Table of Contents

alpsfunds.com

Investment Objective

The ALPS Clean Energy ETF (the “Fund” or “ACES”) seeks investment results that correspond (before fees and expenses) generally to the performance of its underlying index, the CIBC Atlas Clean Energy Total Return Index (ticker symbol NACEX) (the “Underlying Index”). The Underlying Index utilizes a rules-based methodology developed by CIBC National Trust Company, which is designed to provide exposure to a diverse set of U.S. and Canadian companies involved in the clean energy sector including renewables and clean technology.

The Fund employs a “passive management” – or indexing – investment approach designed to track the performance of the Underlying Index. The Underlying Index utilizes a rules-based methodology developed by CIBC National Trust Company (the “Index Provider”), which is designed to provide exposure to a diverse set of U.S. and Canadian companies involved in the clean energy sector including renewables and clean technology. The clean energy sector is comprised of companies that provide the products and services that enable the evolution of a more sustainable energy sector. Clean energy business segments include, but are not limited to, the following activities: (i) renewable energy sources, including solar power, wind power, hydroelectricity, geothermal energy, biomass, biofuels, and tidal/wave energy, (ii) clean technologies, including electric vehicles, energy storage, lithium, fuel cell, smart grid, and energy efficiency technologies and (iii) other emerging clean energy activities and technologies. The Underlying Index is compiled by the Index Provider and may be comprised of U.S. or Canadian companies. In order to be eligible for inclusion in the Underlying Index, a company’s stock must be traded on one or more major U.S. or Canadian securities exchanges, be based in the U.S. or in Canada, have a minimum float-adjusted market capitalization and minimum average daily trading value thresholds established by the index rulebook of at least $300 million, and have a minimum median average daily trading liquidity of greater than $3 million over the last 60 trading days prior to the selection date, and the company must derive a majority of its value from clean energy business segments (as defined above). Such eligible companies shall be defined as the “Index Universe.” All equity securities meeting the above criteria are selected for inclusion in the Index Universe. The Underlying Index is reconstituted and rebalanced quarterly on the third Friday in March, June, September and December.

Performance Overview

The ALPS Clean Energy ETF for the twelve-month period ended November 30, 2021, generated a total return of 6.16%. Performance was in-line with the Fund’s Underlying Index, net of fees, which returned 6.57%. The Fund underperformed the S&P 1000 Total Return Index, which returned 27.91% for the same period.

The S&P 500 Total Return Index returned 27.92% for the trailing twelve-month (TTM) period ended November 30, 2021, finishing near its all-time high. Unmoved by persistent talks of inflation and policy changes, markets surged without significant drawdowns until September. October proved resilient, as the drawdown was met by a swift bounce back to all-time-highs for most of the averages. Main macroeconomic talking points throughout 2021 centered on inflation and the question of how transitory price increases would turn out to be. Inflation fears continued to be justified with the Consumer Price Index (CPI) surging 6.2% in October, along with core inflation readings increasing 4.6% for the same month; both indicators notching their largest increases since December 1990, and August 1991, respectively. Federal Reserve Chairman Powell was quick to reassure markets of the non-persistent inflation narrative throughout 2021 and announced a taper and reduction of balance sheet purchases starting in November of ‘21. Although the Fed plans to complete tapering before any rate hikes in 2022, projections of the magnitude for said rate increases vary, as global supply chain woes and the newly discovered COVID-19 Omicron variant do not ensure a future without added policy support. Despite a murky economic landscape for 2021 and heading into the New Year, global GDP surpassed pre-pandemic levels in 2021, aided by policy support and strong consumer spending. Record profit margins for U.S. corporations led the way for record valuations through most of the year, but were matched by an earnings season in Q3 where many companies cut forward-looking expectations amid a slowing global growth outlook.

2021 saw an acceleration of clean energy adoption and mandates driven by legislation. The Biden Administration has set forth initiatives to decarbonize the electric sector by 2035, setting the precedent for further infrastructure spending and tax credits aimed at achieving the lofty goals. The $1 trillion Bipartisan Infrastructure Bill was signed into law in November, with specific mandates targeting the funds towards initiatives that will reduce U.S. emissions by 50-52% from 2005 levels in 2030, and to create a 100% carbon pollution-free power sector by 2035. Electric vehicles stole the spotlight throughout the year with Tesla outperforming competitors and IPOs from the likes of Rivian and Lucid Motors. It is likely that North America will see more policy support targeted at clean energy infrastructure in the near future, as projections call for immediate increases in policy action in order to meet a net-zero global fleet by 2050.

The best performing stocks in the Fund for the period were Ameresco Inc., Class A (AMRC), which increased 72.91%, Enviva Partners LP (EVA), which saw a gain of 63.43%, and Tesla, Inc. (TSLA), which rose 62.22%. The largest detractors were Workhorse Group, Inc. (WKHS), which decreased 70.48%, XEBEC Adsorption, Inc. (XBC CN), which fell 68.48%, and TPI Composites, Inc. (TPIC), which lost 66.22%.

ACES Underlying Index has a differentiated approach to investing in the clean energy sector. First, by narrowing the list of constituents to companies whose primary operations are focused on clean energy, the Fund offers more pure-play exposure to the clean energy sector. Second, constituents are diversified across the sector and offer exposure to the full opportunity set of the transition from fossil fuels to renewable energy. Lastly, focusing on U.S. and Canadian-based companies helps to further minimize the risk of investing in a global industry by reducing risks related to foreign holdings, including currency exchange rates, financial disclosures, and regulatory and policy changes. 

Fund Performance (as of November 30, 2021)

Total Expense Ratio (per the current prospectus) is 0.55%.

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

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

CIBC Atlas Clean Energy Total Return Index is an adjusted market cap weighted index designed to provide exposure to a diverse set of U.S. or Canadian based companies involved in the clean energy sector including renewables and clean technology. The clean energy sector is comprised of companies that provide the products and services which enable the evolution of a more sustainable energy sector. Clean energy business segments include but are not limited to: solar, wind, hydro, geothermal, electric vehicles, LED, biomass, smart grid, energy efficiency and storage. Total return assumes reinvestment of any dividends and distributions realized during a given time period.

The S&P 1000^® Total Return Index combines the S&P MidCap 400^® and the S&P SmallCap 600^® to form an investable benchmark for the mid- to small-cap segment of the U.S. equity market. Total return assumes reinvestment of any dividends and distributions realized during a given time period.

One cannot invest directly in an index. Index performance does not reflect fund performance.

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

The ALPS Clean Energy ETF is not suitable for all investors. Investments in the Fund are subject to investment risks, including possible loss of the principal amount invested.

ALPS Portfolio Solutions Distributor, Inc., a FINRA member, is the Distributor for the ALPS Clean Energy ETF.  

Growth of $10,000 (as of November 30, 2021)

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

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

Investment Objective

ALPS Disruptive Technologies ETF (the “Fund” or “DTEC”) seeks investment results that correspond (before fees and expenses) generally to the performance of the Indxx Disruptive Technologies Net Total Return Index (ticker symbol IDTEC) (the “Underlying Index”). The Fund will invest at least 80% of its net assets in securities that comprise the Underlying Index.

The Fund employs a “passive management” – or indexing – investment approach designed to track the performance of the Underlying Index. The Underlying Index utilizes a rules-based methodology developed by Indxx, LLC (the “Index Provider”), which is designed to identify the companies using disruptive technologies in each of ten thematic areas: Healthcare Innovation, Internet of Things, Clean Energy and Smart Grid, Cloud Computing, Data and Analytics, FinTech, Robotics and Artificial Intelligence, Cybersecurity, 3D Printing, and Mobile Payments (each a “Theme” and together, the “Themes”). Companies using disruptive technologies are those that are entering traditional markets with new digital forms of production and distribution, seek to disrupt an existing market and value network, displace established market-leading firms, products and alliances and increasingly gain market share. The Underlying Index is compiled by the Index Provider and may be comprised of U.S. and non-U.S. companies, including foreign and emerging markets companies. In order to be eligible for inclusion in the Underlying Index’s Index Universe, a company’s stock must be traded on one or more major global securities exchanges, have a minimum market capitalization of at least $500 million, and have a six month minimum average daily trading volume of $2 million, and the company must derive a minimum of 50% of its revenue from a single Theme. All equity securities meeting the above criteria are selected for inclusion in the Index Universe. From the Index Universe, the Underlying Index methodology selects ten stocks in each Theme according to proprietary quantitative and qualitative factors. The eligible stocks that are selected for inclusion in the Underlying Index’s portfolio are equally weighted. The Underlying Index is reconstituted annually on the third Friday of September and rebalanced quarterly.

Performance Overview

The ALPS Disruptive Technologies ETF for the twelve-month period ended November 30, 2021, generated a total return of 12.60%. Performance was in-line with the Fund’s Underlying Index, net of fees, which returned 12.79%. The Fund underperformed the Morningstar Global Markets Index, which returned 18.76% for the same period.

The S&P 500 Total Return Index returned 27.92% for the trailing twelve-month (TTM) period ended November 30, 2021, finishing near its all-time high. Unmoved by persistent talks of inflation and policy changes, markets surged without significant drawdowns until September. October proved resilient, as the drawdown was met by a swift bounce back to all-time-highs for most of the averages. Main macroeconomic talking points throughout 2021 centered on inflation and the question surrounding how transitory price increases would turn out to be. Inflation fears continued to be justified with the Consumer Price Index (CPI) surging 6.2% in October, along with core inflation readings increasing 4.6% for the same month; both indicators notching their largest increases since December 1990, and August 1991, respectively. Federal Reserve Chairman Powell was quick to reassure markets of the non-persistent inflation narrative throughout 2021 and announced a taper and reduction of balance sheet purchases starting in November of ‘21. Although the Fed plans to complete tapering before any rate hikes in 2022, projections of the magnitude for rate increases vary, as global supply chain woes and the newly discovered Omicron variant do not ensure a future without added policy support. Despite a murky outlook for 2021 and heading into the New Year, global GDP surpassed pre-pandemic levels in 2021, aided by policy support and strong consumer spending. Record profit margins for U.S. corporations led the way for record valuations through most of the year, but was matched by an earnings season in Q3 where many companies cut forward-looking expectations amid a slowing global growth outlook.

DTEC outperformed the Morningstar Global Markets Index, which returned 18.76% for the trailing twelve-month period ended November 30, 2021. DTEC holds roughly 65% U.S. equities and 35% foreign. The U.S. Dollar strengthened relative to the Euro, however ex-U.S. markets did not see the historical drop in performance from the move. Similar to the U.S., Eurozone markets saw a strong earnings season and ongoing economic recovery from the pandemic. Value outperformed growth equities internationally for the majority of the year, with the gap in performance closing in recent months. Future growth prospects remain optimistic, predicated on lessening travel restrictions and temporary higher inflation. DTEC’s higher weight to the Information Technology sector has helped buoy its performance over broad-based indices.

Disruptive technologies pave the way for a brighter future through innovation and fundamentally alter the way industries operate. Furthermore, the potential to capture returns within different disruptive technology themes is compelling, and offers potential to supercharge a portfolio. DTEC employs an equal weighted strategy to its disruptive themes, resulting in 10 sub-themes (3D Printing, Clean Energy & Smart Grid, Cloud Computing, Cybersecurity, Data & Analytics, FinTech, Healthcare Innovation, Internet of Things, Mobile Payments, Robotics & AI), each with a 10% holding. The Fund picks the top 10 names from its universe that most represent the specific theme. 6 of the 10 DTEC themes were positive this year, with the Data & Analytics theme being the largest performance contributor at 2.83%. Cybersecurity was the second largest positive contributor, adding 2.65% to the portfolio return. Within that theme, Fortinet, Inc. (FTNT), a security network provider, had the largest individual equity performance, returning a whopping 123.6%, and contributing 0.91% to the Fund performance. The worst performing thematic category was Mobile Payments, detracting -1.38% from portfolio performance. StoneCo, Ltd. (STNE), a Brazilian payments firm, was the worst performer in the theme, losing -81.31% and detracting -1.24%.

Looking forward, the Fund’s strategy of selecting the top disruptive themes in the market today will provide exposure to areas of the market the Adviser believes will be high-growth relative to the Morningstar Global Markets Index. 

Fund Performance (as of November 30, 2021)

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

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

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

Indxx Disruptive Technologies Net Total Return Index (Ticker: IDTEC) is based around companies that enter traditional markets with new digital forms of production and distribution, are likely to disrupt an existing market and value network, displace established market leading firms, products and alliances and increasingly gain market share. Total Return assumes reinvestment of any dividends and distributions realized during a given time period. Net Total Return (NTR) is obtained by reinvesting the net dividend, which is equal to the ordinary gross dividend minus the amount of withholding tax.

The Morningstar^® Global Markets Net Return Index, measures the performance of the stocks located in the developed and emerging countries across the world. Stocks in the index are weighted by their float capital, which removes corporate cross ownership, government holdings and other locked-in shares.

One cannot invest directly in an index. Index performance does not reflect fund performance.

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

The ALPS Disruptive Technologies ETF is not suitable for all investors. Investments in the Fund are subject to investment risks, including possible loss of the principal amount invested.

ALPS Portfolio Solutions Distributor, Inc., a FINRA member, is the Distributor for the ALPS Disruptive Technologies ETF.  

Growth of $10,000 (as of November 30, 2021)

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

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

Investment Objective

ALPS Global Travel Beneficiaries ETF (the "Fund" or "JRNY") seeks investment results that replicate as closely as possible, before fees and expenses, the performance of the S-Network Global Travel Index (ticker symbol TRAVEL) (the “Underlying Index”).

The Underlying Index uses a rules-based methodology developed by S-Network Global Indexes Inc. (the "Index Provider"), which is designed to identify exchange-traded stocks of companies that are materially engaged in the global travel industry, including four segments: Airlines & Airport Services; Hotels, Casinos, Cruise Lines; Booking & Rental Agencies; and Ancillary Beneficiaries. The Underlying Index is compiled by the Index Provider and may be comprised of U.S. and non-U.S. companies, including foreign and emerging markets companies. In order to be eligible for inclusion in the Underlying Index's Index Universe, a company's stock must be traded on one or more major global securities exchanges and is principally engaged in or derives significant revenue from on of the segments. In addition, a company's stock must have a minimum market capitalization of at least $100 million, a three-month minimum average daily trading volume of $1 million, and a minimum free float factor of 18%. All equity securities meeting the above criteria are selected for inclusion in the Index Universe. From the Index Universe, the Underlying Index methodology selects and weights twenty stocks in each segment, subject to a minimum of one constituent per geographic region (U.S. & Canada, Europe, Pacific (ex-Canada), and Emerging) and a 65% maximum weight per geographic region. The Underlying Index is rebalanced and reconstituted quarterly on the third Friday of the last month in each calendar quarter.

Performance Overview

The ALPS Global Travel Beneficiaries ETF since inception on September 8th, 2021 through the period ended November 30, 2021, generated a total return of -5.34%, in-line with the Fund’s Underlying Index, net of fees, which returned -5.28%. The Fund underperformed the Morningstar Global Markets Index, which returned -2.29% for the same period.

The S&P 500 Total Return Index returned 27.92% for the trailing twelve-month (TTM) period ended November 30, 2021, finishing near its all-time high. Unmoved by persistent talks of inflation and policy changes, markets surged without significant drawdowns until September. October proved resilient, as the drawdown was met by a swift bounce back to all-time-highs for most of the averages. Main macroeconomic talking points throughout 2021 centered on inflation and the question surrounding how transitory price increases would turn out to be. Inflation fears continued to be justified with the Consumer Price Index (CPI) surging 6.2% in October, along with core inflation readings increasing 4.6% for the same month; both indicators notching their largest increases since December 1990, and August 1991, respectively. Federal Reserve Chairman Powell was quick to reassure markets of the non-persistent inflation narrative throughout 2021 and announced a taper and reduction of balance sheet purchases starting in November of ‘21. Although the Fed plans to complete tapering before any rate hikes in 2022, projections of the magnitude for rate increases vary, as global supply chain woes and the newly discovered Omicron variant do not ensure a future without added policy support. Despite a murky outlook for 2021 and heading into the New Year, global GDP surpassed pre-pandemic levels in 2021, aided by policy support and strong consumer spending. Record profit margins for U.S. corporations led the way for record valuations through most of the year, but was matched by an earnings season in Q3 where many companies cut forward-looking expectations amid a slowing global growth outlook.

In terms of global travel, travel companies and beneficiaries are poised to benefit from the continued global re-opening. As of Thanksgiving, airline bookings were up 78% year-over-year and slightly higher than even 2019 numbers. Additionally, both searches and prices for car rentals have jumped significantly from 2019 (up 230%), and 2020 (up 243%). Travel beneficiaries have so far been able to pass the majority of increased costs related to inflation and supply chain disruptions on to consumers, retaining current profit margins. Unfortunately, recent news and spread of the COVID Omicron variant heading into 2022 has weighed global travel beneficiaries, who are sensitive to infection rates. Limited research suggests that Omicron may be more transmissible but less deadly than other variants, giving hope to a continued re-opening trade and minimal travel restrictions over the foreseeable future.

The best-performing stocks in the Fund since inception this year were AVIS Budget Group, Inc. (CAR), which increased 204.12%, and CIE Financiere Richemont SA (CFR SW), which saw a gain of 41.20%. The top-performing JRNY segment was Ancillary Beneficiaries, returning -1.49%. The largest individual detractors were HyreCar, Inc. (HYRE), which decreased 53.47%, Liberty TripAdvisor Holdings, Inc. (LTRPA), which fell 40.50%, and Penn National Gaming, Inc. (PENN), which lost 37.97%.

Looking forward, the Fund’s strategy of identifying companies that are materially engaged in global travel industries including airlines, hotels, casinos and cruise lines, and companies that support and stand to benefit from those industries, is designed to provide a holistic and more diversified exposure to the secular tailwinds in global travel. 

Fund Performance (as of November 30, 2021)

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

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

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

The Fund is new with limited operating history.

The S-Network Global Travel Net Total Return Index (Ticker: TRAVEL) is an Index of stocks listed on global recognized stock exchanges that are materially engaged in segments of the global travel industry, including Airlines & Airport Services; Hotels, Casinos, and Cruise Lines; Booking & Rental Agencies; and ancillary beneficiaries of global travel. Total Return assumes reinvestment of any dividends and distributions realized during a given time period. Net Total Return (NTR) is obtained by reinvesting the net dividend, which is equal to the ordinary gross dividend minus the amount of withholding tax.

The Morningstar^® Global Markets Net Return Index, measures the performance of the stocks located in the developed and emerging countries across the world. Stocks in the index are weighted by their float capital, which removes corporate cross ownership, government holdings and other locked-in shares.

One cannot invest directly in an index. Index performance does not reflect fund performance.

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

The ALPS Global Travel Beneficiaries ETF is not suitable for all investors. Investments in the Fund are subject to investment risks, including possible loss of the principal amount invested.

ALPS Portfolio Solutions Distributor, Inc., a FINRA member, is the Distributor for the ALPS Global Travel Beneficiaries ETF.  

Growth of $10,000 (as of November 30, 2021)

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

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

Investment Objective

ALPS Medical Breakthroughs ETF (the “Fund” or “SBIO”) seeks investment results that correspond (before fees and expenses) generally to the performance of the S-Network^® Medical Breakthroughs Total Return Index (the “Underlying Index”). The Fund will normally invest at least 80% of its net assets in securities that comprise the Underlying Index (or depository receipts based on such securities).

The Fund employs a “passive management” – or indexing – investment approach designed to track the performance of the Underlying Index. The Underlying Index is comprised of small- and mid-cap stocks of biotechnology companies that have one or more drugs in either Phase II or Phase III of the U.S. Food and Drug Administration ("FDA") clinical trials. In a Phase II trial, the drug is administered to a group of 100-300 people to see if it is effective and to evaluate its safety. In a Phase III trial, the drug is given to a larger group, between 500-3,000 people, to confirm its effectiveness, monitor side effects, compare it to commonly used treatments and collect information that will allow the drug or treatment to be used safely. Stocks selected for inclusion in the Underlying Index must be listed on a U.S. stock exchange. Underlying Index constituents must have a market capitalization of no less than $200 million and no more than $5 billion. Stocks included in the Underlying Index must also sustain an average daily trading volume in excess of $1 million for the 90-day period preceding an Underlying Index reconstitution. Constituents must be able to sustain the monthly rates at which they use shareholder capital ("cash burn rates") for at least 24 months. The Underlying Index is reconstituted semi-annually on the third Fridays of June and December.

Performance Overview

For the twelve-month period ended November 30, 2021, the Fund generated a total return of -12.37%, in-line with the Fund’s Underlying Index, net of fees, which returned -12.11%. The Fund underperformed the broad market, as represented by the S&P 500®, which returned 27.92% for the period, and also underperformed the NASDAQ Biotechnology Total Return Index’s (XNBI Index) return of 5.90% as the small and mid-cap (SMID) biotech companies have seen a less than stellar year in performance compared to 2020.

The S&P 500^® returned 27.92% for the trailing twelve-month (TTM) period ended November 30, 2021, finishing near its all-time high. Main macroeconomic talking points throughout 2021 centered on inflation and the question surrounding how transitory price increases would turn out to be. Inflation fears continued to be justified with the Consumer Price Index (CPI) surging 6.2% in October, along with core inflation readings increasing 4.6% for the same month; both indicators notching their largest increases since December 1990, and August 1991, respectively. Despite a murky outlook for 2021 and heading into the New Year, global GDP surpassed pre-pandemic levels in 2021, aided by policy support and strong consumer spending. Record profit margins for U.S. corporations led the way for record valuations through most of the year, but was matched by an earnings season in Q3 where many companies cut forward-looking expectations amid a slowing global growth outlook.

Specifically for the biotech industry, regulatory concerns have weighed on the companies in 2021. Congress has made it clear they will aim to reduce drug pricing, with the most recent effort in the $1.7 trillion social spending bill. Although an argument can be made that lower drug prices will ultimately benefit the consumer, these efforts could potentially slow the pace of innovation for many drug companies. Despite headwinds, the biotech industry’s continued pace of acquisitions and positive treatment results paint an exciting future for drug therapies, and continued innovation. Through the halfway mark of 2021, 49 biotech IPOs had been completed, with the final year–end investment and IPO numbers expected to display the industry heating-up in the back half of the year.

The Fund’s volatility during the year was relatively higher than the S&P 500®, but not unusual for the biotech industry as the space typically caries a higher beta relative to the broad market. The best performing stocks in the Fund for the period were Prothena Corp. PLC (PRTA), Kezar Life Sciences, Inc. (KZR), and Kadmon Holdings Inc. (KDMN), which returned 284.00%, 154.31%, and 138.10%, respectively. In contrast, the worst-performing stocks for the period were Forte Biosciences, Inc. (FBRX), Immunovant, Inc. (IMVT), and Frequency Therapeutics, Inc. (FREQ), which declined 93.18%, 84.59%, and 82.23%, respectively.

Due to the high failure rate of companies within the space, the non-traditional metrics used to evaluate biotech companies, and the technical knowledge required to succeed in the space, biotechnology is a difficult industry for stock pickers. This environment makes a passive strategy attractive, as it provides a diversified, rules- based access vehicle for those looking to gain exposure to the biotechnology space, while mitigating single stock risk. The Fund and its Underlying Index focus on innovation, seeking to capture research and development opportunities in the biotechnology industry. Looking forward, the Fund’s strategy of providing exposure to small and mid-cap biotechnology companies that have one or more drugs in either Phase II or Phase III FDA clinical trials can provide potential alpha and pure-play exposure to the biotech space. 

Fund Performance (as of November 30, 2021)

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

Performance data quoted represents past performance. Past performance does not guarantee future results. Total return figures assume reinvestment of dividends and capital gains distributions, if any. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. For most current month-end performance data please visit www.alpsfunds.com or call 1.844.234.5852.

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

NASDAQ Biotechnology Total Return Index (Ticker: NBI) is a modified market capitalization-weighted index designed to measure the performance of all the NASDAQ stocks in the biotechnology sector. Total return assumes reinvestment of any dividends and distributions realized during a given time period.

S-Network Medical Breakthroughs Total Return Index (Ticker: PMBI) is designed to capture research and development opportunities in the biotechnology industry. PMBI consists of small-cap and mid-cap biotechnology stocks listed on U.S. stock exchanges that have one or more drugs in either Phase II or Phase III U.S. FDA clinical trials. Total return assumes reinvestment of any dividends and distributions realized during a given time period.

One cannot invest directly in an index. Index performance does not reflect fund performance.

Companies in the pharmaceuticals and biotechnology industry may be subject to extensive litigation based on product liability and similar claims. Legislation introduced or considered by certain governments on such industries or on the healthcare sector cannot be predicted.

Companies in the pharmaceuticals industry are subject to competitive forces that may make it difficult to raise prices and, in fact, may result in price discounting. The profitability of some companies in the pharmaceuticals industry may be dependent on a relatively limited number of products. In addition, their products can become obsolete due to industry innovation, changes in technologies or other market developments. Many new products in the pharmaceuticals industry are subject to government approvals, regulation and reimbursement rates. The process of obtaining government approvals may be long and costly. Many companies in the pharmaceuticals industry are heavily dependent on patents and intellectual property rights. The loss or impairment of these rights may adversely affect the profitability of these companies.

The development of new drugs generally has a high failure rate, and such failures may negatively impact the stock price of the company developing the failed drug. Biotechnology companies may have persistent losses during a new product’s transition from development to production. In order to fund operations, biotechnology companies may require financing from the capital markets, which may not always be available on satisfactory terms or at all.

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

The ALPS Medical Breakthroughs ETF is not suitable for all investors. Investments in the Fund are subject to investment risks, including possible loss of the principal amount invested.

ALPS Portfolio Solutions Distributor, Inc., a FINRA member, is the Distributor for the ALPS Medical Breakthroughs ETF.

ALPS Portfolio Solutions Distributor, Inc. is not affiliated with S-Network Global Indexes, Inc.  

Growth of $10,000 (as of November 30, 2021)

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

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

Shareholder Expense Example: As a shareholder of a Fund, you incur certain ongoing costs, including management fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other funds. It is based on an investment of $1,000 invested at the beginning of the (six month) period and held through November 30, 2021.

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

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

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

To the Board of Trustees of ALPS ETF Trust and the shareholders of ALPS Clean Energy ETF, ALPS Disruptive Technologies ETF, ALPS Global Travel Beneficiaries ETF, and ALPS Medical Breakthroughs ETF:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of ALPS Clean Energy ETF, ALPS Disruptive Technologies ETF, ALPS Global Travel Beneficiaries ETF, and ALPS Medical Breakthroughs ETF (the "Funds"), four of the funds constituting the ALPS ETF Trust as of November 30, 2021, the related statements of operations, the statements of changes in net assets, and the financial highlights for the periods indicated in the table below, and the related notes.

In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of November 30, 2021, and the results of their operations, the changes in their net assets, and the financial highlights for the periods indicated in the table below, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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

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

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of November 30, 2021, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

DELOITTE & TOUCHE LLP

Denver, Colorado

January 26, 2022

We have served as the auditor of one or more investment companies advised by ALPS Advisors, Inc. since 2007. 

See Notes to Financial Statements.