Semi-Annual Report

August 31, 2023

U.S. DIVERSIFIED REAL ESTATE ETF
Ticker: PPTY

U.S. Diversified Real Estate ETF

TABLE OF CONTENTS

U.S. Diversified Real Estate ETF

Letter to Shareholders
August 31, 2023 (Unaudited)

Dear Shareholders,

On behalf of the entire team, we want to express our appreciation for the confidence you have placed in the U.S. Diversified Real Estate ETF (“PPTY” or the “Fund”). The following information pertains to the fiscal period of March 1, 2023 through August 31, 2023. The Fund seeks to track the total return performance, before fees and expenses, of the USREX - U.S. Diversified Real Estate Index™ (the “Index”). The Index is a passive, rules-based strategy index of U.S. real estate equity that selects companies using proprietary factors that take into account property type, property values, leverage, and location data.

The Fund had positive performance during the period ending on August 31, 2023. The market price for PPTY increased 1.43% and the NAV increased 1.22%, while the MSCI US REIT Index, a broad market index, decreased -0.14% over the same period. The Fund’s Index increased 1.54%. Meanwhile, outstanding shares ended the period at 4,200,000.

For the period, the largest positive contributor to return was Digital Realty Trust, Inc. (DLR US), adding 1.02% to the return of the Fund, gaining 29.31% with an average weighting of 3.62%. The second largest contributor to return was Equinix, Inc. (EQIX US), adding 0.66% to the return of the Fund, gaining 15.16% with an average weighting of 4.31%. The third largest contributor to return was American Homes 4 Rent - Class A (AMH US), adding 0.52% to the return of the Fund, gaining 17.77% with an average weighting of 2.87%.

For the period, the largest negative contributor to return was Alexandria Real Estate Equities, Inc. (ARE US), detracting -0.57% from the return of the Fund, declining -20.71% with an average weighting of 1.99%. The second largest contributor to return was W.P. Carey, Inc. (WPC US), detracting -0.36% from the return of the Fund, and declining -17.45% with an average weighting of 1.81%. The third largest negative contributor to return was Orion Office REIT, Inc. (ONL US), detracting -0.25% from the return of the Fund, and declining -29.78% with an average weight of 0.71%.

For the period, the best performing security in the Fund was Digital Realty Trust, Inc. (DLR US), gaining 29.31% and contributing 1.02% to the return of the Fund. The second-best performing security for the period was Tanger Factory Outlet Centers, Inc. (SKT US), gaining 26.04% and contributing 0.02% to the return of the Fund. The third-best performing security was Urstadt Biddle Properties, Inc. (UBA US)¹, gaining 25.18% for the period and contributing 0.16% to the return of the Fund.

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U.S. Diversified Real Estate ETF

Letter to Shareholders
August 31, 2023 (Unaudited) (Continued)

For the period, the worst performing security in the Fund was Orion Office REIT Inc (ONL US), declining -29.78% and reducing the return of the Fund by -0.25%. The second-worst performing security in the Fund was Peakstone Realty Trust (PKST US), declining -22.45% and reducing the return of the Fund by -0.03%. The third-worst performing security in the Fund was Alexandria Real Estate Equities, Inc. (ARE US), declining -20.71% and reducing the return of the Fund by -0.57%.

Sincerely,

Vince Birley
Chief Executive Officer, Vident Asset Management

Past performance is not a guarantee of future results. Opinions expressed are those of the Fund manager and are subject to change, are not guaranteed and should not be considered investment advice. Fund holdings are subject to change and are not recommendations to buy or sell any security. For more complete information regarding performance and holdings, please refer to the schedules of investments on pages 5-9.

Investments involve risk. Principal loss is possible. The Fund has the same risks as the underlying securities traded on the exchange throughout the day at market price. The Fund is a diversified management investment company. The Fund’s investments will be concentrated in an industry or group of industries to the extent the Index is so concentrated, and the Index is expected to be concentrated in real estate-related industries. The composition of the Index is heavily dependent on a proprietary quantitative model as well as information and data supplied by third parties. The Fund is expected to invest substantially all of its assets in real estate-related companies. Investments in real estate companies involve unique risks. Real estate companies, including REITs, may have limited financial resources, may trade less frequently and in limited volume, and may be more volatile than other securities. The risks of investing in real estate companies include certain risks associated with the direct ownership of real estate and the real estate industry in general. Securities in the real estate sector are subject to the risk that the value of their underlying real estate may go down. As with all ETFs, shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of shares will approximate the Fund’s NAV, there may be times when the market price of shares is more than the NAV intra-day (premium) or less than the NAV intra-day (discount) due to supply and demand of shares or during periods of market volatility. The equity securities of smaller companies have historically been subject to greater investment risk than securities of larger companies.

The USREX – U.S. Diversified Real Estate Index™ is constructed from a universe of U.S.-listed equity securities with a market capitalization of at least $750 million and meeting certain liquidity thresholds (the “Equity Universe”). For companies currently in

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U.S. Diversified Real Estate ETF

Letter to Shareholders
August 31, 2023 (Unaudited) (Continued)

the index, the minimum market capitalization is $375 million. Companies in the Equity Universe are then screened to keep only those that derive at least 85% of their income from ownership or management of real property. Companies that meet this criterion are then screened to remove companies that are externally managed or that have a low percentage of their shares directly or indirectly available to the public. The companies remaining after the above screens will constitute the Index.

The Index is designed to ensure diversification by property type and by location, while favoring companies with prudent leverage (i.e., the debt-to-enterprise value ratio of real estate investments), all subject to a maximum individual security weighting of 4% at the time of each reconstitution of the Index. The Index is expected to be primarily composed of companies that qualify as real estate investment trusts (“REITs”), but may also include real estate companies that do not qualify as REITs.

The MSCI US REIT Index is a free float-adjusted market capitalization weighted index that is comprised of equity Real Estate Investment Trusts (REITs). The index is based on the MSCI USA Investable Market Index (IMI), its parent index, which captures the large, mid and small cap segments of the USA market. With 122 constituents, it represents about 99% of the U.S. REIT universe and securities are classified under the Equity REITs Industry (under the Real Estate Sector) according to the Global Industry Classification Standard (GICS^®), have core real estate exposure (i.e., only selected Specialized REITs are eligible) and carry REIT tax status.

It is not possible to invest directly in an index.

Must be preceded or accompanied by a Prospectus.

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U.S. Diversified Real Estate ETF

Portfolio Allocation
As of August 31, 2023 (Unaudited)

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U.S. Diversified Real Estate ETF

Schedule of Investments
August 31, 2023 (Unaudited)

The accompanying notes are an integral part of these financial statements.

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U.S. Diversified Real Estate ETF

Schedule of Investments
August 31, 2023 (Unaudited) (Continued)

The accompanying notes are an integral part of these financial statements.

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U.S. Diversified Real Estate ETF

Schedule of Investments
August 31, 2023 (Unaudited) (Continued)

The accompanying notes are an integral part of these financial statements.

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U.S. Diversified Real Estate ETF

Schedule of Investments
August 31, 2023 (Unaudited) (Continued)

The accompanying notes are an integral part of these financial statements.

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U.S. Diversified Real Estate ETF

Schedule of Investments
August 31, 2023 (Unaudited) (Continued)

The Global Industry Classification Standard (GICS^®) was developed by and/or is the exclusive property of MSCI, Inc. (“MSCI”) and Standard & Poor’s Financial Services LLC (“S&P”). GICS^® is a service mark of MSCI and S&P and has been licensed for use by the Fund’s Administrator, U.S. Bancorp Fund Services, LLC.

The accompanying notes are an integral part of these financial statements.

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U.S. Diversified Real Estate ETF

Statement of Assets and Liabilities
August 31, 2023 (Unaudited)

The accompanying notes are an integral part of these financial statements.

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U.S. Diversified Real Estate ETF

Statement of Operations
For the Six-Months Ended August 31, 2023 (Unaudited)

The accompanying notes are an integral part of these financial statements.

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U.S. Diversified Real Estate ETF

Statement of Changes in Net Assets

The accompanying notes are an integral part of these financial statements.

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U.S. Diversified Real Estate ETF

Financial Highlights

For a capital share outstanding throughout the period/year

The accompanying notes are an integral part of these financial statements.

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U.S. Diversified Real Estate ETF

Financial Highlights

For a capital share outstanding throughout the period/year

The accompanying notes are an integral part of these financial statements.

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U.S. Diversified Real Estate ETF

Notes to Financial Statements
August 31, 2023 (Unaudited)

NOTE 1 – ORGANIZATION

U.S. Diversified Real Estate ETF (the “Fund”) is a diversified series of ETF Series Solutions (“ESS”) or (the “Trust”), an open-end management investment company consisting of multiple investment series, organized as a Delaware statutory trust on February 9, 2012. The Trust is registered with the U.S. Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company and the offering of the Fund’s shares is registered under the Securities Act of 1933, as amended (the “Securities Act”). The investment objective of the Fund is to track the performance, before fees and expenses, of the USREX – U.S. Diversified Real Estate Index™ (the “Index”). The Fund commenced operations on March 26, 2018.

The end of the reporting period for the Fund is August 31, 2023, and the period covered by these Notes to Financial Statements is the period from March 1, 2023 to August 31, 2023 (the “current fiscal period”).

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 946 Financial Services – Investment Companies.

The following is a summary of significant accounting policies consistently followed by the Fund. These policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

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U.S. Diversified Real Estate ETF

NOTES TO FINANCIAL STATEMENTS
August 31, 2023 (Unaudited) (Continued)

Investments in mutual funds, including money market funds, are valued at their net asset value (“NAV”) per share.

Deposit accounts are valued at acquisition cost, which approximates fair value.

Securities for which quotations are not readily available are valued at their respective fair values in accordance with pricing procedures adopted by the Fund’s Board of Trustees (the “Board”). When a security is “fair valued,” consideration is given to the facts and circumstances relevant to the particular situation, including a review of various factors set forth in the pricing procedures adopted by the Board. The use of fair value pricing by the Fund may cause the NAV of its shares to differ significantly from the NAV that would be calculated without regard to such considerations.

As described above, the Fund utilizes various methods to measure the fair value of its investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuations methods. The three levels of inputs are:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.

Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

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U.S. Diversified Real Estate ETF

NOTES TO FINANCIAL STATEMENTS
August 31, 2023 (Unaudited) (Continued)

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The following is a summary of the inputs used to value the Fund’s investments as of the end of the current fiscal period:

During the current fiscal period, the Fund did not recognize any transfers into or out of Level 3.

The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Fund’s uncertain tax positions and conclude that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months. Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits on uncertain tax positions as income tax expenses in the Statement of Operations. During the current fiscal period, the Fund did not incur any interest or penalties.

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U.S. Diversified Real Estate ETF

NOTES TO FINANCIAL STATEMENTS
August 31, 2023 (Unaudited) (Continued)

Dividend income is recorded on the ex-dividend date. Non-cash dividends included in dividend income or separately disclosed, if any, are recorded at fair value of the security received. Interest income is recorded on an accrual basis.

Distributions received from the Fund’s investments in real estate investment trusts (“REIT”) may be characterized as ordinary income, net capital gain, or a return of capital. The proper characterization of REIT distributions is generally not known until after the end of each calendar year. As such, the Fund must use estimates in reporting the character of its income and distributions received during the current calendar year for financial statement purposes. The actual character of distributions to a Fund’s shareholders will be reflected on the Form 1099 received by shareholders after the end of the calendar year. Due to the nature of REIT investments, a portion of the distributions received by a Fund’s shareholders may represent a return of capital.

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U.S. Diversified Real Estate ETF

NOTES TO FINANCIAL STATEMENTS
August 31, 2023 (Unaudited) (Continued)

During the fiscal year ended February 28, 2023, the Fund realized $1,849,226 of net capital gains resulting from in-kind redemptions, in which shareholders exchanged Fund shares for securities held by the Fund rather than for cash. Because such gains are not taxable to the Fund, and are not distributed to shareholders, they have been reclassified from distributable earnings (accumulated deficit) to paid-in capital.

NOTE 3 – COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS

Pursuant to a membership interest purchase agreement signed on March 24, 2023, Vident Capital Holdings, LLC, a subsidiary of MM VAM, LLC, acquired Vident Advisory, LLC d/b/a Vident Asset Management (“Vident”) (the “Transaction”). Prior to the close of the Transaction, Vident Investment Advisory, LLC (“VIA”) contributed substantially all of its assets and certain liabilities to Vident. MM VAM, LLC is an entity controlled by Casey Crawford. The Transaction closed on July 14, 2023. As of the closing date of the Transaction, Mr. Crawford effectively controls VA. Upon the close of the Transaction, pursuant to the 1940 Act, the Advisory and Sub-Advisory Agreement among VIA, the Trust and the Adviser automatically terminated.

At a meeting of the Board, held on April 20, 2023, the Board approved, subject to shareholder approval, the “new advisory agreement” among the Trust, and Vident that is identical in all material respects to the previous Advisory Agreement except for the effective and termination dates. Under the New Advisory Agreement, not only will Vident continue to have overall responsibility for the general management and administration of the Funds, but it will also assume responsibilities that were

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U.S. Diversified Real Estate ETF

NOTES TO FINANCIAL STATEMENTS
August 31, 2023 (Unaudited) (Continued)

previously assumed by VIA (e.g., day-to-day portfolio management services such as buying and selling of securities for each Fund). At a meeting held on June 9, 2023, an affirmative vote of the holders of a majority of the outstanding shares of the Fund, as defined in the 1940 Act, approved of the New Advisory Agreement.

Vident (the “Adviser”) serves as the investment adviser and index provider to the Fund. Pursuant to an Investment Advisory Agreement (“Advisory Agreement”) between the Trust, on behalf of the Fund, and the Adviser, the Adviser provides investment advice to the Fund and oversees the day-to-day operations of the Fund, subject to the direction and control of the Board and the officers of the Trust. Under the Advisory Agreement, the Adviser has agreed to pay all expenses incurred by the Fund except for the fee paid to the Adviser pursuant to this Agreement, interest charges on any borrowings, dividends and other expenses on securities sold short, taxes, brokerage commissions and other expenses incurred in placing orders for the purchase and sale of securities and other investment instruments, acquired fund fees and expenses, accrued deferred tax liability, extraordinary expenses, and distribution fees and expenses paid by the Trust under any distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act (collectively, “Excluded Expenses”). For services provided to the Fund, the Fund paid the Adviser 0.53% at an annual rate based on the Fund’s average daily net assets. Effective February 1, 2020, the Adviser contractually waived 0.04% of its adviser fee from each of the Funds until June 30, 2023. Fees waived under this waiver are not subject to recoupment by the Adviser.

U.S. Bancorp Fund Services, LLC (“Fund Services” or “Administrator”), doing business as U.S. Bank Global Fund Services, acts as the Fund’s Administrator and, in that capacity, performs various administrative and accounting services for the Fund. The Administrator prepares various federal and state regulatory filings, reports and returns for the Fund, including regulatory compliance monitoring and financial reporting; prepares reports and materials to be supplied to the Board; and monitors the activities of the Fund’s Custodian, transfer agent and fund accountant. Fund Services also serves as the transfer agent and fund accountant to the Fund. U.S. Bank N.A. (the “Custodian”), an affiliate of Fund Services, serves as the Fund’s Custodian.

The Custodian acts as securities lending agent (the “Securities Lending Agent”) for the Fund.

All officers of the Trust are affiliated with the Administrator and Custodian.

NOTE 4 – SECURITIES LENDING

The Fund may lend up to 33⅓% of the value of the securities in its portfolio to brokers, dealers and financial institutions (but not individuals) under terms of participation in a securities lending programs administered by the Custodian, who also serves as the Securities Lending Agent. The securities lending agreement requires that

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U.S. Diversified Real Estate ETF

NOTES TO FINANCIAL STATEMENTS
August 31, 2023 (Unaudited) (Continued)

loans are collateralized at all times in an amount equal to at least 102% of the value of any domestic loaned securities at the time of the loan, plus accrued interest. The use of loans of foreign securities, which are denominated and payable in U.S. dollars, shall be collateralized in an amount equal to 105% of the value of any loaned securities at the time of the loan plus accrued interest. The Fund receives compensation in the form of fees and earns interest on the cash collateral. The amount of fees depends on a number of factors including the type of security and length of the loan. The Fund continues to receive interest payments or dividends on the securities loaned during the borrowing period. Gain or loss in the value of securities loaned that may occur during the term of the loan will be for the account of the Fund. The Fund has the right under the terms of the securities lending agreement to recall the securities from the borrower on demand.

The securities lending agreement provides that, in the event of a borrower’s material default, the Securities Lending Agent shall take all actions the Securities Lending Agent deems appropriate to liquidate the collateral, purchase replacement securities at the Securities Lending Agent’s expense, or pay the Fund an amount equal to the market value of the loaned securities, subject to certain limitations which are set forth in detail in the securities lending agreement between the Fund and the Securities Lending Agent.

As of August 31, 2023, the Funds did not have any securities out on loan. During the current fiscal period, the Funds had loaned securities that were collateralized by cash equivalents. The cash collateral was invested by the Securities Lending Agents in accordance with approved investment guidelines. Those guidelines require the cash collateral to be invested in readily marketable, high quality, short-term obligations; however, such investments are subject to risk of payment delays or default on the part of the issuer or counterparty or otherwise may not generate sufficient interest to support the costs associated with securities lending. The Funds could also experience delays in recovering their securities and possible loss of income or value if the borrower fails to return the borrowed securities, although the Funds are indemnified from this risk by contract with the Securities Lending Agents.

The interest income earned by the Fund on investments of cash collateral received from borrowers for the securities loaned to them (“Securities Lending Income”) is reflected in the Fund’s Statement of Operations. Net fees and interest income earned on collateral investments and recognized by the Fund during the current fiscal period was $3,266.

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U.S. Diversified Real Estate ETF

NOTES TO FINANCIAL STATEMENTS
August 31, 2023 (Unaudited) (Continued)

NOTE 5 – PURCHASES AND SALES OF SECURITIES

During the current fiscal period, purchases and sales of securities by the Fund, excluding short-term securities and in-kind transactions, were as follows:

During the current fiscal period, in-kind transactions associated with creations and redemptions were as follows:

There were no purchases or sales of U.S. Government securities in the Fund during the period.

NOTE 6 – INCOME TAX INFORMATION

The amount and character of tax basis distributions and composition of net assets, including distributable earnings (accumulated deficit) are finalized at fiscal year-end; accordingly, tax basis balances have not been determined for the current fiscal period. The components of distributable earnings (accumulated deficit) and cost basis of investments for federal income tax purposes as of February 28, 2023 in the Fund, were as follows:

The difference between book and tax-basis cost is attributable to wash sales.

A regulated investment company may elect for any taxable year to treat any portion of any qualified late year loss as arising on the first day of the next taxable year. Qualified late year losses are certain capital and ordinary losses which occur during the portion of the Fund’s taxable year subsequent to October 31 and December 31, respectively. For the taxable year ended February 28, 2023, the Fund did not elect to defer any post-October capital losses or any late-year ordinary losses.

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U.S. Diversified Real Estate ETF

NOTES TO FINANCIAL STATEMENTS
August 31, 2023 (Unaudited) (Continued)

During the current fiscal year, the Fund utilized $1,541,624 of long-term capital loss carry forward that was available as of February 28, 2022.

At February 28, 2023, the Fund had the following capital loss carryforwards:

The tax character of distributions paid by the Fund during the year ended February 28, 2023 were as follows:

The tax character of distributions paid by the Fund during the year ended February 28, 2022 were as follows:

NOTE 7 – SHARE TRANSACTIONS

Shares of the Fund are listed and traded on New York Stock Exchange Arca, Inc. (“NYSE Arca”). Market prices for the shares may be different from their NAV. The Fund issues and redeems shares on a continuous basis at NAV only in large blocks of shares, called “Creation Units.” Creation Units are issued and redeemed principally in-kind for securities included in a specified universe. Once created, shares generally trade in the secondary market at market prices that change throughout the day. Except when aggregated in Creation Units, shares are not redeemable securities of the Fund. Creation Units of the Fund may only be purchased or redeemed by certain financial institutions (“Authorized Participants”). An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a Depository Trust Company participant and, in each case, must have executed a Participant Agreement with the Distributor. Most retail investors do not qualify as Authorized Participants nor have the resources to buy and sell whole Creation Units. Therefore, they are unable to purchase or redeem the shares directly from the Fund. Rather, most retail investors may purchase shares in the secondary market with the assistance of a broker and are subject to customary brokerage commissions or fees.

The Fund currently offers one class of shares, which have no front end sales load, no deferred sales charge, and no redemption fee. A fixed transaction fee is imposed for the transfer and other transaction costs associated with the creation or redemption of Creation Units. The standard fixed creation and redemption transaction fee for the

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U.S. Diversified Real Estate ETF

NOTES TO FINANCIAL STATEMENTS
August 31, 2023 (Unaudited) (Continued)

Fund is $300 payable to the Custodian. The fixed transaction fee may be waived on transaction orders if the Fund’s Custodian has determined to waive some or all of the costs associated with the order, or another party, such as the Adviser, has agreed to pay such fee. In addition, a variable fee, payable to the Fund, may be charged on all cash transactions or substitutes for Creation Units of up to a maximum of 2% as a percentage of the value of the Creation Units subject to the transaction. Variable fees are imposed to compensate the Fund for the transaction costs associated with the cash transaction fees. Variable fees received by the Fund, if any, are displayed in the Capital Shares Transactions section of the Statement of Changes in Net Assets. The Fund may issue an unlimited number of shares of beneficial interest, with no par value. All shares of the Fund have equal rights and privileges.

NOTE 8 – PRINCIPAL RISKS

Concentration Risk. The Fund’s investments will be concentrated in an industry or group of industries to the extent the Index is so concentrated, and the Index is expected to be concentrated in real estate-related industries. Accordingly, the value of shares may rise and fall more than the value of shares that invest in securities of companies in a broader range of industries.

Real Estate Investment Risk. The Fund is expected to invest substantially all of its assets in real estate-related companies. Investments in real estate companies involve unique risks. Real estate companies, including REITs, may have limited financial resources, may trade less frequently and in limited volume, and may be more volatile than other securities.

The risks of investing in real estate companies include certain risks associated with the direct ownership of real estate and the real estate industry in general. Securities in the real estate sector are subject to the risk that the value of their underlying real estate may go down. Many factors may affect real estate values, including the general and local economies, the amount of new construction in a particular area, the laws and regulations (including zoning and tax laws) affecting real estate, and the costs of owning, maintaining and improving real estate. The availability of mortgages and changes in interest rates may also affect real estate values. Real estate companies are also subject to heavy cash flow dependency, defaults by borrowers, and self-liquidation. Because the Fund invests primarily in real estate companies, its performance will be especially sensitive to developments that significantly affect real estate companies.

NOTE 9 – BENEFICIAL OWNERSHIP

The beneficial ownership, either directly or indirectly, of 25% or more of the voting securities of a fund creates a presumption of control of a fund, under section 2(a)(9) of the 1940 Act. As of the end of the reporting period, Ronald Blue Trust, Inc. as a beneficial shareholder, owned greater than 25% of the outstanding shares of the Fund.

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U.S. Diversified Real Estate ETF

Expense Example

For the Six-Months Ended August 31, 2023 (Unaudited)

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares, and (2) ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period as indicated in the below Expense Example table.

Actual Expenses

The first line of the table provides information about actual account values based on actual returns and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid 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 the Period’’ to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table provides information about hypothetical account values based on a hypothetical return and hypothetical expenses based on the Fund’s actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual returns. 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 the 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. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid on purchases and sales of Fund shares. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher.

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U.S. Diversified Real Estate ETF

Review of Liquidity Risk Management Program

(Unaudited)

Pursuant to Rule 22e-4 under the Investment Company Act of 1940, the Trust, on behalf of the series of the Trust covered by this shareholder report (the “Series”), has adopted a liquidity risk management program to govern the Trust’s approach to managing liquidity risk. Rule 22e-4 seeks to promote effective liquidity risk management, thereby reducing the risk that a fund will be unable to meet its redemption obligations and mitigating dilution of the interests of fund shareholders. The Trust’s liquidity risk management program is tailored to reflect the Series’ particular risks, but not to eliminate all adverse impacts of liquidity risk, which would be incompatible with the nature of such Series.

The investment adviser to the Series has adopted and implemented its own written liquidity risk management program (the “Program”) tailored specifically to assess and manage the liquidity risk of the Series.

At a recent meeting of the Board of Trustees of the Trust, the Trustees received a report pertaining to the operation, adequacy, and effectiveness of implementation of the Program for the period ended December 31, 2022. The report concluded that the Program is reasonably designed to assess and manage the Series’ liquidity risk and has operated adequately and effectively to manage such risk. The report reflected that there were no liquidity events that impacted the Series’ ability to timely meet redemptions without dilution to existing shareholders. The report further noted that no material changes have been made to the Program since its implementation.

There can be no assurance that the Program will achieve its objectives in the future. Please refer to the prospectus for more information regarding the Series’ exposure to liquidity risk and other principal risks to which an investment in the Series may be subject.

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U.S. Diversified Real Estate ETF

Approval of Advisory Agreement & Board Considerations

Pursuant to a purchase agreement signed on March 24, 2023, Vident Capital Holdings, LLC, a subsidiary of MM VAM, LLC is expected to acquire Vident Advisory, LLC (“VA” or the “Adviser”) (the “Transaction”). MM VAM, LLC is an entity controlled by Casey Crawford. Following the Transaction, Mr. Crawford will effectively control VA. Pursuant to the Investment Company Act of 1940, as amended (the “1940 Act”), the investment advisory agreement between the Trust, on behalf of U.S. Diversified Real Estate ETF (the “Fund”) and VA (the “Current Advisory Agreement”) will automatically terminate upon the Transaction’s closing. The Current Sub-Advisory Agreement among the Adviser, Vident Investment Advisory, LLC (“VIA”), and the Trust, on behalf of the Fund, (the “Current VIA Sub-Advisory Agreement”) will also automatically terminate upon the Transaction’s closing.

Pursuant to Section 15(c) of the Investment Company Act of 1940 (the “1940 Act”), at a special meeting held on April 20, 2023 (the “Meeting”), the Board of Trustees (the “Board”) of ETF Series Solutions (the “Trust”) approved:

In considering the New Advisory Agreement and the Interim Advisory Agreement, the Board focused on the effect that the Transaction could be expected to have on the Adviser’s business and operations as they relate to the Fund and also took into consideration (i) the nature, extent, and quality of the services provided, and to be provided, by VA; (ii) the historical performance of the Fund; (iii) the cost of the services provided and the profits realized by VA or its affiliates from services rendered to the Fund as well as the estimated cost of the services to be provided by VA and the profits expected to be realized by VA from providing such services, including any other financial benefits enjoyed by VA or its affiliates; (iv) comparative fee and expense data for the Fund and other investment companies with similar investment objectives, including a report prepared by Barrington Partners, an independent third party, that compares the Fund’s investment performance, fees and expenses to relevant market benchmarks and peer groups (the “Barrington Report”); (v) the extent to which any economies of scale realized by VA in connection with its services to the Fund are, or will be, shared with Fund shareholders; and (vi) other factors the Board deemed to be relevant.

The Board also considered that the Adviser and its affiliate VIA, along with other service providers of the Fund, had provided written and oral updates on the firm over the course of the year with respect to its role as investment adviser and sub-

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adviser to the Fund, and the Board considered that information alongside the written materials presented at the Meeting, as well as the quarterly Board meeting held on April 5-6, 2023, in its consideration of whether the New Advisory Agreement and the Interim Advisory Agreement should be approved. In addition, the Board took into consideration performance and due diligence information related to VA, including the Barrington Report, that was provided to the Board in advance of its annual review of the Fund’s Current Advisory Agreement at its January 11-12, 2023 quarterly meeting. At both the Meeting and the April 5-6 meeting, representatives from VA provided an overview of the Transaction and the effect it would have on the management of the Fund. Representatives from the Adviser also provided an overview of the Fund’s strategies, the services provided to the Fund by the Adviser, and additional information about the Adviser’s personnel and business operations. Further, subsequent to the April 5-6 meeting, at the Board’s request, VA representatives provided additional information about the Transaction and discussed this information with Fund counsel prior to the Meeting. The Board then met with representatives of the Adviser at the Meeting to further discuss the Transaction and the additional information the Adviser had provided. The Adviser confirmed that the Transaction would not result in changes to Fund’s fees and expenses or the nature, extent and quality of services provided to the Fund, including their day-to-day management, or the personnel providing these services. The Board then discussed the materials and the Adviser’s oral presentations that the Board had received and any other information that the Board received at the Meeting and at prior meetings, and deliberated on the approval of the New Advisory Agreement and the Interim Advisory Agreement in light of this information. In its deliberations, the Board did not identify any single piece of information discussed below that was all-important or controlling.

Nature, Extent, and Quality of Services Provided. The Trustees considered the scope of services provided under the New Advisory Agreement and the Interim Advisory Agreement, noting that the Adviser had provided and would continue to provide investment management services to the Fund. The Trustees also considered that the services to be provided under the New Advisory Agreement and the Interim Advisory Agreement were identical in all material respects to those services provided under the Current Agreement. The Trustees noted that although VIA will cease to exist upon the close of the Transaction, VIA personnel will become Adviser personnel at such time and continue to provide services to the Fund on behalf of the Adviser. In considering the nature, extent, and quality of the services provided by the Adviser, the Board considered the quality of the Adviser’s compliance program and past reports from the Trust’s Chief Compliance Officer (“CCO”) regarding the CCO’s review of the Adviser’s compliance program. The Board also considered its previous experience with the Adviser providing investment management services to the Fund. The Board noted that it had received a copy of the Adviser’s registration form and financial statements,

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(Continued)

as well as the Adviser’s response to a detailed series of questions that included, among other things, information about the Adviser’s decision-making process, the background and experience of the firm’s key personnel, and the firm’s compliance policies, marketing practices, and brokerage information. The Board also considered the Adviser’s statements that the scope and quality of services provided to the Fund by the Adviser would not diminish as a result of the Transaction.

The Board also considered other services provided by the Adviser to the Fund, monitoring the Fund’s adherence to its investment restrictions and compliance with the Fund’s policies and procedures and applicable securities regulations, as well as monitoring the extent to which the Fund achieves its investment objective as a passively managed fund. Additionally, the Board considered that the Fund tracks an index created and owned by an affiliate of the Adviser. The Board noted the Adviser’s belief that shareholders invest in the Fund based on the investment principles incorporated into the index methodology of such Fund and the expectation that the Adviser will provide advisory services to such Fund based on its index methodology.

Historical Performance. The Trustees next considered the Fund’s performance, noting that it had recently undertaken a comprehensive review of such matters at its January 11-12, 2023 meeting. The Board observed that information regarding the Fund’s past investment performance, for periods ended September 30, 2022, had been included in the written materials previously provided to the Board, including the Barrington Report, which compared the performance results of the Fund with the returns of a group of ETFs selected by Barrington Partners as most comparable (the “Peer Group”) as well as with funds in the Fund’s Morningstar category – US Fund Real Estate (the “Category Peer Group”). Additionally, at the Board’s request, the Adviser identified the funds the Adviser considered to be the Fund’s most direct competitors (the “Selected Peer Group”) and provided the Selected Peer Group’s performance results.

In addition, the Board noted that, for the period ended September 30, 2022, the Fund’s performance on a gross of fees basis (i.e., excluding the effect of fees and expenses on Fund performance) was generally consistent with the performance of its underlying index, indicating that the Fund tracked its underlying index closely and in an appropriate manner.

U.S. Diversified Real Estate ETF: The Board noted that the Fund underperformed its broad-based benchmark, the MSCI US REIT Gross Index, for each of the one-year, three-year, and since inception periods. The MSCI US REIT Gross Index provides an indication of the performance of the U.S. REIT market. In comparing the Fund’s performance to that of the benchmark, the Board noted that the Fund, unlike its benchmark, screens out companies that are externally managed and companies that derive at least 85% of their income from ownership or management of real property.

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APPROVAL OF ADVISORY AGREEMENT & BOARD CONSIDERATIONS
(Continued)

The Board then noted that, for the one-year, three-year, and since inception periods ended September 30, 2022, the Fund outperformed the median return of its Peer Group, but the Fund only outperformed the median return of its Category Peer Group over the since inception period. The Board took into consideration that the Peer Group includes a mix of U.S. real estate and global real estate ETFs. The Board also noted that the Fund generally performed within the range of funds in the Selected Peer Group for the one-year and three-year periods ended September 30, 2022. The Board considered that the funds included in the Selected Peer Group were described by the Adviser as funds with a similar investment universe, investment exposure, REIT sector exposure, and number of holdings.

Cost of Services Provided and Economies of Scale. The Board observed that the Transaction would not result in an increase in the level of the advisory fee paid by the Fund to the Adviser. In this regard, the Board reviewed the Fund’s fees and expenses, noting that the advisory fees to be paid to the Adviser for its services to the Fund under the New Advisory Agreement and the Interim Advisory Agreement were identical to those in the Current Advisory Agreement. In addition, the Board took into consideration that the Adviser had charged, and would continue to charge, a “unified fee,” meaning the Fund pays no expenses other than the advisory fee and, if applicable, certain other costs such as interest, brokerage, acquired fund fees and expenses, extraordinary expenses, and, to the extent it is implemented, fees pursuant to a Distribution and/or Shareholder Servicing (12b-1) Plan. The Board noted that the Adviser had been and would continue to be responsible for compensating the Trust’s other service providers and paying the Fund’s other expenses out of the Adviser’s own fee and resources.

The Board noted that the U.S. Diversified Real Estate ETF has a fee waiver of four basis points and, as a result, its net expense ratio is less than its unified fee (described above). The fee waiver would terminate effective June 30, 2023. The Board took into consideration that it had recently evaluated a comparison of the Fund’s net expense ratio to its Peer Group and Category Peer Group, as shown in the Barrington Report, and its Selected Peer Group.

U.S. Diversified Real Estate ETF: The Board noted that the Fund’s net expense ratio was higher than the median net expense ratio, but within the range, of the funds in the Peer Group and lower than the median net expense ratio of funds in the Category Peer Group. In addition, the Board noted that the Fund’s net expense ratio was within the range of net expense ratios of funds in its Selected Peer Group.

The Board then considered the Adviser’s financial resources and information regarding the Adviser’s ability to support its management of the Fund and obligations under the unified fee arrangement, noting that the Adviser had provided its financial statements for the Board’s review. The Board also evaluated the compensation and benefits received, and expected to be received, by the Adviser from its relationship with the

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(Continued)

Fund, taking into account an analysis of the Adviser’s profitability, and expected profitability, with respect to the Fund at various actual and projected Fund asset levels. In evaluating these matters, the Board considered the resources that would become available to the Adviser as a result of the Transaction.

The Board expressed the view that it currently appeared that the Adviser might realize economies of scale in managing the Fund as assets grow in size. The Board noted that, should the Adviser realize economies of scale in the future, the Board would evaluate whether those economies were appropriately shared with Fund shareholders, whether through the structure and amount of the fee or by other means.

Conclusion. No single factor was determinative of the Board’s decision to approve the New Advisory Agreement and the Interim Advisory Agreement; rather, the Board based its determination on the total mix of information available to it. Based on a consideration of all the factors in their totality, the Board, including the Independent Trustees, determined that the New Advisory Agreement and the Interim Advisory Agreement, including the compensation payable under each agreement, was fair and reasonable to the Fund. The Board, including the Independent Trustees, determined that the approval of the New Advisory Agreement was in the best interests of the Fund and its shareholders. Further, the Board, including the Independent Trustees, determined that the approval of the Interim Advisory Agreement was in the best interest of the Fund and its shareholders, for a period of 150 days from the effective date of the Interim Advisory Agreement.

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U.S. Diversified Real Estate ETF

Federal Tax Information

(Unaudited)

QUALIFIED DIVIDEND INCOME
(Unaudited)

For the fiscal year ended February 28, 2023, certain dividends paid by the Fund may be subject to a maximum tax rate of 23.8%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003.

The percentage of dividends declared from ordinary income designated as qualified dividend income was 3.18%.

DIVIDENDS RECEIVED DEDUCTION

For corporate shareholders, the percent of ordinary income distributions qualifying for the corporate dividends received deduction for the fiscal year ended February 28, 2023 was 3.10%.

SHORT TERM CAPITAL GAIN

For the fiscal year ended February 28, 2023, the percentage of taxable ordinary income distributions that are designated as short-term capital gain distributions under Internal Revenue Section 871(k)(2)(C) for the Fund was 0.00%.

Information About Portfolio Holdings
(Unaudited)

The Fund files its complete schedule of portfolio holdings for its first and third fiscal quarters with the SEC on Part F of Form N-PORT. The Fund’s Part F of Form N-PORT is available without charge, upon request, by calling toll-free at (800) 617-0004. Furthermore, you may obtain Part F of Form N-PORT on the SEC’s website at www.sec.gov or the Fund’s website at www.videntam.com. The Fund’s portfolio holdings are posted on their website at www.videntam.com daily.

Information About Proxy Voting
(Unaudited)

A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is provided in the Statement of Additional Information (“SAI”). The SAI is available without charge upon request by calling toll-free at (800) 617-0004, by accessing the SEC’s website at www.sec.gov, or by accessing the Fund’s website at www.videntam.com.

Information regarding how the Fund voted proxies relating to portfolio securities during the twelve-months ending June 30 will be available by calling toll-free at (800) 617-0004 and the SEC’s website at www.sec.gov.

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U.S. Diversified Real Estate ETF

Information About the Trustees

(Unaudited)

The SAI includes additional information about the Fund’s Trustees and is available without charge, upon request, by calling (800) 617-004, by accessing the SEC’s website at www.sec.gov, or by accessing the Fund’s website at www.videntam.com.

Frequency Distribution of Premiums and Discounts
(Unaudited)

Information regarding how often shares of the Fund trade on an exchange at a price above (i.e., at a premium) or below (i.e., at a discount) to its daily NAV is available, without charge, on the Fund’s website at www.videntam.com.

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Adviser/Index Provider

Vident Asset Management
1125 Sanctuary Parkway, Suite 515
Alpharetta, Georgia 30009

Distributor

ALPS Distributors, Inc.
1290 Broadway, Suite 1000
Denver, Colorado 80203

Custodian

U.S. Bank National Association
1555 North Rivercenter Drive, Suite 302
Milwaukee, Wisconsin 53212

Transfer Agent

U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202

Independent Registered Public Accounting Firm

Cohen & Company, Ltd.
342 North Water Street, Suite 830
Milwaukee, Wisconsin 53202

Legal Counsel

Morgan, Lewis & Bockius LLP
1111 Pennsylvania Avenue NW
Washington, DC 20004-2541

U.S. Diversified Real Estate ETF

Symbol – PPTY
CUSIP – 26922A511