partners, Ltd. has served as investment adviser to the Fund since its inception
on April 29, 2019.
SUB‑ADVISOR
Victory
Capital Management Inc. (“Victory Capital” or the “Sub‑Advisor”) through its
Victory Solutions team, has served as the Fund’s Sub‑Advisor since the Fund’s
inception on April 29, 2019.
PORTFOLIO MANAGERS
Mannik
Dhillon is President of Victory Capital’s VictoryShares and Solutions platform
and has been a Portfolio Manager of the Fund since April 2019.
Free
Foutz is the Portfolio Implementation Manager for Victory Capital’s
VictoryShares and Solutions platform and has been a Portfolio Manager of the
Fund since April 2019.
PURCHASE AND SALE OF
SHARES
The
Fund issues and redeems Shares at NAV only in large blocks of 50,000 Shares
(each block of Shares is called a “Creation Unit”). Creation Units are issued
and redeemed for cash and/or in‑kind for securities by Authorized Participants
(“APs”) that have entered into agreements with the Fund’s distributor.
Individual Shares may only be purchased and sold through brokers in secondary
market transactions on The New York Stock Exchange (the “Exchange”). Except when
aggregated in Creation Units, Shares are not redeemable securities of the Fund.
Shares
of the Fund will be listed for trading on the Exchange and will trade at market
prices rather than NAV. Shares of the Fund may trade at a price that is greater
than (a premium), at, or less than (a discount) NAV.
TAX INFORMATION
The
Fund’s distributions generally are taxable as ordinary income, qualified
dividend income or capital gains. A sale of Shares may result in capital gain or
loss.
PAYMENT TO BROKER-DEALERS
AND OTHER FINANCIAL INTERMEDIARIES
If
you purchase Shares through a broker-dealer or other financial intermediary
(such as a bank), the Fund and its related companies may pay the intermediary
for the sale of Shares and related services. These payments may create a
conflict of interest by influencing the broker-dealer or other intermediary and
your salesperson to recommend the Fund over another investment. Ask your
salesperson or visit your financial intermediary’s website for more information.
Timothy
Plan High Dividend Stock ETF
INVESTMENT OBJECTIVE
The
Fund seeks to provide investment results that track the performance of the
Victory US Large Cap High Dividend Volatility Weighted BRI Index (the “Index”)
before fees and expenses.
FEES AND EXPENSES OF THE
FUND
This
table describes the fees and expenses that you may pay if you buy and hold
shares (“Shares”) of the Fund. Investors may incur usual or customary brokerage
commissions and other charges on their purchases and sales of Shares of the Fund
in the secondary market, which are not reflected in the table or the example
below.
SHAREHOLDER FEES
(fees paid directly from
your investment)
NONE
ANNUAL FUND OPERATING
EXPENSES
(expenses that you pay
each year as a percentage of the value of your investment)
|
|
|
|
|
|
|
MANAGEMENT
FEES |
|
|
0.52% |
|
|
|
Total
Annual Operating Expenses |
|
|
0.52% |
|
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. Although your actual costs may be higher or lower, based upon
these assumptions your costs would be:
|
|
|
|
|
|
|
|
|
|
|
1 YEAR |
|
3 YEARS |
|
5 YEARS |
|
10 YEARS |
|
|
|
|
$53 |
|
$167 |
|
$291 |
|
$653 |
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 will
generally indicate higher transaction costs resulting in higher taxes when
Shares are held in a taxable account. These costs, which are not reflected in
annual Fund operating expenses or in the Example, affect the Fund’s performance.
During the Fund’s most recent fiscal period, the Fund’s portfolio turnover rate
was 43% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund seeks to achieve its investment objective by investing, under normal market
conditions, at least 80% of its net assets directly or indirectly in the
securities included in the Victory US Large Cap High Dividend Volatility
Weighted BRI Index (the “Index”), an unmanaged, volatility weighted index
created by the Sub‑Advisor. A volatility weighted index assigns percentage
values to each security in the Index based on the volatility of that security in
the market. More volatile stocks have a lower weighting, and less volatile
stocks are assigned a higher weighting.
The
Index combines fundamental criteria with individual security risk control
achieved through volatility weighting of individual securities, rather than
traditional market‑cap weighting. Such a methodology is sometimes referred to as
“Smart Beta.” The Index follows a proprietary rules-based methodology, developed
by the Fund’s sub‑adviser, to construct its constituent securities.
The
Index is comprised of the largest 100 dividend yielding stocks among the largest
U.S. companies by market capitalization from the Victory US Large/Mid Cap
Volatility Weighted BRI Index (“Parent Index”). The Parent Index universe begins
with the stocks included in the Nasdaq Victory US Large Cap 500 Volatility
Weighted Index, a volatility weighted index comprised of the 500 largest U.S.
companies by market capitalization with positive earnings in each of the four
most recent quarters. The Parent Index then eliminates the companies that do not
satisfy the eVALUEator proprietary Biblically Responsible Investing (“BRI”)
filtering criteria (“Excluded Securities”). The Advisor maintains the list of
Excluded Securities identified by the eVALUEator system.
The
100 highest dividend yielding stocks become the stocks included in the Index and
are weighted based on their daily standard deviation (volatility) of daily price
changes over the last 180 trading days. Stocks with lower volatility receive a
higher weighting and stocks with higher volatility receive a lower
weighting.
The
Index is reconstituted every April and October (based on information as of the
prior month‑end) and is adjusted to limit exposure to any particular sector to
25%. As of March 31, 2022, the Index had a market capitalization range from
$ 415 million to $ 258.2 billion.
The
Fund will not knowingly invest in Excluded Securities. Excluded Securities are
securities issued by any company that is involved in the production or wholesale
distribution of alcohol, tobacco, or gambling equipment, gambling enterprises,
or which is involved, either directly or indirectly, in abortion or pornography,
or promoting anti-family entertainment or non‑biblical lifestyles.
The
Fund generally seeks to track the returns of the Index before fees and expenses
by employing a replication strategy that seeks to hold all of the stocks in the
Index, in approximately the percentages represented by the securities in the
index.
PRINCIPAL RISKS OF
INVESTING IN THE FUND
The
Fund’s investments are subject to the following principal risks:
Excluded Security Risk. Because the Index omits
Excluded Securities, the Fund may be riskier than other funds that invest in a
broader array of securities. BRI may not be successful. Because the Index is
reconstituted only at prescribed times during the year, the Fund may temporarily
hold securities that do not comply with the BRI filtering criteria if the
application of the criteria or the nature of a company’s business changes in
between these dates.
Dividend Income Strategy Risk. The Fund’s high
dividend strategy may not be successful. Dividend paying stocks may fall out of
favor relative to the overall market.
Equity Risk. The value of the equity securities
in which the Fund invests may decline in response to developments affecting
individual companies and/or general economic conditions. Price changes may be
temporary or last for extended
periods.
ETF Structure Risks. The Fund is structured as
an exchange-traded fund (“ETF”) and as a result is subject to special risks,
including:
Not Individually
Redeemable. The
Fund’s Shares (“Shares”) are not individually redeemable and may be redeemed by
the Fund at its net asset value per share (“NAV”) only in large blocks known as
“Creation Units.” You may incur brokerage costs purchasing enough Shares to
constitute a Creation Unit. Alternatively, you may redeem your Shares by selling
them on the secondary market at prevailing market prices.
Trading
Issues. Trading in
Shares on the Exchange (as defined below) may be halted due to market conditions
or for reasons that, in the view of the Exchange, make trading in Shares
inadvisable, such as extraordinary market volatility. There can be no assurance
that Shares will continue to meet the listing requirements of the Exchange.
There is no guarantee that an active secondary market will develop for the
Shares. In stressed market conditions, the market for Shares may become less
liquid in response to deteriorating liquidity in the markets for the Fund’s
underlying portfolio holdings, which may lead to differences between the market
price of the Shares and the underlying value of those Shares.
Market Price Variance
Risk. The market
prices of Shares will fluctuate in response to changes in NAV and supply and
demand for Shares and will include a “bid‑ask spread” charged by the exchange
specialists, market makers or other participants that trade the particular
security. There may be times when the market price and the NAV vary
significantly. This means that Shares may trade at a premium or discount to NAV.
Authorized
Participants Concentration Risk. A limited number of financial institutions
may be responsible for all or a significant portion of the creation and
redemption activity for the Fund. If these firms exit the business or are unable
or unwilling to process creation and/or redemption orders, Shares may trade at a
premium or discount to NAV.
Intraday Indicative
Value (IIV) Risk.
The Exchange intends to disseminate the approximate per share value of the
Fund’s published basket of securities (“Deposit Securities”) every 15 seconds
(the “intraday indicative value” or “IIV’’). The IIV is not a “real-time” update
of the NAV per share of the Fund because the IIV may not be calculated in the
same manner as the NAV . For example, the calculation of the NAV may be subject
to fair valuation at different prices than those used in the calculations of the
IIV and, unlike the calculation of NAV , the IIV does not take into account Fund
expenses. In addition, the IIV is based on the published Deposit Securities and
not on the Fund’s actual holdings.
Large-Capitalization Stock Risk. The securities
of large cap companies may underperform the securities of smaller cap companies
or the market as a whole. The growth rate of larger, more established companies
may lag those of smaller companies, especially during periods of economic
expansion.
Passive Investment Risk. The Fund is not
actively managed and does not, therefore, seek returns in excess of the Index.
The Sub‑Advisor will not buy or sell shares of an equity security due to current
or projected performance of a security, industry or sector, unless that security
is added to or removed, respectively, from the
Index.
Stock Market Risk. Overall stock market risks
may affect the value of the Fund. Factors such as domestic and international
economic growth and market conditions, interest rate levels and political events
affect the securities markets.
Tracking Risks. The Fund’s return may not match
the return of the Index for a number of reasons, including: the Fund incurs
operating expenses not applicable to the Index and incurs costs in buying and
selling securities; the Fund may not be fully invested at times; differences in
the valuation of securities; and differences between the Fund’s portfolio and
the Index resulting from legal restrictions, cost, or liquidity
constraints.
By
itself, the Fund does not constitute a complete investment plan and should be
considered a long-term investment for investors who can afford to weather
changes in the value of their
investment.
PAST PERFORMANCE
The following bar chart and table provide some
indication of the risks of investing in the Fund by showing the variability of
the Fund’s performance from year to year and by comparing the Fund’s performance
to a broad based index. The
Fund’s past performance (before and after taxes) is not necessarily an
indication of how the Fund will perform in the future. More
up‑to‑date returns are available on the Fund’s website at etf.timothyplan.com, or by calling
the Fund at (800)
846‑7526.
Year‑by‑year Annual Total Returns
(for calendar years ending on December 31)
|
|
|
|
|
BEST
QUARTER |
|
WORST
QUARTER |
|
|
Jun‑20 |
|
Mar‑20 |
|
|
16.02% |
|
-28.98% |
Average Annual Total Returns
(for periods ending on December 31, 2021)
|
|
|
|
|
|
|
|
|
|
|
TIMOTHY PLAN HIGH DIVIDEND STOCK
ETF |
|
1 YEAR |
|
INCEPTION* |
|
|
Return before taxes |
|
28.10% |
|
12.81% |
Return after taxes on distributions
(1) |
|
27.49% |
|
12.17% |
Return after taxes on distributions and sale of
shares (1) |
|
17.00% |
|
9.86% |
Victory US Large Cap
High Dividend Volatility Weighted BRI Index (2) (reflects no deduction for
fees, expenses or taxes) |
|
28.80% |
|
13.41% |
Russell 1000 Value
Index(3) |
|
25.16% |
|
13.55% |
(1) |
After‑tax returns are calculated using the
historical highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes.
After‑tax returns depend on an investor’s
tax situation and may differ from those shown. After‑tax returns shown are
not relevant to investors who hold their Fund shares through tax‑deferred
arrangements, such as 401(k) plans or individual retirement
accounts. |
(2) |
Victory
US Large Cap High Dividend Volatility Weighted BRI Index is an unmanaged,
volatility weighted index created by the Fund’s Sub‑Advisor. A volatility
weighted index assigns percentage values to each security in the index
based on the volatility of that security in the market. More volatile
stocks have a lower weighting, and less volatile stocks are assigned a
higher weighting. The Index assumes reinvestment of all dividends and
distributions and does not reflect any asset-based charges for investment
management or other expenses. |
(3) |
The
Russell 1000© Value
Index is a is a market‑capitalization‑weighted index that measures the
performance of Russell1000® Index companies (which
consists of the 1,000 largest U.S. companies based on total market
capitalization) with lower price‑to‑book ratios and lower forecasted
growth rates. |
INVESTMENT ADVISOR
Timothy
Partners, Ltd., has served as investment adviser to the Fund since its inception
on April 29, 2019.
SUB‑ADVISOR
Victory
Capital Management Inc. (“Victory Capital or the “Sub‑Advisor”) through its
Victory Solutions team, has served as the Fund’s Sub‑Advisor since the Fund’s
inception on April 29, 2019.
PORTFOLIO MANAGERS
Mannik
Dhillon is President of Victory Capital’s VictoryShares and Solutions platform
and has been a Portfolio Manager of the Fund since April 2019.
Free
Foutz is the Portfolio Implementation Manager for Victory Capital’s
VictoryShares and Solutions platform and has been a Portfolio Manager of the
Fund since April 2019.
PURCHASE AND SALE OF
SHARES
The
Fund issues and redeems Shares at NAV only in large blocks of 50,000 Shares
(each block of Shares is called a “Creation Unit”). Creation Units are issued
and redeemed for cash and/or in‑kind for securities by Authorized Participants
(“APs”) that have entered into agreements with the Fund’s distributor.
Individual Shares may only be purchased and sold through brokers in secondary
market transactions on The New York Stock Exchange (the “Exchange”). Except when
aggregated in Creation Units, Shares are not redeemable securities of the Fund.
Shares
of the Fund will be listed for trading on the Exchange and will trade at market
prices rather than NAV. Shares of the Fund may trade at a price that is greater
than (a premium), at, or less than (a discount) NAV.
TAX INFORMATION
The
Fund’s distributions generally are taxable as ordinary income, qualified
dividend income or capital gains. A sale of Shares may result in capital gain or
loss.
PAYMENT TO BROKER-DEALERS
AND OTHER FINANCIAL INTERMEDIARIES
If
you purchase Shares through a broker-dealer or other financial intermediary
(such as a bank), the Fund and its related companies may pay the intermediary
for the sale of Shares and related services. These payments may create a
conflict of interest by influencing the broker-dealer or other intermediary and
your salesperson to recommend the Fund over another investment. Ask your
salesperson or visit your financial intermediary’s website for more information.
Timothy
Plan International ETF
INVESTMENT OBJECTIVE
The
Fund seeks to provide investment results that track the performance of the
Victory International Volatility Weighted BRI Index before fees and
expenses.
FEES AND EXPENSES OF THE
FUND
This
table describes the fees and expenses that you may pay if you buy and hold
shares (“Shares”) of the Fund. Investors may incur usual or customary brokerage
commissions and other charges on their purchases and sales of Shares of the Fund
in the secondary market, which are not reflected in the table or the example
below.
SHAREHOLDER FEES
(fees paid directly from
your investment)
NONE
ANNUAL FUND OPERATING
EXPENSES
(expenses that you pay
each year as a percentage of the value of your investment)
|
|
|
|
|
|
|
MANAGEMENT
FEES |
|
|
0.62% |
|
|
|
Total
Annual Operating Expenses |
|
|
0.62% |
|
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 amounts shown reflect the fee waiver/expense reimbursement
in place through the expiration date. Although your actual costs may be higher
or lower, based upon these assumptions your costs would be:
|
|
|
|
|
|
|
|
|
|
|
1 YEAR |
|
3 YEARS |
|
5 YEARS |
|
10 YEARS |
|
|
|
|
$63 |
|
$199 |
|
$346 |
|
$774 |
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 will
generally indicate higher transaction costs resulting in higher taxes when
Shares are held in a taxable account. These costs, which are not reflected in
annual Fund operating expenses or in the Example, affect the Fund’s performance.
During the Fund’s most recent fiscal period, the Fund’s portfolio turnover rate
was 42% of the average value of its
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund seeks to achieve its investment objective by investing, under normal market
conditions, at least 80% of its net assets directly or indirectly in the
securities included in the Victory International Volatility Weighted BRI Index
(the “Index”), an unmanaged, volatility weighted index created by the
Sub‑Advisor. A volatility weighted index assigns percentage values to each
security in the Index based on the volatility of that security in the market.
More volatile stocks have a lower weighting, and less volatile stocks are
assigned a higher weighting.
The
Index combines fundamental criteria with individual security risk control
achieved through volatility weighting of individual securities, rather than
traditional market cap weighting. Such methodology is sometimes referred to as
“Smart Beta.” The Index follows a proprietary rules-based methodology, developed
by the Sub‑Advisor, to construct its constituent securities:
The
Index universe begins with the stocks included in the Victory International
Volatility Weighted BRI Index, a volatility weighted index comprised of the 500
largest publicly traded foreign companies by market capitalization with positive
earnings in each of the four most recent quarters.
The
Index then eliminates the companies that do not satisfy the eVALUEator
proprietary Biblically Responsible Investing (“BRI”) filtering criteria
(“Excluded Securities”). The Advisor maintains the list of Excluded Securities
identified by the eVALUEator system.
The
Index considers foreign companies to be those that are organized or domiciled in
a developed country (excluding the U.S. and emerging markets) and whose stock
principally trades on a foreign exchange. Representative developed markets
include Canada, France, Germany, Great Britain, Japan, Hong Kong and
Australia.
The
Index is reconstituted every April and October (based on information as of the
prior month‑end) and is adjusted to limit exposure to any particular country to
20% and any particular sector to 25%.
The
Fund seeks to track the returns of the Index before fees and expenses by
employing, under normal circumstances, a “sampling” process to invest in a
representative sample of stocks included in the Index. The Fund’s portfolio
managers select these stocks using a statistical optimization process designed
to produce investment characteristics that closely approximate those of the
Index.
The
Fund will not knowingly invest in Excluded Securities. Excluded Securities are
securities issued by any company that is involved in the production or wholesale
distribution of alcohol, tobacco, or gambling equipment, gambling enterprises,
or which is involved, either directly or indirectly, in abortion or pornography,
or promoting anti-family entertainment or non‑biblical
lifestyles.
PRINCIPAL RISKS OF
INVESTING IN THE FUND
The
Fund’s investments are subject to the following principal risks:
Excluded Security Risk. Because the Index omits
Excluded Securities, the Fund may be riskier than other funds that invest in a
broader array of securities. BRI may not be successful. Because the Index is
reconstituted only at prescribed times during the year, the Fund may temporarily
hold securities that do not comply with the BRI filtering criteria if the
application of the criteria or the nature of a company’s business changes in
between these dates.
Equity Risk. The value of the equity securities
in which the Fund invests may decline in response to developments affecting
individual companies and/or general economic conditions. Price changes may be
temporary or last for extended periods.
ETF Structure Risks. The Fund is structured as
an exchange-traded fund (“ETF”) and as a result is subject to special risks,
including:
Not Individually
Redeemable. The
Fund’s shares (“Shares”) are not individually redeemable and may be redeemed by
the Fund at its net asset value per share (“NAV”) only in large blocks known as
“Creation Units.” You may incur brokerage costs purchasing enough Shares to
constitute a Creation Unit. Alternatively, you may redeem your Shares by selling
them on the secondary market at prevailing market prices.
Trading
Issues. Trading in
Shares on the Exchange (as defined below) may be halted due to market conditions
or for reasons that, in the view of the Exchange, make trading in Shares
inadvisable, such as extraordinary market volatility. There can be no assurance
that Shares will continue to meet the listing requirements of the Exchange.
There is no guarantee that an active secondary market will develop for the
Shares. In stressed market conditions, the market for Shares may become less
liquid in response to deteriorating liquidity in the markets for the Fund’s
underlying portfolio holdings, which may lead to differences between the market
price of the Shares and the underlying value of those Shares.
Market Price Variance
Risk. The market
prices of Shares will fluctuate in response to changes in NAV and supply and
demand for Shares and will include a “bid‑ask spread” charged by the exchange
specialists, market makers or other participants that trade the particular
security. There may be times when the market price and the NAV vary
significantly. This means that Shares may trade at a premium or discount to NAV.
International Closed
Market Trading Risk. Many of the Fund’s underlying securities
trade on foreign exchanges that are closed when the Exchange (as defined below)
is open; consequently, events may transpire while such foreign exchanges are
closed but the Exchange is open that may change the value of such underlying
securities relative to their last quoted prices on such foreign exchanges.
Intraday Indicative
Value (IIV) Risk. The Exchange intends to disseminate the
approximate per share value of the Fund’s published basket of securities
(“Deposit Securities”) every 15 seconds (the “intraday indicative value” or
“IIV’’). The IIV is not a “real-time” update of the NAV per share of the Fund
because the IIV may not be calculated in the same manner as the NAV. For
example, the calculation of the NAV may be subject to fair valuation at
different prices than those used in the calculations of the IIV and, unlike the
calculation of NAV, the IIV does not take into account Fund expenses. The IIV
calculations are based on local market prices and may not reflect events that
occur subsequent to the local market’s close which could affect premiums and
discounts between the IIV and the market price of the Shares. In addition, the
IIV is based on the published Deposit Securities and not on the Fund’s actual
holdings.
Authorized
Participants Concentration Risk. A limited number of financial institutions
may be responsible for all or a significant portion of the creation and
redemption activity for the Fund. If these firms exit the business or are unable
or unwilling to process creation and/or redemption orders, Shares may trade at a
premium or discount to NAV.
Foreign
Investment Risks.
Foreign Exposure
Risk. Special risks
associated with investments in foreign markets may include less liquidity,
greater volatility, less developed or less efficient trading markets, lack of
comprehensive company information, political instability and differing auditing
and legal standards.
Currency Risk.
The Fund’s net
asset value could decline as a result of changes in the exchange rates between
foreign currencies and the U.S. dollar. Additionally, certain foreign countries
may impose restrictions on the ability of issuers of foreign securities to make
payment of principal and interest to investors located outside the country, due
to blockage of foreign currency exchanges or otherwise.
Passive Investment Risk. The Fund is not
actively managed and does not, therefore, seek returns in excess of the Index.
The Sub‑Advisor will not buy or sell shares of an equity security due to current
or projected performance of a security, industry or sector, unless that security
is added to or removed, respectively, from the
Index.
Sampling Risk. The Fund’s use of a
representative sampling approach, if used, could result in it holding a smaller
number of securities than are in the Index. As a result, an adverse development
with an issuer of securities held by the Fund could result in a greater decline
in NAV than would be the case if the Fund held all of the securities in the
Index. To the extent the assets in the Fund are smaller, these risks will be
greater.
Stock Market Risk. Overall stock market risks
may affect the value of the Fund. Factors such as domestic and international
economic growth and market conditions, interest rate levels and political events
affect the securities markets.
Tracking Risks. The Fund’s return may not match
the return of the Index for a number of reasons, including: the Fund incurs
operating expenses not applicable to the Index and incurs costs in buying and
selling securities; the Fund may not be fully invested at times; differences in
the valuation of securities; and differences between the Fund’s portfolio and
the Index resulting from legal restrictions, cost, or liquidity constraints. The
Fund’s use of representative sampling may cause the tracking error to be higher
than would be the case if the Fund purchased all of the securities in the
Index.
You may lose money by investing in the
Fund. There is no guarantee that the Fund will achieve its
objective. By itself, the Fund does not constitute a complete investment plan
and should be considered a long-term investment for investors who can afford to
weather changes in the value of their
investment.
PAST PERFORMANCE
The following bar chart and table provide some
indication of the risks of investing in the Fund by showing the variability of
the Fund’s performance from year to year and by comparing the Fund’s performance
to a broad based index. The
Fund’s past performance (before and after taxes) is not necessarily an
indication of how the Fund will perform in the future. More
up‑to‑date returns are available on the Fund’s website at etf.timothyplan.com, or by calling
the Fund at (800)
846‑7526.
Year‑by‑year Annual Total Returns
(for calendar years
ending on December 31)
|
|
|
|
|
|
|
WORST
QUARTER |
|
|
Jun-20 |
|
Mar-20 |
|
|
14.81% |
|
-22.78% |
Average Annual Total Returns
(for periods ending on
December 31, 2021)
|
|
|
|
|
|
|
|
TIMOTHY PLAN INTERNATIONAL ETF |
|
1 YEAR |
|
INCEPTION* |
|
|
|
Return before taxes |
|
10.34% |
|
10.32% |
|
|
|
Return after taxes on distributions
(1) |
|
9.97% |
|
9.93% |
|
|
|
Return after taxes on distributions and sale of
shares (1) |
|
6.81% |
|
8.09% |
|
|
|
Victory International Volatility Weighted BRI Index
(2)
(reflects no deduction for fees, expenses or
taxes) |
|
10.67% |
|
10.97% |
|
|
|
MSCI
EAFE Index(3) |
|
11.26% |
|
10.13% |
(1) |
After‑tax returns are calculated using the
historical highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes.
After‑tax returns depend on an investor’s
tax situation and may differ from those shown. After‑tax returns shown are
not relevant to investors who hold their Fund shares through tax‑deferred
arrangements, such as 401(k) plans or individual retirement
accounts. |
(2) |
Victory International Volatility
Weighted BRI Index is an unmanaged, volatility weighted index created by
the Fund’s Sub‑Advisor. A volatility weighted index assigns percentage
values to each security in the index based on the volatility of that
security in the market. More volatile stocks have a lower weighting, and
less volatile stocks are assigned a higher weighting. The Index assumes
reinvestment of all dividends and distributions and does not reflect any
asset-based charges for investment management or other
expenses. |
(3) |
MSCI
EAFE Index is a free float‑adjusted, market capitalization‑weighted index
that measures the performance of stocks in the developed markets,
excluding the United States and
Canada. |
INVESTMENT ADVISOR
Timothy
Partners, Ltd. has served as investment advisor to the Fund commenced operations
on December 2, 2019.
SUB‑ADVISOR
Victory
Capital Management Inc. (“Victory Capital or the “Sub‑Advisor”) through its
Victory Solutions team, has served as the Fund’s Sub‑Advisor since the Fund
commenced operations on December 2, 2019.
PORTFOLIO MANAGERS
Mannik
Dhillon is President of Victory Capital’s VictoryShares and Solutions platform
and has been a Portfolio Manager of the Fund since it commenced operations on
December 2, 2019.
Free
Foutz is the Portfolio Implementation Manager for Victory Capital’s
VictoryShares and Solutions platform and has been a Portfolio Manager of the
Fund since it commenced operations on December 2, 2019.
PURCHASE AND SALE OF
SHARES
The
Fund issues and redeems Shares at NAV only in large blocks of 50,000 Shares
(each block of Shares is called a “Creation Unit”). Creation Units are issued
and redeemed for cash and/or in‑kind for securities by Authorized Participants
(“APs”) that have entered into agreements with the Fund’s distributor.
Individual Shares may only be purchased and sold through brokers in secondary
market transactions on The New York Stock Exchange (the “Exchange”). Except when
aggregated in Creation Units, Shares are not redeemable securities of the Fund.
Shares
of the Fund will be listed for trading on the Exchange and will trade at market
prices rather than NAV. Shares of the Fund may trade at a price that is greater
than (a premium), at, or less than (a discount) NAV.
TAX INFORMATION
The
Fund’s distributions generally are taxable as ordinary income, qualified
dividend income or capital gains. A sale of Shares may result in capital gain or
loss.
PAYMENT TO BROKER-DEALERS
AND OTHER FINANCIAL INTERMEDIARIES
If
you purchase Shares through a broker-dealer or other financial intermediary
(such as a bank), the Fund and its related companies may pay the intermediary
for the sale of Shares and related services. These payments may create a
conflict of interest by influencing the broker-dealer or other intermediary and
your salesperson to recommend the Fund over another investment. Ask your
salesperson or visit your financial intermediary’s website for more information.
Timothy
Plan US Large/Mid Cap Core Enhanced ETF
INVESTMENT OBJECTIVE
The
Fund seeks to provide investment results that track the performance of Victory
US Large/Mid Cap Long/Cash Volatility Weighted BRI Index before fees and
expenses. “BRI” is shorthand for Biblically Responsible
Investing.
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. You may pay other fees, such as brokerage commissions
and other fees to financial intermediaries, which are not reflected in the
tables and examples below.
SHAREHOLDER FEES
(fees paid directly from
your investment)
NONE
ANNUAL FUND OPERATING
EXPENSES
(expenses that you pay
each year as a percentage of the value of your investment)
|
|
|
|
|
|
|
MANAGEMENT
FEES |
|
|
0.52% |
|
|
|
Total
Annual Operating Expenses |
|
|
0.52% |
|
The
Total Annual Operating Expenses differ from the Ratio of Expenses to Average Net
Assets given in the Fund’s annual report, due to a rounding convention present
in the annual report calculation.
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. Although your actual costs may be higher or lower, based upon
these assumptions your costs would be:
|
|
|
|
|
|
|
|
|
|
|
1 YEAR |
|
3 YEARS |
|
5 YEARS |
|
10 YEARS |
|
|
|
|
$53 |
|
$167 |
|
$291 |
|
$653 |
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 will
generally indicate higher transaction costs resulting in higher taxes when
Shares are held in a taxable account. These costs, which are not reflected in
annual Fund operating expenses or in the Example, affect the Fund’s performance.
For the period July 29, 2021 through December 31, 2021, the portfolio
turnover rate for the Fund was 13%.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund seeks to achieve its investment objective by investing, under normal market
conditions, at least 80% of its net assets directly or indirectly in the
securities included in the Victory US Large/Mid Cap Long/Cash Volatility
Weighted BRI Index (the “Index”), an unmanaged, volatility weighted index
created by the Sub‑Advisor. A volatility weighted index assigns percentage
values to each security in the Index based on the volatility of that security in
the market. More volatile stocks are assigned a lower weighting, and less
volatile stocks are assigned a higher weighting.
The
Index combines fundamental criteria with individual security risk control
achieved through volatility weighting of individual securities.
In
accordance with a rules-based formula, the Index tactically reduces its exposure
to the equity markets during periods of significant market decline and
reallocates to stocks when market prices have either further declined or
rebounded. The term “Long/Cash” in the Fund’s name refers to a feature of the
Index that is designed to enhance risk-adjusted returns while attempting to
minimize downside market risk through defensive positioning, as described
below.
The
Index utilizes the following rules-based methodology to construct its
constituent securities:
|
† |
The
Index universe begins with all publicly traded U.S. stocks and then
screens for all companies with positive earnings across the last twelve
months. |
|
† |
The
Index identifies the 500 largest U.S. stocks by market capitalization
measured at the time the Index’s constituent securities are
determined. |
|
† |
The
500 stocks are weighted based on their daily standard deviation
(volatility) of daily price changes over the last 180 trading days. Stocks
with lower volatility receive a higher weighting and stocks with higher
volatility receive a lower
weighting. |
|
† |
The
Index then eliminates the companies that do not satisfy the eVALUEator
proprietary Biblically Responsible Investing (“BRI”) filtering criteria
(“Excluded Securities”). The Advisor maintains the list of Excluded
Securities identified by the eVALUEator
system. |
The
Index is reconstituted every April and October (based on information as of the
prior month‑end) and is adjusted to limit exposure to any particular sector to
25%. As of March 31, 2022, the Index had a market capitalization range from
$415 million to $ 1.1
trillion.
The
Index follows a mathematical index construction process designed to limit risk
during periods of significant (non‑normal) market decline by reducing its
exposure to the equity market by allocating a portion of the Index to cash or
cash equivalents. Market decline is measured at month‑end by reference to the
Victory US Large Cap/Mid Cap Volatility Weighted BRI Index (“Reference Index”),
which is composed of similar securities as the Index but without any allocation
to cash or cash equivalents.
A
“significant market decline” means a decline of 10% or more from the Reference
Index’s all‑time daily high closing value compared to its most recent month‑end
closing value, during which, the Index’s exposure to the equity market may be as
low as 25% depending on the magnitude and duration of such
decline.
During
a period of significant market decline that is 10% or more but less than 20%
(the “initial trigger point”), the Index will allocate 75% of the stocks
included in the Index to cash or cash equivalents, with the remaining 25%
consisting of stocks included in the Reference
Index.
The
Index will reallocate all or a portion of its cash or cash equivalents to stocks
when the Reference Index reaches certain additional trigger points, measured at
a subsequent month‑end, as follows:
|
† |
The
Index will return to being 100% allocated to stocks if the subsequent
month‑end closing value of the stocks in the Reference Index returns to a
level that is less than the initial trigger
point. |
|
† |
If
the Reference Index declines by 20% or more but less than 30% from its
all‑time daily high closing value as measured at a subsequent month‑end,
the Index will reallocate an additional 25% to the stocks in the Reference
Index at their current securities weightings and the Index will then be
50% allocated to stocks included in the Reference
Index. |
|
† |
If
the Reference Index declines by 30% or more but less than 40% from its
all‑time daily high closing value as measured at a subsequent month‑end,
the Index will reallocate another 25% to the stocks of the Reference Index
at their current securities weighting and the Index will then be 75%
allocated to stocks included in the Reference
Index. |
|
† |
If
the Reference Index declines by 40% or more from its all‑time daily high
closing value as measured at a subsequent month‑end, the Index will
reallocate the remaining 25% to the stocks in the Reference Index at their
current securities weighting. At this point, the Index will be 100%
allocated to stocks included in the Reference
Index. |
The
Index will make any prescribed allocations to cash in accordance with the
mathematical formula only at month end. In the event that it does, the Fund will
experience higher portfolio turnover and incur additional transaction
costs.
During
any periods of significant market decline, when the Index’s exposure to the
market is less than 100%, the Fund will invest the cash portion dictated by the
Index in 30‑day U.S. Treasury bills or in money market mutual funds that
primarily invest in short-term U.S. Treasury
obligations.
While
the Fund generally seeks to track the returns of the Index before fees and
expenses by employing a replication strategy that seeks to hold all the stocks
in the Index, at times the Fund may pursue its investment objective by investing
in the Index securities indirectly by investing all or a portion of its assets
in another investment company advised by the Adviser, including an
exchange-traded fund (“ETF”), that seeks to track the Index or the Reference
Index.
The
Fund will not knowingly invest in Excluded Securities. Excluded Securities are
securities issued by any company that is involved in the production or wholesale
distribution of alcohol, tobacco, or gambling equipment, gambling enterprises,
or which is involved, either directly or indirectly, in abortion or pornography,
or promoting anti-family entertainment or non‑biblical
lifestyles.
Timothy
Partners, Ltd, the Advisor for the Timothy Plan Family of Funds, employs two
companies to perform Biblically Responsible Investing (“BRI”) research and to
create and manage the list of “Excluded Securities”, as such is defined in the
Funds’ current prospectus. The Institute for Corporate Securities Research, Inc
(“ICSRI”) is a research company devoted exclusively to conducting research on
companies to determine whether they violate any of the Fund’s screening
criteria. eVALUEator Services, LLC (“ESL”) is a data tabulation and marketing
company that provides, on a subscription basis, the information it receives from
ICSRI in various tabulated forms. ESL provides the list of Excluded
Securities to the Adviser on an ongoing
basis.
PRINCIPAL RISKS OF
INVESTING IN THE FUND
The
Fund’s investments are subject to the following principal risks:
Excluded Security Risk. Because the Index omits
Excluded Securities, the Fund may be riskier than other funds that invest in a
broader array of securities. Because the Index is reconstituted only at
prescribed times during the year, the Fund may temporarily hold securities that
do not comply with the BRI filtering criteria if the application of the criteria
or the nature of a company’s business changes in between these dates.
Equity Securities Risk —The value of the equity
securities in which the Fund invests may decline in response to developments
affecting individual companies and/or general economic conditions in the United
States or abroad. A company’s earnings or
dividends
may not increase as expected (or may decline) because of poor management,
competitive pressures, reliance on particular suppliers or geographical regions,
labor problems or shortages, corporate restructurings, fraudulent disclosures,
man‑made or natural disasters, military confrontations or wars, terrorism,
public health crises, or other events, conditions and factors. Price changes may
be temporary or last for extended
periods.
Stock Market Risk — Overall stock market risks
may affect the value of the Fund. Domestic and international factors such as
political events, war, trade disputes, interest rate levels and other fiscal and
monetary policy changes, pandemics and other public health crises and related
geopolitical events, as well as environmental disasters such as earthquakes,
fires and floods, may add to instability in world economies and markets
generally. The impact of these and other factors may be short-term or may last
for extended periods.
Fixed Income Risk — The value of the Fund’s
direct or indirect investments in fixed income securities changes in response to
various factors, including, for example, market-related factors (such as changes
in interest rates or changes in the risk appetite of investors generally) and
changes in the actual or perceived ability of the issuer (or of issuers
generally) to meet its (or their)
obligations.
Index/Defensive Positioning Risk — Because the
Index’s allocation to cash versus securities is determined at month‑end, there
is a risk that the Index, and thus the Fund, will not react to changes in market
conditions that occur between reallocations. The Fund will incur transaction
costs and potentially adverse tax consequences in the event the Index allocates
to cash. There is no guarantee that the Index’s prescribed defensive strategy,
if employed, will be successful in minimizing downside market
risk.
Portfolio Turnover Risk — Higher portfolio
turnover ratios resulting from additional purchases and sales of portfolio
securities will generally result in higher transaction costs and Fund expenses
and may result in more significant distributions of short-term capital gains to
investors, which are taxed as ordinary
income.
Investment Company Risk — An investment company
or similar vehicle (including an ETF) in which the Fund invests may not achieve
its investment objective. Underlying investment vehicles are subject to
investment advisory and other expenses, which will be indirectly paid by the
Fund. Lack of liquidity in an ETF could result in an ETF being more volatile
than the underlying portfolio of
securities.
Index Risk — The Fund attempts to track the
performance of the Index. The Fund’s performance will be negatively affected by
general declines in the securities and asset classes represented in the Index.
In addition, because the Fund is not actively managed, unless a specific
security is removed from the Index, the Fund generally will not sell a security
because the security’s issuer was in financial trouble. The Fund also does not
attempt to take defensive positions under any market conditions, including
declining markets. Therefore, the Fund’s performance could be lower than funds
that may actively shift their portfolio assets to take advantage of market
opportunities or to lessen the impact of a market decline or a decline in the
value of one or more issuers.
Passive Investment Risk — The Fund is not
actively managed, and the Adviser does not take defensive positions under any
market conditions, including declining
markets.
Calculation Methodology Risk — The Index relies
on various sources of information to assess the criteria of issuers included in
the Index, including information that may be based on assumptions and estimates.
Neither the Fund, the Index Provider, nor the Adviser can offer assurances that
the Index’s calculation methodology or sources of information will provide an
accurate assessment of included issuers or correct valuation of securities, nor
can they guarantee the availability or timeliness of the production of an
Index.
Tracking Error Risk — The Fund may be subject
to tracking error, which is the divergence of the Fund’s performance from its
index. Tracking error may occur because of, among other reasons, differences
between the securities and other instruments held in the Fund’s portfolio and
those included in the Index. This risk may be heightened during times of
increased market volatility or other unusual market conditions. Tracking error
also may result because the Fund incurs fees and expenses, while the Index does
not.
Exchange-Traded Fund (“ETF”) Structure Risk —
The Fund is structured as an ETF and as a result is subject to special risks,
including:
|
◾ |
Not Individually Redeemable.
The Fund’s shares (“Shares”) are not individually redeemable and may be
redeemed by the Fund at its net asset value per share (“NAV”) only in
large blocks known as “Creation Units.” You may incur brokerage costs
purchasing enough Shares to constitute a Creation Unit. Alternatively, you
may redeem your Shares by selling them on the secondary market at
prevailing market
prices. |
|
◾ |
Trading Issues. Trading in
Shares on the Exchange (as defined below) may be halted due to market
conditions or for reasons that, in the view of the Exchange, make trading
in Shares inadvisable, such as extraordinary market volatility. There can
be no assurance that Shares will continue to meet the listing requirements
of the Exchange. There is no guarantee that an active secondary market
will develop for the Shares. In stressed market conditions, the market for
Shares may become less liquid in response to deteriorating liquidity in
the markets for the Fund’s underlying portfolio holdings, which may lead
to differences between the market price of the Shares and the underlying
value of those
Shares. |
|
◾ |
Market Price Variance Risk.
The market prices of Shares will fluctuate in response to changes in NAV
and supply and demand for Shares and will include a “bid‑ask spread”
charged by the exchange specialists, market makers or other participants
that trade the particular security. There may be times when the market
price and the NAV vary significantly. This means that Shares may trade at
a premium or discount to
NAV. |
|
◾ |
Authorized Participants Concentration
Risk. A limited number of financial institutions may
be responsible for all or a significant portion of the creation and
redemption activity for the Fund. If these firms exit the business or are
unable or unwilling to process creation and/or redemption orders, Shares
may trade at a premium or discount to
NAV. |
|
◾ |
Intraday Indicative Value (IIV)
Risk. The Exchange intends to disseminate the
approximate per share value of the Fund’s published basket of securities
(“Deposit Securities”) every 15 seconds (the “intraday indicative value”
or “IIV’’). The IIV is not a “real-time” update of the NAV per share of
the Fund because the IIV may not be calculated in the same manner as the
NAV. For example, the calculation of the NAV may be subject to fair
valuation at different prices than those used in the calculations of the
IIV and, unlike the calculation of NAV, the IIV does not take into account
Fund expenses. In addition, the IIV is based on the published Deposit
Securities and not on the Fund’s actual
holdings. |
Large/Mid Capitalization Stock Risk. The
securities of large and mid cap companies may underperform the securities of
smaller cap companies or the market as a whole. Larger, more established
companies may not respond as quickly to competitive challenges (such as changes
in technology and consumer tastes) and their growth rate may lag those of
smaller companies, especially during periods of economic
expansion.
Limited History of Operations. The Fund is a
new ETF and has a limited history of operations for investors to
evaluate.
Valuation Risk — The sale price the Fund could
receive for a security may differ from the Fund’s valuation of the security and
may differ from the value used by the Index, particularly for securities that
trade in low volume or volatile markets or that are valued using a fair value
methodology. The Fund relies on various sources to calculate its NAV. The
information may be provided by third parties that are believed to be reliable,
but the information may not be accurate due to errors by such pricing sources,
technological issues, or
otherwise.
You may lose money by investing in the
Fund. There is no guarantee that the Fund will achieve its
objective.
By
itself, the Fund does not constitute a complete investment plan and should be
considered a long-term investment for investors who can afford to weather
changes in the value of their
investment.
PERFORMANCE
No performance information is presented since the
Fund has not yet had a full calendar year of performance.
Performance data for the Fund may be available online at etf.timothyplan.com or by calling
1‑800‑846‑7526. The
Fund’s past performance is not necessarily an indication of how the Fund will
perform in the future.
INVESTMENT ADVISOR
Timothy
Partners, Ltd. has served as investment adviser to the Fund since its inception
on July 28, 2021.
SUB‑ADVISOR
Victory
Capital Management Inc. (“Victory Capital” or the “Sub‑Advisor”) through its
Victory Solutions team, has served as the Fund’s Sub‑Advisor since the Fund’s
inception on July 28, 2021.
PORTFOLIO MANAGERS
Mannik
Dhillon is President of Victory Capital’s VictoryShares and Solutions platform
and has been a Portfolio Manager of the Fund since July 28, 2021.
Free
Foutz is the Portfolio Implementation Manager for Victory Capital’s
VictoryShares and Solutions platform and has been a Portfolio Manager of the
Fund since July 28, 2021.
PURCHASE AND SALE OF
SHARES
The
Fund issues and redeems Shares at NAV only in large blocks of 50,000 Shares
(each block of Shares is called a “Creation Unit”). Creation Units are issued
and redeemed for cash and/or in‑kind for securities by Authorized Participants
(“APs”) that have entered into agreements with the Fund’s distributor.
Individual Shares may only be purchased and sold through brokers in secondary
market transactions on The New York Stock Exchange (the “Exchange”). Except when
aggregated in Creation Units, Shares are not redeemable securities of the Fund.
Shares
of the Fund will be listed for trading on the Exchange and will trade at market
prices rather than NAV. Shares of the Fund may trade at a price that is greater
than (a premium), at, or less than (a discount) NAV.
TAX INFORMATION
The
Fund’s distributions generally are taxable as ordinary income, qualified
dividend income or capital gains. A sale of Shares may result in capital gain or
loss.
PAYMENT TO BROKER-DEALERS
AND OTHER FINANCIAL INTERMEDIARIES
If
you purchase Shares through a broker-dealer or other financial intermediary
(such as a bank), the Fund and its related companies may pay the intermediary
for the sale of Shares and related services. These payments may create a
conflict of interest by influencing the broker-dealer or other intermediary and
your salesperson to recommend the Fund over another investment. Ask your
salesperson or visit your financial intermediary’s website for more information.
Timothy
Plan High Dividend Stock Enhanced ETF
INVESTMENT OBJECTIVE
The
Fund seeks to provide investment results that track the performance of the
Victory US Large Cap High Dividend Long/Cash Volatility Weighted BRI Index (the
“Index”) before fees and expenses. “BRI” is shorthand for Biblically Responsible
Investing.
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. You may pay other fees, such as brokerage commissions
and other fees to financial intermediaries, which are not reflected in the
tables and examples below.
SHAREHOLDER FEES
(fees paid directly from your investment)
NONE
ANNUAL FUND OPERATING
EXPENSES
(expenses that you pay each year as a percentage of
the value of your investment)
|
|
|
|
|
|
|
MANAGEMENT
FEES |
|
|
0.52% |
|
|
|
Total
Annual Operating Expenses |
|
|
0.52% |
|
The
Total Annual Operating Expenses differ from the Ratio of Expenses to Average Net
Assets given in the Fund’s annual report, due to a rounding convention present
in the annual report calculation.
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. Although your actual costs may be higher or lower, based upon
these assumptions your costs would be:
|
|
|
|
|
|
|
|
|
|
|
1 YEAR |
|
3 YEARS |
|
5 YEARS |
|
10 YEARS |
|
|
|
|
$53 |
|
$167 |
|
$291 |
|
$653 |
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 will
generally indicate higher transaction costs resulting in higher taxes when
Shares are held in a taxable account. These costs, which are not reflected in
annual Fund operating expenses or in the Example, affect the Fund’s performance.
For the period July 29, 2021 through December 31, 2021, the Fund’s
portfolio turnover rate was 16%.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund seeks to achieve its investment objective by investing, under normal market
conditions, at least 80% of its net assets directly or indirectly in the
securities included in the Victory US Large Cap High Dividend Long/Cash
Volatility Weighted BRI Index (the “Index”), an unmanaged, volatility weighted
index created by the Sub‑Advisor. A volatility weighted index assigns percentage
values to each security in the Index based on the volatility of that security in
the market. More volatile stocks are assigned a lower weighting, and less
volatile stocks are assigned a higher weighting.
The
Index combines fundamental criteria with individual security risk control
achieved through volatility weighting of individual securities. In accordance
with a rules-based mathematical formula, the Index tactically reduces its
exposure to the equity markets during periods of significant market decline and
reallocates to stocks when market prices have further declined or rebounded. The
term “Long/Cash” in the Fund’s name refers to a feature of the Index that is
designed to enhance risk-adjusted returns while attempting to minimize downside
market risk through defensive positioning, as described below.
The
Index is comprised of the highest 100 dividend yielding stocks included in the
Victory US Large/Mid Cap Volatility Weighted BRI Index (“Parent Index”). The
Parent Index universe begins with the stocks included in the Nasdaq Victory US
Large Cap 500 Volatility Weighted Index, a volatility weighted index comprised
of the 500 largest U.S. companies by market capitalization with positive
earnings across the last twelve months. The Parent Index then eliminates the
companies that do not satisfy the ICSRI proprietary Biblically Responsible
Investing (“BRI”) filtering criteria (“Excluded Securities”). The Advisor
maintains the list of Excluded Securities tabulated by the eVALUEator
system.
The
100 highest dividend yielding stocks included in the Index are weighted based on
their daily standard deviation (volatility) of daily price changes over the last
180 trading days. Stocks with lower volatility receive a higher weighting and
stocks with higher volatility receive a lower weighting.
The
Fund will not knowingly invest in Excluded Securities. Excluded Securities are
securities issued by any company that is involved in the production or wholesale
distribution of alcohol, tobacco, or gambling equipment, gambling enterprises,
or which is involved, either directly or indirectly, in abortion or pornography,
or promoting anti-family entertainment or non‑biblical lifestyles.
Timothy
Partners, Ltd, the Advisor for the Timothy Plan Family of Funds, employs two
companies to perform Biblically Responsible Investing (“BRI”) research and to
create and manage the list of “Excluded Securities”, as such is defined in the
Funds’ current prospectus. The Institute for Corporate Securities Research, Inc
(“ICSRI”) is a research company devoted exclusively to conducting research on
companies to determine whether they violate any of the Fund’s screening
criteria. eVALUEator Services, LLC (“ESL”) is a data tabulation and marketing
company that provides, on a subscription basis, the information it receives from
ICSRI in various tabulated forms. ESL provides the list of Excluded
Securities to the Adviser on an ongoing basis.
The
Index is reconstituted every April and October (based on information as of the
prior month‑end) and is adjusted to limit exposure to any particular sector to
25%. As of March 31, 2022, the Index had a market capitalization range from
$415 million to $258.2 billion.
The
Index utilizes the following index construction process designed to limit risk
during periods of significant (non‑normal) market decline by reducing its
exposure to the equity market by allocating a portion of the Index to cash or
cash equivalents. Market decline is measured at month‑end by reference to the
Victory US Large Cap High Dividend Volatility Weighted BRI Index (“Reference
Index”), which is composed of similar securities as the Index but without any
allocation to cash or cash equivalents.
A
“significant market decline” means a decline of 8% or more from the Reference
Index’s all‑time daily high closing value compared to its most recent month‑end
closing value, during which, the Index’s exposure to the equity market may be as
low as 25% depending on the magnitude and duration of such decline.
During
a period of significant market decline that is 8% or more but less than 16% (the
“initial trigger point”), the Index will allocate 75% of the stocks included in
the Index to cash or cash equivalents, with the remaining 25% consisting of
stocks included in the Reference Index.
The
Index will reallocate all or a portion of its cash or cash equivalents to stocks
when the Reference Index reaches certain additional trigger points, measured at
a subsequent month‑end, as follows:
|
† |
The
Index will return to being 100% allocated to stocks if the subsequent
month‑end closing value of the stocks in the Reference Index returns to a
level that is less than the initial trigger
point. |
|
† |
If
the Reference Index declines by 16% or more but less than 24% from its
all‑time daily high closing value as measured at a subsequent month‑end,
the Index will reallocate an additional 25% to the stocks in the Reference
Index at their current securities weightings and the Index will then be
50% allocated to stocks included in the Reference
Index. |
|
† |
If
the Reference Index declines by 24% or more but less than 32% from its
all‑time daily high closing value as measured at a subsequent month‑end,
the Index will reallocate another 25% to the stocks of the Reference Index
at their current securities weighting and the Index will then be 75%
allocated to stocks included in the Reference
Index. |
|
† |
If
the Reference Index declines by 32% or more from its all‑time daily high
closing value as measured at a subsequent month‑end, the Index will
reallocate the remaining 25% to the stocks in the Reference Index at their
current securities weighting. At this point, the Index will be 100%
allocated to stocks included in the Reference
Index. |
The
Index will make any prescribed allocations to cash in accordance with the
mathematical formula only at month end. In the event that it does, the Fund will
experience higher portfolio turnover and incur additional transaction
costs.
During
any periods of significant market decline, when the Index’s exposure to the
market is less than 100%, the Fund will invest the cash portion dictated by the
Index in 30‑day U.S. Treasury bills or in money market mutual funds that
primarily invest in short-term U.S. Treasury
obligations.
While
the Fund generally seeks to track the returns of the Index before fees and
expenses by employing a replication strategy that seeks to hold all the stocks
in the Index, at times the Fund may pursue its investment objective by investing
in the Index securities indirectly by investing all or a portion of its assets
in another investment company advised by the Adviser, including an
exchange-traded fund (“ETF”), that seeks to track the Index or the Reference
Index.
PRINCIPAL RISKS OF
INVESTING IN THE FUND
The
Fund’s investments are subject to the following principal risks:
Dividend Income Strategy Risk — The Fund’s high
dividend strategy may not be successful. Dividend paying stocks may fall out of
favor relative to the overall market
Excluded Security Risk. Because the Index omits
Excluded Securities, the Fund may be riskier than other funds that invest in a
broader array of securities. Because the Index is reconstituted only at
prescribed times during the year, the Fund may temporarily hold securities that
do not comply with the BRI filtering criteria if the application of the criteria
or the nature of a company’s business changes in between these dates.
Equity Securities Risk —The value of the equity
securities in which the Fund invests may decline in response to developments
affecting individual companies and/or general economic conditions in the United
States or abroad. A company’s earnings or dividends may not increase as expected
(or may decline) because of poor management, competitive pressures, reliance on
particular suppliers or geographical regions, labor problems or shortages,
corporate restructurings, fraudulent disclosures, man‑made or natural disasters,
military confrontations or wars, terrorism, public health crises, or other
events, conditions and factors. Price changes may be temporary or last for
extended periods.
Stock Market Risk — Overall stock market risks
may affect the value of the Fund. Domestic and international factors such as
political events, war, trade disputes, interest rate levels and other fiscal and
monetary policy changes, pandemics and other public health crises and related
geopolitical events, as well as environmental disasters such as earthquakes,
fires and floods, may add to instability in world economies and markets
generally. The impact of these and other factors may be short-term or may last
for extended periods.
Fixed Income Risk — The value of the Fund’s
direct or indirect investments in fixed income securities changes in response to
various factors, including, for example, market-related factors (such as changes
in interest rates or changes in the risk appetite of investors generally) and
changes in the actual or perceived ability of the issuer (or of issuers
generally) to meet its (or their)
obligations.
Large-Capitalization Stock Risk — The
securities of large capitalization companies may underperform the securities of
smaller capitalization companies or the market as a whole. The growth rate of
larger, more established companies may lag those of smaller companies,
especially during periods of economic
expansion.
Dividend Income Strategy Risk — The Fund’s high
dividend strategy may not be successful. Dividend paying stocks may fall out of
favor relative to the overall
market.
Index/Defensive Positioning Risk — Because the
Index’s allocation to cash versus securities is determined at month‑end, there
is a risk that the Index, and thus the Fund, will not react to changes in market
conditions that occur between reallocations. The Fund will incur transaction
costs and potentially adverse tax consequences in the event the Index allocates
to cash. There is no guarantee that the Index’s prescribed defensive strategy,
if employed, will be successful in minimizing downside market
risk
Index Risk — The Fund attempts to track the
performance of the Index. The Fund’s performance will be negatively affected by
general declines in the securities and asset classes represented in the Index.
In addition, because the Fund is not actively managed, unless a specific
security is removed from the Index, the Fund generally will not sell a security
because the security’s issuer was in financial trouble. The Fund also does not
attempt to take defensive positions under any market conditions, including
declining markets. Therefore, the Fund’s performance could be lower than funds
that may actively shift their portfolio assets to take advantage of market
opportunities or to lessen the impact of a market decline or a decline in the
value of one or more issuers.
Passive Investment Risk — The Fund is not
actively managed, and the Adviser does not take defensive positions under any
market conditions, including declining
markets.
Calculation Methodology Risk — The Index relies
on various sources of information to assess the criteria of issuers included in
the Index, including information that may be based on assumptions and estimates.
Neither the Fund, the Index Provider, nor the Adviser can offer assurances that
the Index’s calculation methodology or sources of information will provide an
accurate assessment of included issuers or correct valuation of securities, nor
can they guarantee the availability or timeliness of the production of an
Index.
Tracking Error Risk — The Fund may be subject
to tracking error, which is the divergence of the Fund’s performance from its
index. Tracking error may occur because of, among other reasons, differences
between the securities and other instruments held in the Fund’s portfolio and
those included in the Index. This risk may be heightened during times of
increased market volatility or other unusual market conditions. Tracking error
also may result because the Fund incurs fees and expenses, while the Index does
not.
Investment Company Risk — An investment company
or similar vehicle (including an ETF) in which the Fund invests may not achieve
its investment objective. Underlying investment vehicles are subject to
investment advisory and other expenses, which will be indirectly paid by the
Fund. Lack of liquidity in an ETF could result in an ETF being more volatile
than the underlying portfolio of
securities.
Portfolio Turnover Risk — Higher portfolio
turnover ratios resulting from additional purchases and sales of portfolio
securities will generally result in higher transaction costs and Fund expenses
and may result in more significant distributions of short-term capital gains to
investors, which are taxed as ordinary
income.
Exchange-Traded Fund (“ETF”) Structure Risk —
The Fund is structured as an ETF and as a result is subject to special risks,
including:
|
◾ |
Not Individually Redeemable — The Fund’s
shares are not individually redeemable and may be redeemed by the Fund at
its net asset value per share (“NAV”) only in large blocks known as
Creation Units. You may incur brokerage costs purchasing enough shares to
constitute a Creation Unit. Alternatively, you may redeem your shares by
selling them on the secondary market at prevailing market
prices. |
|
◾ |
Trading Issues — Trading in shares on the
Exchange may be halted due to market conditions or for reasons that, in
the view of the Exchange, make trading in shares inadvisable, such as
extraordinary market volatility. There can be no assurance that shares
will continue to meet
the |
|
listing requirements of
the Exchange. There is no guarantee that an active secondary market will
develop for the shares. In stressed market conditions, authorized
participants may be unwilling to participate in the creation/redemption
process, particularly if the market for shares becomes less liquid in
response to deteriorating liquidity in the markets for the Fund’s
underlying portfolio holdings, which may lead to differences between the
market price of the shares and the underlying value of those
shares. |
|
◾ |
Market Price Variance Risk — The market
prices of shares will fluctuate in response to changes in NAV and supply
and demand for shares and will include a bid‑ask spread charged by the
exchange specialists, market makers or other participants that trade the
particular security. There may be times when the market price and the NAV
vary significantly, particularly in times of market stress. This means
that shares may trade at a premium or discount to
NAV. |
Authorized Participants Concentration Risk — A
limited number of financial institutions may be responsible for all or a
significant portion of the creation and redemption activity for the Fund. If
these firms exit the business or are unable or unwilling to process creation
and/or redemption orders, shares may trade at a premium or discount to
NAV.
Intraday Indicative Value (“IIV”) Risk — The
Exchange intends to disseminate the approximate per share value of the Fund’s
published basket of securities (“Deposit Securities”) every 15 seconds (the
“intraday indicative value” or “IIV”). The IIV is not a real-time update of the
NAV per share of the Fund because the IIV may not be calculated in the same
manner as the NAV. For example, the calculation of the NAV may be subject to
fair valuation at different prices than those used in the calculations of the
IIV and, unlike the calculation of NAV, the IIV does not take into account Fund
expenses. In addition, the IIV is based on the published Deposit Securities and
not on the Fund’s actual holdings.
Valuation Risk — The sale price the Fund could
receive for a security may differ from the Fund’s valuation of the security and
may differ from the value used by the Index, particularly for securities that
trade in low volume or volatile markets or that are valued using a fair value
methodology. The Fund relies on various sources to calculate its NAV. The
information may be provided by third parties that are believed to be reliable,
but the information may not be accurate due to errors by such pricing sources,
technological issues, or
otherwise.
You may lose money by investing in the
Fund. There is no guarantee that the Fund will achieve its
objective. An
investment in the Fund is not a bank deposit and is not insured or guaranteed by
the Federal Deposit Insurance Corporation (FDIC) or any other government
agency.
By
itself, the Fund does not constitute a complete investment plan and should be
considered a long-term investment for investors who can afford to weather
changes in the value of their
investment.
PERFORMANCE
No performance information is presented since the
Fund has not yet had a full calendar year of performance.
Performance data for the Fund may be available online at etf.timothyplan.com or by calling
800‑846‑7526. The
Fund’s performance is not necessarily an indication of how the Fund will perform
in the future.
INVESTMENT ADVISOR
Timothy
Partners, Ltd., has served as investment adviser to the Fund since its inception
on July 28, 2021.
SUB‑ADVISOR
Victory
Capital Management Inc. (“Victory Capital or the “Sub‑Advisor”) through its
Victory Solutions team, has served as the Fund’s Sub‑Advisor since the Fund’s
inception on July 28, 2021.
PORTFOLIO MANAGERS
Mannik
Dhillon is President of Victory Capital’s VictoryShares and Solutions platform
and has been a Portfolio Manager of the Fund since July 28, 2021.
Free
Foutz is the Portfolio Implementation Manager for Victory Capital’s
VictoryShares and Solutions platform and has been a Portfolio Manager of the
Fund since July 28, 2021.
PURCHASE AND SALE OF
SHARES
The
Fund issues and redeems Shares at NAV only in large blocks of 50,000 Shares
(each block of Shares is called a “Creation Unit”). Creation Units are issued
and redeemed for cash and/or in‑kind for securities by Authorized Participants
(“APs”) that have entered into agreements with the Fund’s distributor.
Individual Shares may only be purchased and sold through brokers in secondary
market transactions on The New York Stock Exchange (the “Exchange”). Except when
aggregated in Creation Units, Shares are not redeemable securities of the Fund.
Shares
of the Fund will be listed for trading on the Exchange and will trade at market
prices rather than NAV. Shares of the Fund may trade at a price that is greater
than (a premium), at, or less than (a discount) NAV.
TAX INFORMATION
The
Fund’s distributions generally are taxable as ordinary income, qualified
dividend income or capital gains. A sale of Shares may result in capital gain or
loss.
PAYMENT TO BROKER-DEALERS
AND OTHER FINANCIAL INTERMEDIARIES
If
you purchase Shares through a broker-dealer or other financial intermediary
(such as a bank), the Fund and its related companies may pay the intermediary
for the sale of Shares and related services. These payments may create a
conflict of interest by influencing the broker-dealer or other intermediary and
your salesperson to recommend the Fund over another investment. Ask your
salesperson or visit your financial intermediary’s website for more information.
Section 2
| Additional Fund Information
The
Timothy Plan US Small Cap Core ETF (“Small Cap Fund”), Timothy Plan US Large/Mid
Cap Core ETF (“Large/Mid Cap Fund”), Timothy Plan High Dividend Stock ETF (“High
Dividend Fund”), Timothy Plan International ETF (“International Fund”), Timothy
Plan US Large/Mid Cap Core Enhanced ETF (“Large/Mid Enhanced Fund”) and Timothy
Plan High Dividend Stock Enhanced ETF (“High Dividend Enhanced Fund) are each
organized as an exchange-traded fund (“ETF”), each having distinct investment
management objectives, strategies, risks, and policies.
This
section describes additional information about the principal investment
strategies that the Funds will use under normal market conditions to pursue
their investment objectives. In managing the Funds’ investment portfolios, the
Sub‑Advisor uses a “passive” or indexing approach to try to achieve each Fund’s
investment objective. The Funds do not try to outperform their indexes. Under
normal market conditions, each Fund pursues its investment objective by seeking
to track the price and yield performance, before fees and expenses, of a
particular index. Each Fund will normally invest at least 80% of its net assets,
plus the amount of any borrowings for investment purposes, in the securities
comprising the Fund’s respective index. Keep in mind that for cash management
purposes, each Fund is permitted to hold all or a portion of its assets in cash,
index futures, short-term money market instruments or shares of other investment
companies, including money market funds. To the extent that it does so, a Fund
may not benefit from any upswing in the market and may fail to meet its
investment objective.
The
Sub‑Advisor expects that, over time, the correlation between a Fund’s
performance and that of its respective index, before fees and expenses, will be
95% or better. A number of factors may affect the Fund’s ability to achieve a
high degree of correlation with its index, and there can be no guarantee that a
Fund will achieve a high degree of correlation. The Sub‑Advisor monitors each
Fund on an ongoing basis, and makes adjustments to its portfolio, as necessary,
to minimize tracking error and to maintain liquidity.
During
any periods of significant market decline, when an Enhanced Fund’s underlying
Index is less than 100% exposed to the market, the affected Enhance Fund
will invest the cash portion dictated by the Index in 30‑day U.S. U.S. Treasury
bills or in money market mutual funds that primarily invest in short-term U.S.
Treasury obligations.
If
significant market volatility during a month result in an Enhanced Fund Index
passing multiple trigger points, the Index will adjust its allocation to cash
and cash equivalents as prescribed by the Index’s rules, regardless of any
interim triggers. For example, if an Index’s initial trigger point is 8% or more
but less than 16% and the Reference Index experiences an initial decline of 9%
from its all‑time daily high closing value, the Index will be allocated 75% to
cash and 25% to stocks included in the Reference Index. If instead the initial
decline of the Reference Index at month‑end is 18%, the Index will be allocated
50% to cash and 50% to stocks as prescribed by the Index’s rules.
When
an Enhanced Fund’s Index has allocated any portion of its value to cash, the
Index will only continue reallocating to stocks according to its rules,
regardless of subsequent market movements. The Index will only allocate
additional amounts to cash or cash equivalents once the Reference Index has
returned to 100% allocation to stocks.
At
times, the Sub‑Advisor may invest all or a portion of a Fund’s assets in another
Timothy Plan investment company, including an ETF, that seeks to track the same
index as the Fund or a similar index, such as a reference index. The Sub‑
Advisor may choose to do so, for example, when holding such other investment
company would be more efficient than investing directly in the individual
constituent securities of the Index.
Each
Fund’s investment objective and policy to invest at least 80% of its net assets
in the securities of its respective Index are each a non‑fundamental policy and
may be changed by the Board upon 60 days’ written notice to shareholders. For
purposes of a Fund’s investment strategy, “net assets” includes any borrowings
for investment purposes.
INVESTMENTS
The
following describes the types of securities each Fund may purchase under normal
market conditions to achieve its principal investment strategies.
U.S. Equity Securities (All Funds): Can include
common stock and securities that are convertible or exchangeable into common
stock of U.S. corporations.
Equity Securities of Foreign Companies (International
Fund): Can include common stock and convertible preferred stock of
non‑U.S. corporations. Also, may include American Depositary Receipts (ADRs) and
Global Depositary Receipts (GDRs), which are receipts issued by a bank or trust
company and evidence ownership of underlying securities issued by a foreign
corporation.
The
Sub‑Advisor may use several types of investments and investment techniques in
pursuing the Funds’ overall investment objective which the Sub‑Advisor does not
consider to be a part of a Fund’s principal investment strategies. Additional
types of securities and strategies that the Funds may utilize are included in
the Funds’ Statement of Additional Information (“SAI”).
RISK FACTORS
The
following describes the principal risks that you may assume as an investor in a
Fund. These risks could adversely affect the net asset value, total return and
the value of a Fund and your investment. The risk descriptions below provide a
more detailed explanation of the principal investment risks that correspond to
the risks described in the Summary Section of its Prospectus.
There
is no assurance that a Fund will achieve its investment objective. Each Fund’s
Share price will fluctuate with changes in the market value of its portfolio
investments. When you sell your Fund Shares, they may be worth less than what
you paid for them and, accordingly, you can lose money investing in the Funds.
No Fund, by itself, is intended to be a complete investment program.
Excluded Security Risk. Because the Funds do
not invest in Excluded Securities, the Funds may be riskier than other funds
that invest in a broader array of securities. BRI may not be successful. Because
each Fund’s respective index is reconstituted only at prescribed times during
the year, a Fund may temporarily hold securities that do not comply with the BRI
filtering criteria if the application of the criteria is changed in between
these dates.
Dividend Income Strategy Risk. The High
Dividend Fund’s dividend income strategy may not be successful. The stocks of
dividend paying companies may underperform the overall stock market. The High
Dividend Fund’s performance during a broad market advance could suffer because
dividend paying stocks may not experience the same capital appreciation as
non‑dividend paying stocks or other segments of the stock market. Performance
could also be negatively impacted if companies reduce their dividend payout.
Stock Market Risk. Overall stock market risks
may affect the value of a Fund. Factors such as domestic and international
economic growth and market conditions, interest rate levels, political events
and world-wide health issues can significantly affect the securities markets.
The world-wide economy is currently being significantly impacted by the COVID‑19
virus and the responses being undertaken by the world’s governments to address
the threat. The economic cost of this pandemic is not known and is difficult to
predict.
Equity Risk. The value of the equity securities
in which the Funds invest may decline in response to developments affecting
individual companies and/or general economic conditions. Price changes may be
temporary or last for extended periods.
ETF Structure Risk. Each Fund is structured as
an ETF and as a result is subject to special risks, including:
Not Individually
Redeemable. The Funds’ Shares (“Shares”) are not
individually redeemable and may be redeemed by the Fund at NAV only in large
blocks known as “Creation Units.” You may incur brokerage costs purchasing
enough Shares to constitute a Creation Unit. Alternatively, you may redeem your
Shares by selling them on the secondary market at prevailing market prices.
Trading
Issues. Although the Shares are listed on the Exchange,
there can be no assurance that an active, liquid or otherwise orderly trading
market for Shares will be established or maintained by market makers or
Authorized Participants, particularly in times of stressed market conditions.
Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable,
such as extraordinary market volatility. There can be no assurance that Shares
will continue to meet the listing requirements of the Exchange. There is no
guarantee that an active secondary market will develop for the Shares. In
stressed market conditions, the market for Shares may become less liquid in
response to deteriorating liquidity in the markets for the Fund’s underlying
portfolio holdings, which may lead to differences between the market price of
the Shares and the underlying value of those Shares.
Market Price Variance
Risk. Individual Shares of the Funds that are listed for
trading on the Exchange can be bought and sold in the secondary market at market
prices. The market prices of Shares will fluctuate in response to changes in NAV
and supply and demand for Shares. There may be times when the market price and
the NAV vary significantly and you may pay more than NAV when buying Shares on
the secondary market (a premium), and you may receive less than NAV when you
sell those Shares (a discount). The market price of Shares, like the price of
any exchange-traded security, includes a “bid‑ask spread” charged by the
exchange specialists, market makers or other participants that trade the
particular security. In times of severe market disruption, the bid‑ask spread
often increases significantly. This means that Shares may trade 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.
Each Fund’s investment results are measured based upon the daily NAV of the Fund
over a period of time. Investors purchasing and selling Shares in the secondary
market may not experience investment results consistent with those experienced
by those creating and redeeming directly with the Fund.
International Closed Market
Trading Risk. Many of the International Fund’s underlying
securities trade on foreign exchanges that are closed when the Exchange is open;
consequently, events may transpire while such foreign exchanges are closed but
the Exchange is open that may change the value of such underlying securities
relative to their last quoted prices on such foreign exchanges. Because the
International Fund generally relies on the last quoted prices for such
securities when calculating its NAV, such events may cause Shares to trade at a
premium or discount to NAV.
Authorized Participants
Concentration Risk. A limited number of financial
institutions may be responsible for all or a significant portion of the creation
and redemption activity for the Fund. In addition, there is no obligation for
market makers to make a market in the Fund’s shares or for Authorized
Participants to submit purchase or redemption orders for Creation Units. If
these firms exit the business or are unable or unwilling to process creation
and/or redemption orders, Shares may trade at a premium or discount to NAV.
Intraday Indicative Value
(IIV) Risk. The Exchange intends to disseminate the
approximate per share value of each Fund’s published basket of securities
(“Deposit Securities”) every 15 seconds (the “intraday indicative value” or
“IIV’’). The IIV is not a “real-time” update of the NAV per share of a Fund
because the IIV may not be calculated in the same manner as the NAV. For
example, the calculation of the NAV may be subject to fair valuation at
different prices than those used in the calculations of the IIV and, unlike the
calculation of NAV, the IIV does not take into account a Fund’s expenses. For
securities traded outside of
the
U.S., the IIV calculations are based on local market prices and may not reflect
events that occur subsequent to the local market’s close which could affect
premiums and discounts between the IIV and the market price of a Fund’s share.
In addition, the IIV is based on the published Deposit Securities and not on a
Fund’s actual holdings. The Funds, the Advisor, the Sub‑Advisor, and their
affiliates are not involved in, or responsible for, any aspect of the
calculation or dissemination of the IIV and make no warranty as to the accuracy
of these calculations.
Foreign Investment
Risk. (International Fund) Foreign securities, including
ADRs and GDRs, tend to be more volatile and less liquid than U.S. securities.
Further, foreign securities may be subject to additional risks not associated
with investment in U.S. securities due to differences in the economic and
political environment, the amount of available public information, the degree of
market regulation, and financial reporting, accounting and auditing standards,
and, in the case of foreign currency denominated securities, fluctuations in
currency exchange rates. In addition, during periods of social, political or
economic instability in a country or region, the value of a foreign security
could be affected by, among other things, increasing price volatility,
illiquidity or the closure of the primary market on which the security is
traded. In addition to foreign securities, the Fund may be exposed to foreign
markets as a result of the Fund’s investments in U.S. companies that have
international exposure.
Foreign Exchanges
Risk. The
International Fund will, and the other Funds may, place trades on exchanges in
foreign markets. Regulations of U.S. governmental agencies may not apply to
transactions on foreign markets. Some of these foreign markets, in contrast to
U.S. exchanges, are so‑called principals’ markets in which performance is the
responsibility only of the individual counterparty with whom the trader has
entered into a transaction and not of the exchange or clearing corporation. In
these kinds of markets, there is risk of bankruptcy or other failure or refusal
to perform by the counterparty.
Currency
Risk. Although each Fund will report its net asset value
and pay dividends in U.S. dollars, when a Fund invests on a foreign exchange in
foreign currency denominated or foreign currency-linked securities, the Fund
will be exposed to currency risk. This means that the Fund’s net asset value
could decline as a result of changes in the exchange rates between foreign
currencies and the U.S. dollar. Additionally, certain foreign countries may
impose restrictions on the ability of issuers of foreign securities to make
payment of principal and interest to investors located outside the country, due
to blockage of foreign currency exchanges or otherwise.
Market Price Variance
Risk. Individual Shares of the Funds that are listed for
trading on the Exchange can be bought and sold in the secondary market at market
prices. The market prices of Shares will fluctuate in response to changes in NAV
and supply and demand for Shares. There may be times when the market price and
the NAV vary significantly and you may pay more than NAV when buying Shares on
the secondary market (a premium), and you may receive less than NAV when you
sell those Shares (a discount). The market price of Shares, like the price of
any exchange-traded security, includes a “bid‑ask spread” charged by the
exchange specialists, market makers or other participants that trade the
particular security. In times of severe market disruption, the bid‑ask spread
often increases significantly. This means that Shares may trade 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.
Each Fund’s investment results are measured based upon the daily NAV of the Fund
over a period of time. Investors purchasing and selling Shares in the secondary
market may not experience investment results consistent with those experienced
by those creating and redeeming directly with the Fund.
Index/Defensive Positioning Risk. Because each
Fund’s underlying index’s allocation to cash versus securities is determined at
month‑end, there is a risk that the underlying index, and thus the Fund, will
not be able to immediately react to changes in market conditions that occur
between reallocations. During temporary periods when a Fund may be invested in
fixed income investments, the Fund would not benefit from any upswing in the
equity markets. The Fund would also incur transaction costs and potentially
adverse tax consequences in the event the Fund allocates to cash.
Large Capitalization Stock Risk. (Large/Mid Cap
and High Dividend Funds) The securities of large cap companies may underperform
the securities of smaller cap companies or the market as a whole. Larger, more
established companies may not respond as quickly to competitive challenges (such
as changes in technology and consumer tastes) and their growth rate may lag
those of smaller companies, especially during periods of economic expansion.
Limited History of Operations. Each Enhanced
Fund is a relatively new ETF and has a limited history of operations.
Liquidity Risk. In certain circumstances, such
as the disruption of the orderly markets for the securities in which the Fund
invests, the Fund might not be able to dispose of certain holdings quickly or at
prices that represent true market value in the judgment of the Advisor. Markets
for the securities in which the Fund invests may be disrupted by a number of
events, including but not limited to economic crises, natural disasters, new
legislation or regulatory changes, and may prevent the Fund from limiting
losses, realizing gains or achieving a high correlation with the Index.
Passive Investment Risk. The Funds are not
actively managed and may be affected by a general decline in market segments
related to their respective Index. The Funds invest in securities included in,
or representative of securities included in, their respective Index, regardless
of their investment merits. The Funds do not take defensive positions under any
market conditions, including conditions that are adverse to the performance of
the Funds, unless such defensive positions are also taken by the applicable
Index. The Sub‑Advisor has created each Index, which may result in potential
conflicts of interest. Potential conflicts include the possibility of misuse or
improper dissemination of non‑public information about contemplated changes to
the composition of an Index. The Sub‑Advisor has adopted policies and procedures
which it believes are reasonably designed to prevent or mitigate these potential
conflicts. There is no assurance that an Index will be compiled or calculated
accurately.
Smaller Capitalization Stock Risk. The Small
Cap ETF invests in smaller companies and the Large/Mid Cap Fund invests in
medium sized companies. The earnings and prospects of small and medium sized
companies tend to be more volatile than larger companies and may experience
higher failure rates than larger companies. The stocks of smaller cap companies
may have a lower trading volume than larger companies, which may tend to make
their market price fall more disproportionately than larger companies in
response to selling pressures and may have limited markets, product lines, or
financial resources and lack management experience. These risks are generally
greater with respect to small‑cap securities.
Sampling Risk. The International Fund’s use of
a representative sampling strategy will result in it holding a smaller number of
securities than are in the Index. As a result, an adverse development with one
or a small number of issuers of securities held by the Fund could result in a
greater decline in NAV than would be the case if the Fund held all of the
securities in the Index. To the extent the assets in the Fund are smaller, these
risks will be greater.
Tracking Risk. There is no guarantee that a
Fund will achieve a high degree of correlation to its Index and therefore
achieve its investment objective. Market disruptions and regulatory restrictions
could have an adverse effect on a Fund’s ability to adjust its exposure to the
required levels in order to track the Index. Errors in index data, index
computations and/or the construction of the Index in accordance with its
methodology may occur from time to time and may not be identified and corrected
by S‑Networks Global Index for a period of time or at all, which may have an
adverse impact on a Fund and its shareholders. In addition, a Fund may not be
able to replicate exactly the performance of its Index because of transaction
costs incurred by the Fund in adjusting the actual balance of the investments in
the Fund’s portfolio. Additionally, a Fund’s use of a representative sampling
strategy can be expected to produce a greater tracking risk than a replication
strategy.
Section 3
| Organization and Management of the Funds
The
Funds’ Board of Trustees has the overall responsibility for overseeing the
management of the Funds.
THE INVESTMENT ADVISOR
Timothy
Partners, Ltd. (“TPL”), 1055 Maitland Center Commons Boulevard, Maitland, FL
32751, is a Florida limited partnership organized on December 6, 1993, and
is registered with the Securities and Exchange Commission as an investment
Advisor. TPL supervises the investment of the assets of the Funds in accordance
with the objectives, policies and restrictions of the Trust. TPL approves the
portfolio of securities selected by the Sub‑Advisor. To determine which
securities are Excluded Securities, TPL conducts its own research and consults a
number of Christian ministries on these issues. TPL retains the right to change
the sources from whom it acquires its information, at its discretion. TPL has
been the Advisor to each Fund since its inception on April 29, 2019,
December 2, 2019, or July 29, 2021, as applicable.
THE MANAGING GENERAL
PARTNER
Covenant
Funds, Inc., a Florida corporation (“CFI”), is the managing general partner of
TPL. Arthur D. Ally is President, Chairman and Trustee of the Trust, as well as
President and 75% shareholder of CFI. Mr. Ally had over eighteen years of
experience in the investment industry prior to founding TPL, having worked for
Prudential Bache, Shearson Lehman Brothers and Investment Management &
Research. Some or all of these firms may be utilized by the Sub‑Advisor to
execute portfolio trades for a Fund. Neither Mr. Ally nor any affiliated
person of the Trust will receive any benefit from such transactions.
TPL
has arranged for distribution, custody, fund administration, transfer agency and
all other services necessary for the Funds to operate. The Advisor receives a
fee for its services, (the “Management Fee”). From the Management Fee, the
Advisor is obligated to pay or arrange for the payment of substantially all
expenses of the Funds, including the cost of transfer agency, custody, fund
administration and accounting, legal, audit, independent trustees and other
services, except for interest expenses, distribution fees or expenses, brokerage
expenses, acquired fund fees and expenses, taxes and extraordinary expenses such
as litigation and other expenses not incurred in the ordinary course of the
Fund’s business.
The
Advisor’s Management Fee is designed to cause substantially all of the Funds’
expenses to be paid by the Adviser, and to compensate the Advisor for providing
services for the Funds. The Large/Mid Cap Fund, Small Cap Fund, High Dividend
Fund Large/Mid Cap Core Enhanced Fund, and High Dividend Stock Enhanced Fund
each pay TPL a Management Fee equivalent to 0.52% annually of the Fund’s average
daily net assets, computed daily and paid monthly. The International Fund pays
TPL a Management Fee equivalent to 0.62% annually of the Fund’s average daily
net assets, computed daily and paid monthly.
A
discussion of the considerations employed by the Board of Trustees in their
approval of TPL as Advisor to the Fund, and the Sub‑Advisor as manager of the
Funds, will be available in the Funds’ semi-annual report dated June 30,
2021.
TPL,
with the Trust’s consent, has engaged the services of the Sub‑Advisor described
below to provide day‑to‑day investment advisory services to the Fund. TPL pays
all fees charged by the Sub‑Advisor for such services.
THE SUB‑ADVISOR
TPL,
with the consent of the Trust’s Board, has entered into a Sub‑Advisory Agreement
with Victory Capital Management, Inc., (“Victory Capital” or the “Sub‑Advisor”)
through its Victory Solutions team, located at 4900
Tiedeman
Road, 4th Floor, Brooklyn, Ohio 44144 (the “Sub‑Advisor”). The Sub‑Advisor is a
New York corporation registered as an investment adviser with the Securities and
Exchange Commission (“SEC”). The Sub‑Advisor manages the investment portfolios
of the Funds according to investment policies and procedures adopted by the
Board of Trustees. As of March 31, 2022, the Sub‑ Advisor managed or
advised assets totaling approximately $2.031 billion for individual and
institutional clients.
The
Sub‑Advisor is a multi-boutique asset manager comprised of multiple investment
teams. The Sub‑Advisor’s Victory Solutions portfolio management team oversees
the Sub‑Advisor’s rules-based investment strategies and is responsible for the
day‑to‑day investment management of the Funds.
A
discussion of the Board’s most recent considerations in renewing the
Sub‑Advisory Agreement will be available in the Funds’ semi-annual report dated
June 30, 2022.
PORTFOLIO MANAGEMENT
Mannik
Dhillon and Free Foutz are Co‑Portfolio Managers of the Funds and are jointly
responsible for the day‑to‑day management of the Funds’ portfolios.
Mr. Dhillon,
CFA and CAIA®, is
President of Victory Capital’s VictoryShares and Solutions platform. From 2015-
2017, he served as the Sub‑Advisor’s Head of Investment Solutions, Product, and
Strategy. From 2010 to 2015, Mr. Dhillon served as a managing director and
head of manager research with Wilshire Associates, where he evaluated asset
managers and led strategic consulting engagements. Mr. Dhillon is a CFA
charter holder.
Free
Foutz is the Portfolio Implementation Manager for Victory Capital’s
VictoryShares and Solutions platform with over 18 years of industry experience.
From 2002 to 2015, when he joined Victory Capital, Mr. Foutz held various
research and portfolio management positions with Charles Schwab & Co.
The
Funds’ SAI provides additional information about the portfolio managers’ method
of compensation, other accounts managed by the portfolio managers and the
portfolio managers’ ownership of securities in the Funds.
SHARE PRICE
The
net asset value (“NAV”) of each Fund is generally determined at 4:00 p.m.
(Eastern Time) on each day the New York Stock Exchange (“NYSE”) is open for
business. In the event of an emergency or other disruption in trading on the
NYSE, a Fund’s net asset value will be determined based upon the close of the
NYSE. The NAV is computed by determining the aggregate market value of all
assets of a Fund, less its liabilities, divided by the total number of shares
outstanding (NAV = (assets- liabilities)/number of shares). The NYSE is closed
on weekends and New Year’s Day, Martin Luther King, Jr. Day, President’s Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. The NAV takes into account the expenses and fees of a Fund,
including management, administration, and distribution fees (if any), which are
accrued daily. The determination of NAV for a Fund for a particular day is
applicable to all applications for the purchase of Shares, as well as all
requests for the redemption of Shares, received by a Fund (or an authorized
broker or agent, or its authorized designee) before the close of trading on the
NYSE on that day.
Generally,
the Funds’ investments are valued each day at the last quoted sales price on
each investment’s primary exchange. Investments traded or dealt in upon one or
more exchanges (whether domestic or foreign) for which market quotations are
readily available and not subject to restrictions against resale shall be valued
at the last quoted sales price on the primary exchange or, in the absence of a
sale on the primary exchange, at the last bid on the primary exchange.
Securities primarily traded in the National Association of Securities Dealers’
Automated Quotation System (“NASDAQ”) National Market System for which market
quotations are readily available shall be
valued
using the NASDAQ Official Closing Price. If market quotations are not readily
available, investments will be valued at their fair market value as determined
in good faith by the Advisor in accordance with procedures approved by the Board
and evaluated by the Board as to the reliability of the fair value method used.
In these cases, a Fund’s NAV will reflect certain portfolio investments’ fair
value rather than their market price. Fair value pricing involves subjective
judgments and it is possible that the fair value determined for an investment is
materially different than the value that could be realized upon the sale of that
investment. The fair value prices can differ from market prices when they become
available or when a price becomes available.
A
Fund may use independent pricing services to assist in calculating the value of
the Fund’s securities or other assets. In addition, market prices for foreign
securities are not determined at the same time of day as the NAV for a Fund. In
computing the NAV, immediately prior to closing of the NYSE, a Fund values the
foreign securities held by the Fund at the latest closing price on the exchange
in which they are traded. Prices of foreign securities quoted in foreign
currencies are translated into U.S. dollars at current rates. The value of a
Fund’s securities may change on days when shareholders are not able to purchase
and redeem the Fund’s Shares if the Fund has portfolio securities that are
primarily traded in foreign markets that are open on weekends or other days when
the Fund does not price its Shares. If events materially affecting the value of
a security in a Fund’s portfolio, particularly foreign securities, occur after
the close of trading on a foreign market but before a Fund prices its shares,
the security will be valued at fair value. For example, if trading in a
portfolio security is halted and does not resume before a Fund calculates its
NAV, the Advisor may need to price the security using a Fund’s fair value
pricing guidelines. Without a fair value price, short-term traders could take
advantage of the arbitrage opportunity and dilute the NAV of long-term
investors. Fair valuation of a Fund’s portfolio securities can serve to reduce
arbitrage opportunities available to short-term traders, but there is no
assurance that fair value pricing policies will prevent dilution of a Fund’s NAV
by short term traders. The determination of fair value involves subjective
judgments. As a result, using fair value to price a security may result in a
price materially different from the prices used by other mutual funds to
determine net asset value, or from the price that may be realized upon the
actual sale of the security.
With
respect to any portion of a Fund’s assets that are invested in one or more
open‑end management investment companies registered under the Investment Company
Act of 1940, as amended (“1940 Act”), each Fund’s net asset value is calculated
based upon the net asset values of those open‑end management investment
companies, and the prospectuses for these companies explain the circumstances
under which those companies will use fair value pricing and the effects of using
fair value pricing.
Short-term
debt obligations with remaining maturities in excess of 60 days are valued at
current market prices, as discussed above. Short- term debt obligations with 60
days or less remaining to maturity are, unless conditions indicate otherwise,
amortized to maturity based on their cost to the Fund if acquired within 60 days
of maturity or, if already held by the Fund on the 60th day, based on the value
determined on the 61st day.
PREMIUM/DISCOUNT
INFORMATION
Most
investors will buy and sell Shares of the Funds in secondary market transactions
through brokers at market prices and a Fund’s Shares will trade at market
prices. The market price of Shares may be greater than, equal to, or less than
NAV. Market forces of supply and demand, economic conditions and other factors
may affect the trading prices of Shares of each Fund.
Information
about each Fund’s daily market price and how often Shares of each Fund traded on
the listing exchange at a price above (i.e., at a premium) or below (i.e., at a
discount) the NAV of each Fund can be found at timothyplan.com under
Form & Docs: Timothy Plan ETFs.
HOW TO BUY AND SELL
SHARES
Shares
of each Fund will be listed for trading on the Exchange under the ticker symbols
listed on the cover of this Prospectus. Share prices are reported in dollars and
cents per Share. Shares can be bought and sold on the
secondary
market throughout the trading day like other publicly traded shares, and shares
typically trade in blocks of less than a Creation Unit. There is no minimum
investment required. Shares may only be purchased and sold on the secondary
market when the Exchange is open for trading. The Exchange is open for trading
Monday through Friday and is closed on weekends and the following holidays, as
observed: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
When
buying or selling Shares through a broker, you will incur customary brokerage
commissions and charges. The commission is often a fixed amount and may be a
significant proportional cost for investors seeking to buy or sell smaller
amounts of Shares. You may also pay some or all of the spread between the bid
and the offered price in the secondary market on each leg of a round trip
(purchase and sale) transaction. The spread varies over time for shares of the
Fund based on the Fund’s trading volume and market liquidity, and is generally
lower if a Fund’s Shares have more trading volume and market liquidity and
higher if a Fund’s Shares have little trading volume and market liquidity.
Only
an Authorized Participant (“AP”) may engage in creation or redemption
transactions directly with the Fund. The Funds’ APs are institutions and large
investors, such as market makers or other large broker-dealers, which have
entered into a Participation Agreement with the Funds’ Distributor to undertake
the responsibility of obtaining or selling the underlying assets needed to
purchase or redeem, respectively, Creation Units of the Funds. APs may acquire
Shares directly from a Fund, and APs may tender their Shares for redemption
directly to a Fund, at NAV per share only in large blocks, or Creation Units, of
50,000 shares. Purchases and redemptions directly with a Fund must follow the
Funds’ procedures, which are described in the SAI.
The
Funds may liquidate and terminate at any time without shareholder approval.
SHARE TRADING PRICES
The
trading prices of a Fund’s Shares in the secondary market generally differ from
the Fund’s daily NAV and are affected by market forces such as the supply of and
demand for ETF shares and shares of underlying securities held by the Fund,
economic conditions and other factors. The approximate value of Shares will be
disseminated every 15 seconds throughout the trading day through the facilities
of the Consolidated Tape Association. This approximate value should not be
viewed as a “real-time” update of the NAV per share of a Fund because the
approximate value may not be calculated in the same manner as the NAV, which is
computed once a day, generally at the end of the business day. The approximate
value generally is determined by using current market quotations. The quotations
of certain Fund holdings may not be updated during U.S. trading hours if such
holdings do not trade in the U.S. The Funds are not involved in, or responsible
for, the calculation or dissemination of the approximate value of the Shares and
the Funds do not make any warranty as to the accuracy of these values.
BOOK ENTRY
Shares
are held in book entry form, which means that no stock certificates are issued.
The Depository Trust Company (“DTC”) or its nominee is the record owner of all
outstanding Shares of the Funds and is recognized as the owner of all Shares for
all purposes.
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.
Participants in DTC 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” form.
FREQUENT PURCHASES AND
REDEMPTIONS OF FUND SHARES
Each
Fund’s Shares can only be purchased and redeemed directly from a Fund by APs in
Creation Units. Direct trading by APs is critical to ensuring that a Fund’s
Shares trade at or close to NAV. The cash to be contributed to (or received
from) the Fund in connection with a Creation Unit generally is negligible
compared to the total amount of the trade. The Funds with exposure to non‑U.S.
securities employ fair valuation pricing to minimize arbitrage opportunities
that attempt to exploit the differences between a security’s market quotation
and its fair value. In addition, the Funds impose transaction fees on purchases
and redemptions of Shares to cover the custodial and other costs incurred by the
Funds in effecting trades. These fees increase if an investor substitutes cash
in part or in whole for securities, reflecting the fact that a Fund’s trading
costs increase in those circumstances.
The
vast majority of trading in a Fund’s Shares occurs on the secondary market.
Because the secondary market trades do not directly involve the Funds, it is
unlikely those trades would cause the harmful effects of market timing,
including dilution, disruption of portfolio management, increases in a Fund’s
trading costs and the realization of capital gains.
Given
this structure, the Board has determined that it is not necessary to monitor for
frequent in‑kind purchases and redemptions of Shares or market timing activity
by the APs or on the Shares’ secondary market.
Section 4
| Distributions and Taxes
Unlike
interests in conventional mutual funds, which typically are bought and sold from
and to a fund only at closing NAVs, each Fund’s Shares are traded throughout the
day in the secondary market on a national securities exchange on an intra‑day
basis and are created and redeemed in‑kind and/or for cash in Creation Units at
each day’s next calculated NAV. In‑kind arrangements are designed to protect
ongoing shareholders from the adverse effects on a Fund’s portfolio that could
arise from frequent cash redemption transactions. In a conventional mutual fund,
redemptions can have an adverse tax impact on taxable shareholders if the mutual
fund needs to sell portfolio securities to obtain cash to meet net fund
redemptions. These sales may generate taxable gains for the ongoing shareholders
of the mutual fund, whereas the Shares’ in‑kind redemption mechanism generally
will not lead to a tax event for the Fund or its ongoing shareholders.
Ordinarily,
dividends from net investment income, if any, are declared and paid monthly by
each Fund. Each Fund distributes its net realized capital gains, if any, to
shareholders annually.
Distributions
in cash may be reinvested automatically in additional whole shares only if the
broker through whom you purchased Shares makes such option available.
As
with any investment, you should consider how your investment in shares will be
taxed. The tax information in this Prospectus is provided as general
information. You should consult your own tax professional about the tax
consequences of an investment in Shares.
Unless
your investment in Shares is made through a tax‑exempt entity or tax‑deferred
retirement account, such as an individual retirement account, you need to be
aware of the possible tax consequences when:
|
• |
|
A
Fund makes distributions, |
|
• |
|
You
sell your shares listed on the Exchange, and |
|
• |
|
You
purchase or redeem Creation Units. |
TAXES ON DISTRIBUTIONS
As
stated above, each Fund ordinarily declares and pays dividends from net
investment income, if any, monthly. The Funds may also pay a special
distribution at the end of a calendar year to comply with federal tax
requirements. Distributions from a Fund’s net investment income, including net
short-term capital gains, if any, are taxable to you as ordinary income, except
that a Fund’s dividends attributable to its “qualified dividend income” (i.e.,
dividends received on stock of most domestic and certain foreign corporations
with respect to which a Fund satisfies certain holding periods and other
restrictions), if any, generally are taxable to non‑corporate shareholders at
preferential rates. A part of a Fund’s dividends also may be eligible for the
dividends-received deduction allowed to corporations, subject to similar
restrictions.
In
general, your distributions are subject to federal income tax when they are
paid, whether you take them in cash or reinvest them in a Fund (if that option
is available). Distributions reinvested in additional shares of a Fund through
the means of a dividend reinvestment service, if available, will be taxable to
shareholders acquiring the additional shares to the same extent as if such
distributions had been received in cash. Distributions of net long-term capital
gains, if any, in excess of net short- term capital losses are taxable as
long-term capital gains (at the 20% maximum rate referred to above for
non‑corporate shareholders), regardless of how long you have held the shares.
Distributions
in excess of a Fund’s current and accumulated earnings and profits are treated
as a tax‑free return of capital to the extent of your basis in the Shares and as
capital gain thereafter. A distribution will reduce a Fund’s NAV per Share and
may be taxable to you as ordinary income or capital gain (as described above)
even though, from an investment standpoint, the distribution may constitute a
return of capital.
By
law, the Funds are required to withhold 28% of your distributions and redemption
proceeds if you have not provided the Funds with a correct Social Security
number or other taxpayer identification number and in certain other situations.
TAXES ON EXCHANGE-LISTED
SHARE SALES
Any
capital gain or loss realized upon a sale of shares is generally treated as
long-term capital gain or loss if the shares have been held for more than one
year and as short-term capital gain or loss if the shares have been held for one
year or less. The ability to deduct capital losses from sales of Shares may be
limited.
TAXES ON PURCHASE AND
REDEMPTION OF CREATION UNITS
An
AP who exchanges securities for Creation Units generally will recognize a gain
or a loss equal to the difference between the market value of the Creation Units
at the time of the exchange and the sum of the exchanger’s aggregate basis in
the securities surrendered plus any Cash Component it pays. An AP who exchanges
Creation Units for securities will generally recognize a gain or loss equal to
the difference between the exchanger’s basis in the Creation Units and the sum
of the aggregate market value of the securities received plus any cash equal to
the difference between the NAV of the shares being redeemed and the value of the
securities. The Internal Revenue Service (“Service”), however, may assert that a
loss realized upon an exchange of securities for Creation Units cannot be
deducted currently under the rules governing “wash sales” or for other reasons.
Persons exchanging securities should consult their own tax adviser 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 the shares have been held for more
than one year and as short-term capital gain or loss if the shares have been
held for one year or less.
If
you purchase or redeem Creation Units, you will be sent a confirmation statement
showing how many shares you purchased or sold and at what price. See “Taxes” in
the SAI for a description of the requirement regarding basis determination
methods applicable to Share redemptions and the Fund’s obligation to report
basis information to the Service.
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. Consult your personal tax adviser about the potential tax
consequences of an investment in the Shares under all applicable tax laws.
Section 5
| Other Information
CONTINUOUS OFFERING
The
method by which Creation Units of Shares are created and traded may raise
certain issues under applicable securities laws. Because new Creation Units of
Shares are issued and sold by the Funds on an ongoing basis, a “distribution,”
as such term is used in the Securities Act of 1933, as amended (the “Securities
Act”), may occur at any point. Broker-dealers and other persons are cautioned
that some activities on their part may, depending on the circumstances, result
in their being deemed participants in a distribution in a manner which could
render them statutory underwriters and subject them to the prospectus delivery
requirement and liability provisions of the Securities Act.
For
example, a broker-dealer firm or its client may be deemed a statutory
underwriter if it takes Creation Units after placing an order with the
Distributor, breaks them down into constituent Shares and sells the Shares
directly to customers or if it chooses to couple the creation of a supply of new
Shares with an active selling effort involving solicitation of secondary market
demand for Shares. A determination of whether one is an underwriter for purposes
of the Securities Act must take into account all the facts and circumstances
pertaining to the activities of the broker-dealer or its client in the
particular case, and the examples mentioned above should not be considered a
complete description of all the activities that could lead to a characterization
as an underwriter.
Broker-dealer
firms should also note that dealers who are not “underwriters” but are effecting
transactions in Shares, whether or not participating in the distribution of
Shares, are generally required to deliver a prospectus. This is because the
prospectus delivery exemption in Section 4(3) of the Securities Act is not
available in respect of such transactions as a result of Section 24(d) of
the 1940 Act. As a result, broker-dealer firms should note that dealers who are
not “underwriters” but are participating in a distribution (as contrasted with
engaging in ordinary secondary market transactions) and thus dealing with the
Shares that are part of an overallotment within the meaning of
Section 4(3)(C) of the Securities Act, will be unable to take advantage of
the prospectus delivery exemption provided by Section 4(3) of the
Securities Act. For delivery of prospectuses to exchange members, the prospectus
delivery mechanism of Rule 153 under the Securities Act is only available with
respect to transactions on a national exchange.
Dealers
effecting transactions in the Funds’ Shares, whether or not participating in
this distribution, are generally required to deliver a Prospectus. This is in
addition to any obligation of dealers to deliver a Prospectus when acting as
underwriters.
PORTFOLIO HOLDINGS
DISCLOSURE
A
description of the Funds’ policies regarding disclosure of the securities in
each Fund’s portfolio is found in the Statement of Additional Information. Each
Fund’s portfolio is disclosed daily on the Funds’ website at timothyplan.com.
Shareholders
may also request portfolio holdings schedules at no charge by calling toll free
1‑800‑846‑7526.
SHAREHOLDER
COMMUNICATIONS
In
order to eliminate duplicate mailings to an address at which two or more
shareholders with the same last name reside, the Timothy Plan may send only one
copy of any shareholder reports, proxy statements, prospectuses and
their
supplements, unless you have instructed U.S. to the contrary. You may request
that the Timothy Plan send these documents to each shareholder individually by
calling the Timothy Plan at 1‑866‑846‑7526, and they will be delivered promptly.
While
this Prospectus and the SAI of the Trust describe pertinent information about
the Trust and each Fund, neither this Prospectus nor the SAI represents a
contract between the Trust or a Fund and any shareholder.
DISCLAIMERS
Shares
are not sponsored, endorsed, or promoted by the Exchange. The Exchange makes no
representation or warranty, express or implied, to the owners of the Shares or
any member of the public regarding the ability of the Funds to track the total
return performance of their respective Index or the ability of each Index
identified herein to track stock market performance. The Exchange is not
responsible for, nor has it participated in, the determination of the
compilation or the calculation of each Index, nor in the determination of the
timing of, prices of, or quantities of the Shares to be issued, nor in the
determination or calculation of the equation by which the Shares are redeemable.
The Exchange has no obligation or liability to owners of the Shares in
connection with the administration, marketing, or trading of the Shares.
The
Exchange does not guarantee the accuracy and/or the completeness of each Index
or the data included therein. The Exchange makes no warranty, express or
implied, as to results to be obtained by the Trust on behalf of the Funds,
owners of the Shares, or any other person or entity from the use of each Index
or the data included therein.
The
Exchange makes no express or implied warranties, and hereby expressly disclaims
all warranties of merchantability or fitness for a particular purpose with
respect to the Index or the data included therein. 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.
Section 6
| Other Service
Providers
|
|
|
Citi
Fund Services Ohio, Inc. |
|
4400 Easton Commons, Suite 200,
Columbus, OH 43219, serves as administrator and fund accountant for the
Funds. |
|
|
Citibank, N.A. |
|
388 Greenwich Street, New York, NY,
serves as transfer agent and custodian of the Funds’ assets. |
|
|
Foreside
Distributors |
|
3
Canal Plaza, Suite 100, Portland, ME 04101, serves as distributor for the
continuous offering of each Fund’s shares. |
|
|
Cohen & Company, Ltd. |
|
1350 Euclid Avenue, Suite 800,
Cleveland, Ohio 44115, serves as the Independent Registered Public
Accounting firm for the Funds. |
|
|
David
Jones, Esq. |
|
395 Sawdust Road, # 2137, The Woodlands,
TX 77380, serves as legal counsel to the Funds. |
Section 7
| Financial Highlights
The
table below sets forth data for one share of capital stock outstanding
throughout each period represented.
The
Financial Highlights Table is intended to help you understand each Fund’s
financial performance for the past five fiscal years (or, if shorter, the
period(s) since each Fund’s inception). Certain information reflects financial
results for a single Fund share. The total returns in the table represent the
rate that an investor would have earned (or lost) on an investment in the Funds
(assuming reinvestment of all dividends and distributions). The information
contained in the tables for the periods ended December 31, 2021 and prior
have been audited by Cohen & Company, Ltd., Independent Registered
Public Accounting Firm, whose report, along with the Funds’ financial
statements, are included in the annual report, which is available upon request.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US SMALL CAP CORE ETF |
|
|
US LARGE/MID CAP CORE ETF |
|
|
|
|
|
|
|
|
|
|
For
the Year Ended 12/31/2021 |
|
|
For
the Year Ended 12/31/2020 |
|
|
For the period 12/3/2019(a) to 12/31/2019 |
|
|
For
the Year Ended 12/31/2021 |
|
|
For
the Year Ended 12/31/2020 |
|
|
For the period 5/1/2019(a) to 12/31/2019 |
|
|
|
|
|
|
|
|
Net
Asset Value, Beginning of Period |
|
$ |
27.71 |
|
|
$ |
25.55 |
|
|
$ |
24.73 |
|
|
|
$30.93 |
|
|
$ |
27.23 |
|
|
$ |
25.16 |
|
|
|
|
|
|
|
|
Investment Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Investment Income (Loss)(b) |
|
|
0.40 |
|
|
|
0.32 |
|
|
|
0.02 |
|
|
|
0.24 |
|
|
|
0.23 |
|
|
|
0.21 |
|
|
|
|
|
|
|
|
Net
Realized and Unrealized Gains (Losses) on Investments |
|
|
7.78 |
|
|
|
2.15 |
|
|
|
0.82 |
|
|
|
7.72 |
|
|
|
3.72 |
|
|
|
2.04 |
|
|
|
|
|
|
|
|
Total
from Investment Activities |
|
|
8.18 |
|
|
|
2.47 |
|
|
|
0.84 |
|
|
|
7.96 |
|
|
|
3.95 |
|
|
|
2.25 |
|
|
|
|
|
|
|
|
Distributions to
Shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Investment Income |
|
|
(0.40 |
) |
|
|
(0.31 |
) |
|
|
(0.02 |
) |
|
|
(0.24) |
|
|
|
(0.25 |
) |
|
|
(0.18 |
) |
|
|
|
|
|
|
|
Total
Distributions |
|
|
(0.40 |
) |
|
|
(0.31 |
) |
|
|
(0.02 |
) |
|
|
(0.24) |
|
|
|
(0.25 |
) |
|
|
(0.18 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Asset Value, End of Period |
|
$ |
35.49 |
|
|
$ |
27.71 |
|
|
$ |
25.55 |
|
|
|
$38.65 |
|
|
$ |
30.93 |
|
|
$ |
27.23 |
|
|
|
|
|
|
|
|
Total Return(c) |
|
|
29.62% |
|
|
|
9.99% |
|
|
|
3.39% |
|
|
|
25.82% |
|
|
|
14.67% |
|
|
|
9.01% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of Expenses to Average Net
Assets(d) |
|
|
0.52% |
|
|
|
0.52% |
|
|
|
0.52% |
|
|
|
0.52% |
|
|
|
0.52% |
|
|
|
0.52% |
|
|
|
|
|
|
|
|
Ratio of Net Investment Income (Loss) to
Average Net Assets(d) |
|
|
1.20% |
|
|
|
1.45% |
|
|
|
0.89% |
|
|
|
0.69% |
|
|
|
0.88% |
|
|
|
1.22% |
|
|
|
|
|
|
|
|
Net
Assets, End of Period (000’s) |
|
|
56,792 |
|
|
$ |
31,869 |
|
|
$ |
10,222 |
|
|
|
$168,140 |
|
|
$ |
163,904 |
|
|
$ |
134,795 |
|
|
|
|
|
|
|
|
Portfolio
Turnover(c) |
|
|
57% |
|
|
|
78% |
|
|
|
— |
|
|
|
27% |
|
|
|
45% |
|
|
|
17% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts
designated as “—” are 0 or have been rounded to 0. |
|
(a) |
Commencement
of operations. |
(b) |
Per
share net investment income (loss) has been calculated using the average
daily shares method. |
(c) |
Not
annualized for periods less than one year. |
(d) |
Annualized
for periods less than one year. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HIGH DIVIDEND STOCK ETF |
|
|
INTERNATIONAL ETF |
|
|
|
|
|
|
|
|
|
|
For
the Year Ended 12/31/2021 |
|
|
For
the Year Ended 12/31/2020 |
|
|
For the period 5/1/2019(a)
to 12/31/2019 |
|
|
For
the Year Ended 12/31/2021 |
|
|
For
the Year Ended 12/31/2020 |
|
|
For the period 12/3/2019(a) to 12/31/2019 |
|
|
|
|
|
|
|
|
Net
Asset Value, Beginning of Period |
|
$ |
25.88 |
|
|
$ |
26.89 |
|
|
$ |
25.10 |
|
|
|
$26.98 |
|
|
$ |
25.58 |
|
|
$ |
24.80 |
|
|
|
|
|
|
|
|
Investment
Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Investment Income (Loss)(b) |
|
|
0.61 |
|
|
|
0.57 |
|
|
|
0.48 |
|
|
|
0.56 |
|
|
|
0.47 |
|
|
|
0.04 |
|
|
|
|
|
|
|
|
Net
Realized and Unrealized Gains (Losses) on Investments |
|
|
6.60 |
|
|
|
(0.96 |
)(c) |
|
|
1.74 |
|
|
|
2.21 |
|
|
|
1.40 |
|
|
|
0.77 |
|
|
|
|
|
|
|
|
Total
from Investment Activities |
|
|
7.21 |
|
|
|
(0.39 |
) |
|
|
2.22 |
|
|
|
2.77 |
|
|
|
1.87 |
|
|
|
0.81 |
|
|
|
|
|
|
|
|
Distributions
to Shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Investment Income |
|
|
(0.60 |
) |
|
|
(0.62 |
) |
|
|
(0.43 |
) |
|
|
(0.69) |
|
|
|
(0.47 |
) |
|
|
(0.03 |
) |
|
|
|
|
|
|
|
Total
Distributions |
|
|
(0.60 |
) |
|
|
(0.62 |
) |
|
|
(0.43 |
) |
|
|
(0.69) |
|
|
|
(0.47 |
) |
|
|
(0.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Asset Value, End of Period |
|
$ |
32.49 |
|
|
$ |
25.88 |
|
|
$ |
26.89 |
|
|
|
$29.06 |
|
|
$ |
26.98 |
|
|
$ |
25.58 |
|
|
|
|
|
|
|
|
Total Return(d) |
|
|
28.10% |
|
|
|
(1.17)% |
|
|
|
9.00% |
|
|
|
10.34% |
|
|
|
7.66% |
|
|
|
3.25% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of Expenses to Average Net
Assets(e) |
|
|
0.52% |
|
|
|
0.52% |
|
|
|
0.52% |
|
|
|
0.62% |
|
|
|
0.62% |
|
|
|
0.62% |
|
|
|
|
|
|
|
|
Ratio of Net Investment Income (Loss) to
Average Net Assets(e) |
|
|
2.07% |
|
|
|
2.45% |
|
|
|
2.81% |
|
|
|
1.94% |
|
|
|
1.98% |
|
|
|
1.99% |
|
|
|
|
|
|
|
|
Net
Assets, End of Period (000’s) |
|
|
131,582 |
|
|
$ |
122,911 |
|
|
$ |
94,132 |
|
|
|
82,827 |
|
|
$ |
71,500 |
|
|
$ |
23,018 |
|
|
|
|
|
|
|
|
Portfolio
Turnover(d) |
|
|
43% |
|
|
|
68% |
|
|
|
23% |
|
|
|
42% |
|
|
|
63% |
|
|
|
12% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts
designated as “—” are 0 or have been rounded to 0. |
|
(a) |
Commencement
of operations. |
(b) |
Per
share net investment income (loss) has been calculated using the average
daily shares method. |
(c) |
Realized
and unrealized gains per share in this caption are balancing amounts
necessary to reconcile the change in net asset value per share for the
period, and may not reconcile with the aggregate gains and losses in the
Statements of Operations due to share transactions for the period.
|
(d) |
Not
annualized for periods less than one year. |
(e) |
Annualized
for periods less than one year. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US LARGE/ MID CAP CORE ENHANCED ETF |
|
|
HIGH DIVIDEND STOCK ENHANCED
ETF |
|
|
|
|
|
|
For the Period
July 29, 2021(a) to
December 31,
2021 |
|
|
For the Period
July 29, 2021(a) to
December 31,
2021 |
|
|
|
|
Net
Asset Value, Beginning of Period |
|
$ |
25.00 |
|
|
|
$25.00 |
|
|
|
|
Investment
Activities: |
|
|
|
|
|
|
|
|
|
|
|
Net
Investment Income (Loss)(b) |
|
|
0.11 |
|
|
|
0.28 |
|
|
|
|
Net
Realized and Unrealized Gains (Losses) on Investments |
|
|
2.16 |
|
|
|
1.86 |
|
|
|
|
Total
from Investment Activities |
|
|
2.27 |
|
|
|
2.14 |
|
|
|
|
Distributions
to Shareholders: |
|
|
|
|
|
|
|
|
|
|
|
Net
Investment Income |
|
|
(0.08 |
) |
|
|
(0.24) |
|
|
|
|
Total
Distributions |
|
|
(0.08 |
) |
|
|
(0.24) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Asset Value, End of Period |
|
$ |
27.19 |
|
|
|
$26.90 |
|
|
|
|
Total Return(c) |
|
|
9.09% |
|
|
|
8.59% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental
Data: |
|
|
|
|
|
|
|
|
|
|
|
Ratio of Expenses to Average
Net Assets(d) |
|
|
0.51% |
|
|
|
0.51% |
|
|
|
|
Ratio of Net Investment Income
(Loss) to Average Net Assets(d) |
|
|
1.00% |
|
|
|
2.50% |
|
|
|
|
Net
Assets, End of Period (000’s) |
|
$ |
69,327 |
|
|
|
$47,081 |
|
|
|
|
Portfolio
Turnover(c) |
|
|
13% |
|
|
|
16% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Commencement
of operations. |
(b) |
Per
share net investment income (loss) has been calculated using the average
daily shares method. |
(c) |
Not
annualized for periods less than one year. |
(d) |
Annualized
for periods less than one year. |
Section 8
| Other Information
This
Prospectus is accompanied by a Statement of Additional Information (SAI), dated
April 30, 2022: The SAI contains more information about the Funds’
operations, investment restrictions, policies and practices. The SAI is
incorporated by reference into this Prospectus, which means that it is legally
part of this Prospectus, even if you don’t request a copy.
Annual
and Semi-annual Reports: Annual and semi-annual reports contain more information
about the Funds’ investments and the market conditions and investment strategies
that significantly affected the Funds’ performance during the most recent fiscal
period.
How
to Obtain Information: You may obtain a free copy of the SAI or annual and
semi-annual reports, and ask questions about the Funds or your accounts, online
at etf.timothyplan.com, by contacting the Timothy Plan at the following address
or telephone number, or by contacting your financial intermediary.
|
|
|
|
|
By telephone: |
|
By mail: |
|
|
Call Timothy Plan at
1‑800‑846‑7526 |
|
Timothy
Plan
1055
Maitland Center Commons
Maitland
FL 32751 |
You
also can get information about the Fund (including the SAI and other reports)
from the Securities and Exchange Commission (SEC). The SEC charges a duplicating
fee to provide copies of this information.
|
|
|
|
|
|
|
|
In person: |
|
By mail: |
|
On the Internet: |
|
|
|
SEC
Public Reference Room
Washington,
D.C.
Call
202‑551‑8090 for location and hours.
|
|
SEC
Public Reference Section
Washington,
D.C. 20549-1520 |
|
EDGAR database at sec.gov or by email
request at [email protected] |
Investment
Company Act File Number 811‑0822