ck0001592900-20230630
Prospectus
October 31,
2023
EA
Bridgeway Blue Chip ETF
(a
series of EA Series Trust)
Ticker
Symbol: BBLU
Listed
on NYSE Arca, Inc.
EA
Bridgeway Omni Small-Cap Value ETF
(a
series of EA Series Trust)
Ticker
Symbol: BSVO
Listed
on The Nasdaq Stock Market
These
securities have not been approved or disapproved by the Securities and Exchange
Commission nor has the Securities and Exchange Commission passed upon the
accuracy or adequacy of this Prospectus. Any representation to the contrary is a
criminal offense.
EA
BRIDGEWAY BLUE CHIP ETF
Fund
Summary
INVESTMENT
OBJECTIVE
EA Bridgeway Blue Chip ETF (the
“Fund”) seeks to provide long-term total return on capital, primarily through
capital appreciation, but also some income.
FEES
AND
EXPENSES
This
table describes the fees and expenses that you may pay if you buy, hold, and
sell shares of the Fund (“Shares”). You may also pay brokerage commissions on
the purchase and sale of Shares, which are not reflected in the table or
example.
ANNUAL
FUND
OPERATING
EXPENSES
(EXPENSES
THAT YOU PAY EACH YEAR AS A PERCENTAGE OF THE VALUE OF YOUR
INVESTMENT)
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Management
Fee1,2 |
0.15 |
% |
Distribution
and/or Service (12b-1) Fees |
0.00 |
% |
Other
Expenses2 |
0.00 |
% |
Total
Annual Fund Operating Expenses |
0.15 |
% |
1The Fund’s
investment advisory agreement provides that the Fund’s investment adviser will
pay substantially all expenses of the Fund, except for the fee payment under the
Fund’s Investment Advisory Agreement, payments under the Fund’s Rule 12b-1
Distribution and Service Plan, brokerage expenses, acquired fund fees and
expenses, taxes, interest (including borrowing costs), litigation expense and
other non-routine or extraordinary expenses. Additionally, the Fund shall
be responsible for its non-operating expenses, and fees and expenses associated
with the Fund’s securities lending program, if
applicable.
2Management Fee and
Other Expenses have been restated to reflect the Fund’s current
fees.
EXAMPLE
The following example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other funds. The example
assumes that you invest $10,000 for the time periods indicated and then redeem
all of your Shares at the end of those periods. The example also assumes that
the Fund provides a return of 5% a year and that operating expenses remain the
same. You may also pay brokerage commissions on the purchase and sale of Shares,
which are not reflected in the example. Although your actual
costs may be higher or lower, based on these assumptions your costs would
be:
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One
Year: |
Three
Years: |
Five
Years: |
Ten
Years: |
$15 |
$48 |
$85 |
$192 |
PORTFOLIO
TURNOVER
The
Fund may pay transaction costs, including commissions when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance.
During
the most recent fiscal year ended June 30, 2023, the portfolio turnover rate of
the Fund was 12% of the average value of its investment
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The
Fund’s Investment Strategy
The
Fund is an actively managed exchange-traded fund (“ETF”) sub-advised by
Bridgeway Capital Management, LLC (the “Sub-Adviser”) that seeks to achieve its
investment objective by investing primarily in blue-chip stocks, and through
some income almost exclusively derived from dividends paid by companies held in
the Fund’s portfolio.
Under
normal circumstances, the Fund invests at least 80% of its net assets (plus
borrowings for investment purposes) in blue-chip stocks as determined at the
time of purchase. For purposes of the Fund’s investments, the Sub-Adviser
considers “blue-chip stocks” to be stocks that are issued by the largest 150
U.S. companies as defined by market capitalization. These stocks tend to be
well-known and established companies. As of June 30, 2023, the stocks in this
group generally had a market capitalization of more than $54
billion.
The
Sub-Adviser selects stocks within the blue-chip category using a model-driven
statistical approach. The statistical approach was developed utilizing academic
theory and incorporates logic, data, and evidence. Securities in the blue-chip
category are selected by the proprietary model that primarily uses market
capitalization ranking to establish a portfolio with reasonable industry
diversification as determined by the Sub-Adviser and excluding any tobacco
companies. This process typically results in a portfolio of approximately 35
securities. At times, however, the Fund may hold more or fewer stocks as a
result of corporate actions such as spin-offs or mergers and acquisitions.
Although the Fund seeks investments across a number of sectors, from time to
time, based on portfolio positioning, the Fund may have significant positions in
particular sectors.
The
Sub-Adviser’s investment process incorporates material environmental, social,
and governance (“ESG”) information as a consideration in the ongoing assessment
of all potential portfolio securities. The Sub-Adviser uses ESG research and/or
ratings information provided by third parties in performing this analysis and
considering ESG risks. As with any consideration used in assessing portfolio
securities, the Sub-Adviser may, at times, utilize ESG information to increase
the weighting of an issuer with a good ESG record or decrease the weighting of
an issuer with a poor ESG record. However, as ESG information is just one
investment consideration, ESG considerations are not solely determinative in any
investment decision made by the Sub-Adviser.
PRINCIPAL
RISKS
An
investment in the Fund involves risk, including those described below.
There
is no assurance that the Fund will achieve its investment objective.
An investor may
lose money by investing in the Fund. An investment in the Fund is not a bank
deposit and is not insured or guaranteed by the FDIC or any government
agency. More complete risk descriptions are set forth below
under the heading “Additional
Information About the Funds’ Risks”.
Blue-Chip
Stocks Risk. The
Fund is subject to the risk that blue-chip stocks will underperform other kinds
of investments for a period of time. This risk is true of any market segment.
Large companies do not have the same growth potential of smaller companies and
shareholders of large companies have less overall influence than they would in
smaller companies.
Environmental,
Social, and Governance Investing Risk. The
Fund’s incorporation of ESG considerations in its investment strategy may cause
it to make different investments than a fund that has a similar investment style
but does not incorporate such considerations in its strategy. As with the use of
any considerations involved in investment decisions, there is no guarantee that
the ESG investment considerations used by the Fund will result in the selection
of issuers that will outperform other issuers or help reduce risk in the Fund.
The Fund may underperform funds that do not incorporate these
considerations.
Information
Technology Sector Risk. The
information technology sector includes companies engaged in internet software
and services, technology hardware and storage peripherals, electronic
equipment and components, and semiconductors and semiconductor equipment.
Information technology companies face intense competition, both
domestically and internationally, which may have an adverse effect on profit
margins. Information technology
companies may have limited product lines, markets, financial
resources or personnel. The products of information technology companies may
face rapid product obsolescence due to technological developments and
frequent new product introduction, unpredictable changes in growth rates and
competition for the services of qualified personnel. Failure to introduce
new products, develop and maintain a loyal customer base or achieve general
market acceptance for their products could have a material adverse effect
on a company’s business. Companies in the information technology sector are
heavily dependent on intellectual property and the loss of patent,
copyright or trademark protections may adversely affect the profitability of
these companies.
Inflation
Risk. While
large companies tend to exhibit less price volatility than small companies,
historically they have not recovered as fast from a market decline.
Consequently, this Fund may expose shareholders to higher inflation risk (the
risk that the Fund value will not keep up with inflation) than some other stock
market investments.
Sector
Risk. Companies
with similar characteristics may be grouped together in broad categories called
sectors. A certain sector may underperform other sectors or the market as a
whole. As the Sub-Adviser allocates more of the Fund’s portfolio holdings to a
particular sector, the Fund’s performance will be more susceptible to any
economic, business or other developments which generally affect that
sector.
Focus
Investing Risk. The
Fund seeks to hold the stocks of approximately 35 companies. As a result, the
Fund invests a high percentage of its assets in a small number of companies,
which may add to Fund volatility.
Investment
Risk. When
you sell your Shares of the Fund, they could be worth less than what you paid
for them. The Fund could lose money due to short-term market movements and over
longer periods during market downturns. Securities may decline in value due to
factors affecting securities markets generally or particular asset classes or
industries represented in the markets. The value of a security may decline due
to general market conditions, economic trends or events that are not
specifically related to the issuer of the security or to factors that affect a
particular industry or group of industries. During a general downturn in the
securities markets, multiple asset classes may be negatively affected.
Therefore, you may lose money by investing in the
Fund.
Equity
Investing Risk. An
investment in the Fund involves risks similar to those of investing in any fund
holding equity securities, such as market fluctuations, changes in interest
rates and perceived trends in stock prices. The values of equity securities
could decline generally or could underperform other investments. In addition,
securities may decline in value due to factors affecting a specific issuer,
market or securities markets generally.
Management
and Operational Risk. The
Sub-Adviser uses statistical analyses and models to select investments for the
Fund. Any imperfections, errors or limitations in the models or analyses and
therefore any decisions made in reliance on such models or analyses could expose
the Fund to potential risks. In addition, the models used by the Sub-Adviser
assume that certain historical statistical relationships will continue. These
models are constructed based on historical data supplied by third parties and,
as a result, the success of relying on such models may depend heavily on the
accuracy and reliability of the supplied historical
data.
Statistical
Approach.
The Sub-Adviser uses a statistical approach to manage the Fund and resists
overriding the statistical models with qualitative or subjective data. However,
the Sub-Adviser will exclude stocks if the issuer of the stock is principally
engaged in the tobacco industry. The Sub-Adviser may also exclude stocks based
on certain narrow social reasons including, but not limited to, if the issuer of
the stock: (i) conducts or has direct investments in business operations in
Sudan; or (ii) is substantially engaged in the production or trade of
pornographic material. Other than companies principally engaged in the tobacco
industry, the number of companies referenced in (i) and (ii) in the
Sub-Adviser’s universe is usually “de
minimis.”
ETF
Risks
•Authorized
Participants, Market Makers and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act as
Authorized Participants (“APs”). In addition, there may be a limited number of
market makers and/or liquidity providers in the marketplace. To the extent
either of the following events occur, Shares may trade at a material discount to
NAV and possibly face delisting: (i) APs exit the business or otherwise become
unable to process creation and/or redemption
orders and no other APs step forward to perform these services, or
(ii) market makers and/or liquidity providers exit the business or significantly
reduce their business activities and no other entities step forward to perform
their functions.
•Premium-Discount
Risk. The
Shares may trade above or below their net asset value (“NAV”). The market prices
of Shares will generally fluctuate in accordance with changes in NAV as well as
the relative supply of, and demand for, Shares on the NYSE Arca, Inc. (the
“Exchange”) or other securities exchanges. The trading price of Shares may
deviate significantly from NAV during periods of market volatility or limited
trading activity in Shares.
•Cost
of Trading Risk. Investors
buying or selling Shares in the secondary market will pay brokerage commissions
or other charges imposed by brokers as determined by that broker. Brokerage
commissions are often a fixed amount and may be a significant proportional cost
for investors seeking to buy or sell relatively small amounts of
Shares.
•Trading
Risk. Although
the Shares are listed on the Exchange, there can be no assurance that an active
or liquid trading market for them will develop or be maintained. In addition,
trading in Shares on the Exchange may be halted. In stressed market conditions,
the liquidity of the Fund’s Shares may begin to mirror the liquidity of its
underlying portfolio holdings, which can be significantly less liquid than the
Fund’s Shares, potentially causing the market price of the Fund’s Shares to
deviate from its NAV.
Geopolitical/Natural
Disaster Risk. The
Fund’s investments are subject to geopolitical and natural disaster risks, such
as war, terrorism, trade disputes, political or economic dysfunction within some
nations, public health crises and related geopolitical events, as well as
environmental disasters, epidemics and/or pandemics, which may add to
instability in world economies and volatility in markets. The impact may be
short-term or may last for extended periods.
PERFORMANCE
The bar chart
and table immediately following illustrate the variability of the EA Bridgeway
Blue Chip ETF’s returns and are meant to provide some indication of the risks of
investing in the Fund. The Fund has adopted the performance of
the Bridgeway Funds, Inc., Blue
Chip Fund (the “Predecessor
Mutual Fund”) as the result of the reorganization of the Predecessor Mutual Fund
into the Fund (the “Reorganization”). Prior to the Reorganization, the Fund had
not yet commenced operations. The bar chart shows the changes in the Fund’s and
the Predecessor Mutual Fund’s performance from year to year over the past ten
years. The Fund’s total net operating expense ratio is equivalent to the net
operating expense ratio of the Predecessor Mutual Fund. Returns in the bar chart
and table for the Predecessor Mutual Fund have not been adjusted.
The
annual returns bar chart demonstrates the risks of investing in the Fund by
showing how the Fund and the Predecessor Mutual Fund’s performance have varied
from year to year over the past ten years. The table also demonstrates these
risks by showing how the Fund and the Predecessor Mutual Fund’s average annual
returns compare with those of a broad-based index. Unlike the Fund’s and the
Predecessor Mutual Fund’s returns, the index returns do not reflect any
deductions for fees, expenses or taxes. Past performance, before or after
taxes, is not indicative of future performance. Updated
performance information is available on the Fund’s website at www.bridgewayetfs.com.
Calendar Year Total
Return
For
the year-to-date period ended
September 30, 2023, the
Fund’s total return was 18.73%.
During the period shown in the bar chart, the highest
performance for the Fund and the Predecessor Mutual Fund for a
quarter was 17.41% (for the quarter ended June 30, 2020). The
lowest performance was
-20.36% (for the quarter ended March 31,
2020).
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Average Annual
Total Returns (For the periods ended December 31,
2022) |
One
Year |
Five
Years |
Ten
Years |
EA
Bridgeway Blue Chip ETF |
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|
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Return Before
Taxes |
-14.10% |
9.34% |
12.13% |
Return
After Taxes on Distributions (1) |
-21.79% |
4.44% |
9.23% |
Return
After Taxes on Distributions and Sale of Fund Shares (1) |
-2.83% |
7.28% |
9.95% |
S&P 500
Index (Net Return) (Reflects No Deductions for
Fees and Expenses) |
-18.11% |
9.42% |
12.56% |
(1)This table includes
returns for both the Fund and the Predecessor Mutual Fund. After-tax returns are
calculated using the historically highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown. In
certain cases, the figure representing “Return After Taxes on Distributions and
Sale of Shares” may be higher than the other return figures for the same period.
After-tax returns are not relevant to investors who hold their Shares (or to
investors who held their mutual fund shares) through tax-deferred arrangements
such as an individual retirement account (“IRA”) or other tax-advantaged
accounts.
INVESTMENT
ADVISER
&
INVESTMENT
SUB-ADVISER
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Investment
Adviser: |
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Empowered
Funds, LLC, dba EA Advisers (“Adviser”) |
Investment
Sub-Adviser: |
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Bridgeway
Capital Management, LLC (“Sub-Adviser”) |
PORTFOLIO
MANAGERS
The
Fund will be team-managed jointly and primarily by the investment management
team of the Sub-Adviser (the “Sub-Adviser PM Team”), as follows:
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Name |
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Title |
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Length
of Service to Fund* |
John
Montgomery |
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Co-Chief
Investment Officer, Portfolio Manager |
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Since
Inception – October 2022 |
Elena
Khoziaeva, CFA |
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Co-Chief
Investment Officer, Portfolio Manager |
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Since
Inception – October 2022 |
Michael
Whipple, CFA, FRM |
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Portfolio
Manager |
|
Since
Inception – October 2022 |
Christine
L. Wang, CFA, CPA |
|
Portfolio
Manager |
|
Since
Inception – October 2022 |
*Mr.
Montgomery has been a portfolio manager of the Predecessor Mutual Fund since its
inception on July 31, 1997. Ms. Khoziaeva and Mr. Whipple have been
portfolio managers of the Predecessor Mutual Fund since 2005. Ms. Wang has been
a portfolio manager of the Predecessor Mutual Fund since 2013.
SUMMARY
INFORMATION
ABOUT
PURCHASES,
SALES,
TAXES,
AND
FINANCIAL
INTERMEDIARY
COMPENSATION
PURCHASE
AND
SALE
OF
FUND
SHARES
The
Fund issues and redeems Shares on a continuous basis only in large blocks of
Shares, typically 25,000 Shares, called “Creation Units,” and only APs
(typically, broker-dealers) may purchase or redeem Creation Units. Creation
Units generally are issued and redeemed ‘in-kind’ for securities and partially
in cash. Individual Shares may only be purchased and sold in secondary market
transactions through brokers. Once created, individual Shares generally trade in
the secondary market at market prices that change throughout the day. Market
prices of Shares may be greater or less than their NAV. Except
when aggregated in Creation Units, the Fund’s shares are not redeemable
securities.
TAX
INFORMATION
The
Fund’s distributions generally are taxable to you as ordinary income, capital
gain, or some combination of both, unless your investment is in an Individual
Retirement Account (“IRA”) or other tax-advantaged account. However, subsequent
withdrawals from such a tax-advantaged account may be subject to federal income
tax. You should consult your tax advisor about your specific tax
situation.
PURCHASES
THROUGH
BROKER-DEALERS
AND
OTHER
FINANCIAL
INTERMEDIARIES
If
you purchase Shares through a broker-dealer or other financial intermediary, the
Fund and its related companies may pay the intermediary for the sale of Shares
and related services. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your salesperson to
recommend Shares over another investment. Ask your salesperson or visit your
financial intermediary’s website for more information.
EA
BRIDGEWAY
OMNI
SMALL-CAP
VALUE
ETF
Fund
Summary
INVESTMENT
OBJECTIVE
EA Bridgeway Omni Small-Cap Value
ETF (the “Fund”) seeks to provide long-term total return on
capital, primarily through capital appreciation.
FEES
AND
EXPENSES
This table describes the fees and expenses that you may pay if you
buy, hold, and sell shares of the Fund (“Shares”). You may also pay brokerage
commissions on the purchase and sale of Shares, which are not reflected in the
table or example.
ANNUAL
FUND
OPERATING
EXPENSES
(EXPENSES
THAT YOU PAY EACH YEAR AS A PERCENTAGE OF THE VALUE OF YOUR
INVESTMENT)
|
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| |
Management
Fee1,2 |
0.47 |
% |
Distribution
and/or Service (12b-1) Fees |
0.00 |
% |
Other
Expenses2 |
0.00 |
% |
Total
Annual Fund Operating Expenses |
0.47 |
% |
1The Fund’s
investment advisory agreement provides that the Fund’s investment adviser will
pay substantially all expenses of the Fund, except for the fee payment under the
Fund’s Investment Advisory Agreement, payments under the Fund’s Rule 12b-1
Distribution and Service Plan, brokerage expenses, acquired fund fees and
expenses, taxes, interest (including borrowing costs), litigation expense and
other non-routine or extraordinary expenses. Additionally, the Fund shall
be responsible for its non-operating expenses, and fees and expenses associated
with the Fund’s securities lending program, if
applicable.
2Management Fee and Other
Expenses have been restated to reflect the Fund’s current
fees.
EXAMPLE
The following example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other funds. The example
assumes that you invest $10,000 for the time periods indicated and then redeem
all of your Shares at the end of those periods. The example also assumes that
the Fund provides a return of 5% a year and that operating expenses remain the
same. You may also pay brokerage commissions on the purchase and sale of Shares,
which are not reflected in the example. Although your actual
costs may be higher or lower, based on these assumptions your costs would
be:
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| |
One
Year: |
Three
Years: |
Five
Years: |
Ten
Years: |
$48 |
$151 |
$263 |
$591 |
PORTFOLIO
TURNOVER
The
Fund may pay transaction costs, including commissions when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Shares are
held in a taxable account. These costs, which are not reflected in annual fund
operating expenses or in the example, affect the Fund’s performance.
During
the most recent fiscal year ended June 30, 2023, the portfolio turnover
rate of the Fund was 45% of the average value of its investment
portfolio.
PRINCIPAL INVESTMENT
STRATEGIES
The Fund is an actively managed exchange-traded fund
(“ETF”) sub-advised by Bridgeway Capital Management, LLC (the “Sub-Adviser”) and
does not seek to replicate the performance of a specified index. The Fund seeks
to
achieve
its investment objective by investing primarily in a broad and diverse group of
small-cap stocks that the Sub-Adviser determines are value stocks.
The
Fund invests in a broad and diverse group of small-cap stocks that the
Sub-Adviser determines to be value stocks. Value stocks are those the
Sub-Adviser determines are priced cheaply relative to some financial measures of
worth (“value measures”), such as the ratio of price to book, price to earnings,
price to sales, or price to cash flow. Small-cap securities are selected by
relative ranking on value measures to establish a broad and diverse portfolio,
as determined by the Sub-Adviser’s statistical, evidence-based approach. The
Sub-Adviser’s statistical, evidence-based approach is derived from research and
academic theory using market and financial data from multiple decades to
identify the types of securities and portfolio construction rules that the
Sub-Adviser expects to generate higher returns relative to the overall U.S.
equity market over the long-term. The Sub-Adviser uses a market capitalization
approach to weight the securities in the Fund’s portfolio subject to risk
constraints, such as limiting maximum position size to address security-specific
risk and limiting environmental, social and governance (“ESG”) risks. This means
that a security’s weight in the Fund’s portfolio at the time of purchase is
roughly proportional to its market capitalization relative to the other
securities in the portfolio.
Under
normal circumstances, the Fund invests 80% of its net assets (plus borrowings
for investment purposes) in equity or equity-related securities (“common
stocks”) of small-cap companies at the time of purchase. Equity-related
securities include securities such as warrants and rights that may be issued as
a result of corporate actions related to stocks held by the Fund. For purposes
of the Fund’s investments, the Sub-Adviser considers small-cap stocks to be
those of companies that have a market capitalization generally in the lowest 10%
of total market capitalization or smaller than the 1,000th largest U.S. company,
whichever results in the higher market capitalization break. The Fund primarily
invests in small-cap stocks that are listed on the New York Stock Exchange, the
NYSE American and NASDAQ and the Sub-Adviser determines the lowest 10% of total
market capitalization and 1000th largest U.S. company by ranking these stocks in
order of market capitalization.” As of June 30, 2023, the stocks in this
group had a market capitalization less than $8 billion. This dollar amount will
change with market conditions.
The
Sub-Adviser’s investment process incorporates material ESG information as a
consideration in the ongoing assessment of potential portfolio securities. The
Sub-Adviser uses ESG research and/or ratings information provided by third
parties in performing this analysis and considering ESG risks as it relates to
the universe of small-cap value stocks identified by the Sub-Adviser’s
statistical, evidence-based approach. The Sub-Adviser has determined through
statistical analysis that certain lower ESG ratings (e.g., industry-adjusted
overall scores) may represent ESG risk and, thus result in the Sub-Adviser
reducing the weighting. As with any consideration used in assessing portfolio
securities, the Sub-Adviser may, at times, utilize ESG information, when
available, to increase the weighting of an issuer with a good ESG record (e.g.,
a higher rating) or decrease the weighting of an issuer with a poor ESG record
(e.g., a lower rating). However, as ESG information is just one investment
consideration, ESG considerations are not solely determinative in any investment
decision made by the Sub-Adviser. In addition, the Sub-Adviser may increase the
weighting above the position size suggested by market capitalization or decrease
the weighting below the position size suggested by market capitalization by
proprietary amounts determined by the Sub-Adviser through statistical
research.
The
Sub-Adviser will not necessarily sell a stock if it “migrates” to a different
market capitalization category after purchase. As a result, due to such
“migration” or other market movements, the Fund may have less than 80% of its
assets in small-cap stocks at any point in time.
Use
of the term “omni” in the name refers to the fact that the Fund intends to
invest in a broad and diverse group of small-cap value stocks generally ranging
between 600 to 700 issuers that approximately reflect the risk and return of all
small-cap value stocks as a whole.
Although
the Fund seeks investments across a number of sectors, from time to time, based
on economic conditions and portfolio positioning to reflect a profile of a
universe of stocks, the Fund may have significant positions in particular
sectors. For example, the Sub-Adviser’s investment process has resulted (in
recent years) in the Fund having a significant allocation to companies in the
financials sector because those companies have tended to meet the Sub-Adviser’s
criteria for investment as a value stock.
PRINCIPAL
RISKS
An
investment in the Fund involves risk, including those described below.
There
is no assurance that the Fund will achieve its investment objective.
An investor may
lose money by investing in the Fund. An investment in the Fund is not a bank
deposit and is not insured or guaranteed by the FDIC or any government
agency. More complete risk descriptions are set forth below
under the heading “Additional
Information About the Funds’ Principal Risks”.
Small-Cap
Company Risk. Investing
in small-cap stocks may involve greater volatility and risk than investing in
large- or mid-cap stocks because small-cap companies may have less management
experience, limited financial resources and minimal product
diversification.
Value
Stocks Risk. Value
investing carries the risk that the market will not recognize a security’s
intrinsic value for a long time or that a stock judged to be undervalued by
various value measures may actually be appropriately priced. In addition, value
stocks as a group may be out of favor at times and underperform the overall
equity market for long periods while the market concentrates on other types of
stocks, such as “growth” stocks.
Environmental,
Social, and Governance Investing Risk. The
Fund’s incorporation of ESG considerations in its investment strategy may cause
it to make different investments than a fund that has a similar investment style
but does not incorporate such considerations in its strategy. There are
significant differences in interpretations of what it means for a company to
meet ESG criteria. The Fund’s third party ESG research and/or ratings of a
company may differ from that of other funds or of the Sub-Adviser’s or an
investor’s assessment of such company. As a result, the companies deemed to have
good ESG records may not reflect the beliefs and values of any particular
investor and may not exhibit positive or favorable ESG characteristics as
determined by other funds. The third party ESG research and/or ratings
information is dependent on the availability of timely and accurate ESG data
being reported by companies to evaluate their ESG criteria. As with the use of
any considerations involved in investment decisions, there is no guarantee that
the ESG investment considerations used by the Fund will result in the selection
of issuers that will outperform other issuers or help reduce risk in the Fund.
The Fund may underperform funds that do not incorporate these
considerations.
Sector
Risk. Companies
with similar characteristics may be grouped together in broad categories called
sectors. A certain sector may underperform other sectors or the market as a
whole. As the Sub-Adviser allocates more of the Fund’s portfolio holdings to a
particular sector, the Fund’s performance will be more susceptible to any
economic, business or other developments which generally affect that
sector.
Financials
Sector Risk.
Performance of companies in the financials sector may be adversely impacted by
many factors, including, among others, changes in government regulations,
economic conditions, and interest rates, credit rating downgrades, and decreased
liquidity in credit markets. The extent to which the Fund may invest in a
company that engages in securities-related activities or banking is limited by
applicable law. The impact of changes in capital requirements and recent or
future regulation of any individual financial company, or of the financials
sector as a whole, cannot be predicted. In recent years, cyberattacks and
technology malfunctions and failures have become increasingly frequent in this
sector and have caused significant losses to companies in this sector, which may
negatively impact the Fund.
Investment
Risk. When
you sell your Shares of the Fund, they could be worth less than what you paid
for them. The Fund could lose money due to short-term market movements and over
longer periods during market downturns. Securities may decline in value due to
factors affecting securities markets generally or particular asset classes or
industries represented in the markets. The value of a security may decline due
to general market conditions, economic trends or events that are not
specifically related to the issuer of the security or to factors that affect a
particular industry or group of industries. During a general downturn in the
securities markets, multiple asset classes may be negatively affected.
Therefore, you may lose money by investing in the
Fund.
Equity
Investing Risk. An
investment in the Fund involves risks similar to those of investing in any fund
holding equity securities, such as market fluctuations, changes in interest
rates and perceived trends in stock prices. The values of equity securities
could decline generally or could underperform other investments. In addition,
securities may decline in value due to factors affecting a specific issuer,
market or securities markets generally.
Management
and Operational Risk. The
Sub-Adviser uses a statistical, evidence-based approach including statistical
analyses and models and historical information to select investments for the
Fund. Any imperfections, errors or limitations in the models or analyses may
cause the resulting information to be incorrect and therefore any decisions made
in reliance on such models or analyses could expose the Fund to potential risks.
In addition, the models and portfolio construction rules used by the Sub-Adviser
assume that certain historical statistical relationships will continue. These
models are constructed based on historical data supplied by third parties and,
as a result, the success of relying on such models may depend heavily on the
accuracy and reliability of the supplied historical
data.
Statistical
Approach.
The Sub-Adviser uses a statistical approach to manage the Fund and resists
overriding the statistical models with qualitative or subjective data. However,
the Sub-Adviser will exclude stocks if the issuer of the stock is principally
engaged in the tobacco industry. The Sub-Adviser may also exclude stocks based
on certain narrow social reasons including, but not limited to, if the issuer of
the stock: (i) conducts or has direct investments in business operations in
Sudan; or (ii) is substantially engaged in the production or trade of
pornographic material. Other than companies principally engaged in the tobacco
industry, the number of companies referenced in (i) and (ii) in the
Sub-Adviser’s universe is usually “de
minimis.”
ETF
Risks
•Authorized
Participants, Market Makers and Liquidity Providers Concentration
Risk.
The Fund has a limited number of financial institutions that may act as
Authorized Participants (“APs”). In addition, there may be a limited number of
market makers and/or liquidity providers in the marketplace. To the extent
either of the following events occur, Shares may trade at a material discount to
NAV and possibly face delisting: (i) APs exit the business or otherwise become
unable to process creation and/or redemption orders and no other APs step
forward to perform these services, or (ii) market makers and/or liquidity
providers exit the business or significantly reduce their business activities
and no other entities step forward to perform their functions.
•Premium-Discount
Risk.
The Shares may trade above or below their net asset value (“NAV”). The market
prices of Shares will generally fluctuate in accordance with changes in NAV as
well as the relative supply of, and demand for, Shares on the The Nasdaq Stock
Market, Inc (the “Exchange”) or other securities exchanges. The trading price of
Shares may deviate significantly from NAV during periods of market volatility or
limited trading activity in Shares. The existence of significant market
volatility, disruptions to creations and redemptions, or potential lack of an
active trading market for Fund Shares (including through a trading halt), among
other factors, may result in the Shares trading significantly above (at a
premium) or below (at a discount) to NAV. If you buy Fund Shares when their
market price is at a premium or sell the Fund Shares when their market price is
at a discount, you may pay more than, or receive less than, NAV,
respectively.
•Cost
of Trading Risk. Investors
buying or selling Shares in the secondary market will pay brokerage commissions
or other charges imposed by brokers as determined by that broker. Brokerage
commissions are often a fixed amount and may be a significant proportional cost
for investors seeking to buy or sell relatively small amounts of
Shares.
•Trading
Risk. Although
the Shares are listed on the Exchange, there can be no assurance that an active
or liquid trading market for them will develop or be maintained. In addition,
trading in Shares on the Exchange may be halted. In stressed market conditions,
the liquidity of the Fund’s Shares may begin to mirror the liquidity of its
underlying portfolio holdings, which can be significantly less liquid than the
Fund’s Shares, potentially causing the market price of the Fund’s Shares to
deviate from its NAV.
Geopolitical/Natural Disaster Risk.
The Fund’s investments are subject to geopolitical and natural
disaster risks, such as war, terrorism, trade disputes, political or economic
dysfunction within some nations, public health crises and related geopolitical
events, as well as environmental disasters, epidemics and/or pandemics, which
may add to instability in world economies and volatility in markets. The impact
may be short-term or may last for extended
periods.
PERFORMANCE
The
following performance information indicates some of the risks of investing in
the Fund.
The bar chart
and table immediately following illustrate the variability of the EA Bridgeway
Omni Small-Cap Value ETF’s returns and are meant to provide some indication of
the risks of investing in the Fund. The Fund has adopted the
accounting and performance history of the Bridgeway Funds, Inc. Omni Tax-Managed
Small-Cap Value Fund (the “Predecessor Mutual Fund”) as the result of the
reorganization of the Predecessor Mutual Fund into the Fund (the
“Reorganization”). Prior to the Reorganization, the Fund had not yet commenced
operations. The information shown below is for the Fund and the Predecessor
Mutual Fund. The Fund’s total net operating expense ratio is equivalent to the
net operating expense ratio of the Predecessor Mutual Fund. Returns in the bar
chart and table for the Predecessor Mutual Fund have not been
adjusted.
The
annual returns bar chart demonstrates the risks of investing in the Fund by
showing how the Fund and the Predecessor Mutual Fund’s performance have varied
from year to year over the past ten years. The table also demonstrates these
risks by showing how the Fund and the Predecessor Mutual Fund’s average annual
returns compare with those of a broad-based index. Unlike the Fund’s and the
Predecessor Mutual Fund’s returns, the index returns do not reflect any
deductions for fees, expenses or taxes. Past
performance, before or after taxes, is not indicative of future
performance. Updated performance information is available from
the Fund’s website www.bridgewayetfs.com.
Calendar Year Total
Return
For
the year-to-date period ended
September 30,
2023, the Fund’s total return was 0.50%.
During the period shown in the bar chart, the best
performance for the Predecessor Mutual Fund for a quarter was
34.38% (for the quarter ended December 31, 2020).
The worst performance was
-42.37% (for the quarter ended March 31,
2020).
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Average
Annual Total Returns (For the periods ended December 31,
2022) |
One
Year |
Five
Years |
Ten
Years |
EA
Bridgeway Omni Small-Cap Value ETF |
|
|
|
Return Before
Taxes |
-5.01% |
5.56% |
9.72% |
Return
After Taxes on Distributions(1) |
-7.76% |
4.33% |
8.69% |
Return
After Taxes on Distributions and Sale of Fund Shares(1) |
-1.03% |
4.18% |
7.81% |
Russell 2000
Value Index (Reflects No Deductions for
Fees, Expenses, or Taxes) |
-14.48% |
4.13% |
8.48% |
(1)This table shows returns
for the Predecessor Mutual Fund. After-tax returns are
calculated using the historically highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown. In
certain cases, the figure representing “Return After Taxes on Distributions and
Sale of Shares” may be higher than the other return figures for the same period.
After-tax returns shown are not relevant to investors who hold their mutual fund
shares through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts.
INVESTMENT
ADVISER
& INVESTMENT
SUB-ADVISER
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Investment
Adviser: |
Empowered
Funds, LLC, dba EA Advisers (“Adviser”) |
Investment
Sub-Adviser: |
Bridgeway
Capital Management, LLC (“Sub-Adviser”)
|
PORTFOLIO
MANAGERS
The
Fund will be team-managed jointly and primarily by the investment management
team of the Sub-Adviser (the “Sub-Adviser PM Team”), as follows.
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Name |
|
Title |
|
Length
of Service to Fund* |
John
Montgomery |
|
Co-Chief
Investment Officer, Portfolio Manager |
|
Since
Inception – March 2023 |
Christine
L. Wang, CFA, CPA |
|
Portfolio
Manager |
|
Since
Inception – March 2023 |
Elena
Khoziaeva, CFA |
|
Co-Chief
Investment Officer, Portfolio Manager |
|
Since
Inception – March 2023 |
Michael
Whipple, CFA, FRM |
|
Portfolio
Manager |
|
Since
Inception – March 2023 |
*Mr.
Montgomery and Ms. Wang have been portfolio managers of the Predecessor Mutual
Fund since its inception on December 31, 2010. Ms. Khoziaeva and Mr.
Whipple have been portfolio managers of the Predecessor Mutual Fund since
2013.
SUMMARY
INFORMATION
ABOUT
PURCHASES,
SALES,
TAXES,
AND
FINANCIAL
INTERMEDIARY
COMPENSATION
PURCHASE
AND
SALE
OF
FUND
SHARES
The
Fund issues and redeems Shares on a continuous basis only in large blocks of
Shares, typically 25,000 Shares, called “Creation Units,” and only APs
(typically, broker-dealers) may purchase or redeem Creation Units. Creation
Units generally are issued and redeemed ‘in-kind’ for securities and partially
in cash. Individual Shares may only be purchased and sold in secondary market
transactions through brokers. Once created, individual Shares generally trade in
the secondary market at market prices that change throughout the day. Market
prices of Shares may be greater or less than their NAV. Except
when aggregated in Creation Units, the Fund’s shares are not redeemable
securities.
TAX
INFORMATION
The
Fund’s distributions generally are taxable to you as ordinary income, capital
gain, or some combination of both, unless your investment is in an Individual
Retirement Account (“IRA”) or other tax-advantaged account. However, subsequent
withdrawals from such a tax-advantaged account may be subject to federal income
tax. You should consult your tax advisor about your specific tax
situation.
PURCHASES
THROUGH
BROKER-DEALERS
AND
OTHER
FINANCIAL
INTERMEDIARIES
If
you purchase Shares through a broker-dealer or other financial intermediary, the
Fund and its related companies may pay the intermediary for the sale of Shares
and related services. These payments may create a conflict of interest by
influencing the broker-dealer or other intermediary and your salesperson to
recommend Shares over another investment. Ask your salesperson or visit your
financial intermediary’s website for more information.
ADDITIONAL
INFORMATION
ABOUT
THE
FUNDS
How
are the Funds Different from a Mutual Funds?
Redeemability.
Mutual
fund shares may be bought from, and redeemed with, the issuing fund for cash at
NAV typically calculated once at the end of the business day. Shares of the
Funds, by contrast, cannot be purchased from or redeemed with the Funds except
by or through APs (typically, broker-dealers), and then principally for an
in-kind basket of securities (and a limited cash amount). In addition, each Fund
issues and redeems Shares on a continuous basis only in large blocks of Shares
(for example, 25,000 Shares) called “Creation Units.”
Exchange
Listing. Unlike
mutual fund shares, Shares of each Fund are listed for trading on the Exchange.
Investors can purchase and sell Shares on the secondary market through a broker.
Investors purchasing Shares in the secondary market through a brokerage account
or with the assistance of a broker may be subject to brokerage commissions and
charges. Secondary-market transactions do not occur at NAV, but at market prices
that change throughout the day, based on the supply of, and demand for, Shares
and on changes in the prices of a Fund’s portfolio holdings. The market price of
Shares may differ from the NAV of a Fund. The difference between market price of
Shares and the NAV of a Fund is called a premium when the market price is above
the reported NAV and called a discount when the market price is below the
reported NAV, and the difference is expected to be small most of the time,
though it may be significant, especially in times of extreme market
volatility.
Tax
Treatment. The
Funds and the Shares have been designed to be tax-efficient. Specifically, their
in-kind creation and redemption feature has been designed to protect Fund
shareholders from adverse tax consequences applicable to non-ETF registered
investment companies as a result of cash transactions in the non-ETF registered
investment company’s shares, including cash redemptions. Nevertheless, to the
extent redemptions from a Fund are paid in cash, the Fund may realize capital
gains or losses, including in some cases short-term capital gains, upon the sale
of portfolio securities to generate the cash to satisfy the
redemption.
Transparency.
Each
Fund’s portfolio holdings are disclosed on its website daily after the close of
trading on the Exchange and prior to the opening of trading on the Exchange the
following day. A description of the Funds’ policies and procedures with respect
to the disclosure of the Funds’ portfolio holdings is available in the Funds’
Statement of Additional Information (“SAI”).
Premium/Discount
Information. Information
about the premiums and discounts at which the Funds’ Shares have traded will be
available at www.bridgewayetfs.com.
ADDITIONAL
INFORMATION
ABOUT
THE
FUNDS’
INVESTMENT
OBJECTIVES
AND
STRATEGIES
Each
Fund’s investment objective is a non-fundamental investment policy and may be
changed without a vote of shareholders with prior written notice to
shareholders.
EA
Bridgeway Blue Chip ETF (BBLU)
Under
normal circumstances, the Fund will invest at least 80% of its net assets, plus
borrowings for investment purposes, in blue-chip stocks as determined at the
time of purchase. The Fund’s 80% policy is non-fundamental and can be changed
without shareholder approval. However, Fund shareholders would be given at least
60 days’ notice prior to any such change.
The
Sub-Adviser selects stocks within the blue-chip category using a model-driven
statistical approach. The statistical approach was developed utilizing academic
theory and incorporates logic, data, and evidence. Securities in the blue-chip
category are selected by the proprietary model that primarily uses market
capitalization ranking to establish a portfolio with reasonable industry
diversification as determined by the Sub-Adviser and excluding any tobacco
companies. This process typically results in a portfolio of approximately 35
securities. At times, however, the Fund may hold more or fewer stocks as a
result of corporate actions such as spin-offs or mergers and acquisitions.
Although the Fund seeks investments across a number of sectors, from time to
time, based on portfolio positioning, the Fund may have significant positions in
particular sectors.
The
Sub-Adviser’s investment process incorporates material ESG information as a
consideration in the ongoing assessment of all potential portfolio securities.
The Sub-Adviser uses ESG research and/or ratings information provided by third
parties in performing this analysis and considering ESG risks. As with any
consideration used in assessing portfolio securities, the Sub-Adviser may, at
times, utilize ESG information to increase the weighting of an issuer with a
good ESG record or decrease the weighting of an issuer with a poor ESG record.
However, as ESG information is just one investment consideration, ESG
considerations are not solely determinative in any investment decision made by
the Sub-Adviser.
Temporary
Defensive Positions.
From time to time, the Fund may take temporary defensive positions that are
inconsistent with its principal investment strategies in attempting to respond
to adverse market, economic, political, or other conditions. In those instances,
the Fund may hold up to 100% of its assets in cash; short-term U.S. government
securities and government agency securities; investment grade money market
instruments; money market mutual funds; investment grade fixed income
securities; repurchase agreements; commercial paper; cash equivalents; and
exchange-traded investment vehicles that principally invest in the foregoing
instruments. As a result of engaging in these temporary measures, the Fund may
not achieve its investment objective.
EA
BRIDGEWAY
OMNI
SMALL-CAP
VALUE
ETF (BSVO)
Under
normal circumstances, the Fund invests 80% of its net assets (plus borrowings
for investment purposes) in common stocks of small-cap companies at the time of
purchase. The Fund’s 80% policy is non-fundamental and can be changed without
shareholder approval. However, Fund shareholders would be given at least 60
days’ notice prior to any such change.
The
Fund invests in a broad and diverse group of small-cap stocks that the
Sub-Adviser determines to be value stocks. Value stocks are those the
Sub-Adviser determines are priced cheaply relative to some financial measures of
worth (“value measures”), such as the ratio of price to book, price to earnings,
price to sales, or price to cash flow. Small-cap securities are selected by
relative ranking on value measures to establish a broad and diverse portfolio,
as determined by the Sub-Adviser’s statistical, evidence-based approach. The
Sub-Adviser’s statistical, evidence-based approach is derived from research and
academic theory using market and financial data from multiple decades to
identify the types of securities and portfolio construction rules that the
Sub-Adviser expects to generate higher returns relative to the overall US equity
market over the long-term. The Sub-Adviser uses a market capitalization approach
to weight the securities in the Fund’s portfolio subject to risk constraints.
This means that a security’s weight in the Fund’s portfolio at the time of
purchase is roughly proportional to its market capitalization relative to the
other securities in the portfolio. For example, a small-cap stock with a higher
relative market capitalization generally will have a greater representation in a
Fund. However, the Sub-Adviser may modify weights based on a consideration of
various factors it deems appropriate.
The
Sub-Adviser’s investment process incorporates material ESG information, when
available, as a consideration in the ongoing assessment of potential portfolio
securities. The Sub-Adviser uses ESG research and/or ratings information
provided by third parties in performing this analysis and considering ESG risks
as it relates to the universe of small-cap value stocks identified by the
Sub-Adviser’s statistical, evidence-based approach. The Sub-Adviser has
determined through statistical analysis that certain lower ESG ratings (e.g.,
industry-adjusted overall scores) may represent ESG risk and thus result in the
Sub-Adviser reducing the weighting. As with any consideration used in assessing
portfolio securities, the Sub-Adviser may, at times, utilize ESG information to
increase the weighting of an issuer with a good ESG record or decrease the
weighting of an issuer with a poor ESG record. However, as ESG information is
just one investment consideration, ESG considerations are not solely
determinative in any investment decision made by the Sub-Adviser.
After
a defined holding period determined by the Sub-Adviser, positions that no longer
meet the Fund’s value definition are exited. The Sub-Adviser will not
necessarily sell a stock if it “migrates” to a different market capitalization
category after purchase. As a result, due to such “migration” or other market
movements, the Fund may have less than 80% of its assets in small-cap stocks at
any point in time.
The
Fund takes advantage of the belief that equity investing should be for the long
run and tries to capture systematic or asset class sources of returns rather
than trying to generate extra returns through stock picking.
Specifically,
this Fund seeks to provide exposure to a broadly diversified group of small-cap
value stocks and deliver the returns from exposure to that group as a whole. In
other words, the Fund seeks to capture systematic or asset class sources of
returns of this broad group of small-cap value stocks rather than seeking to
identify a smaller subset based on different expectations of returns among
individual small-cap value stocks through stock picking. This approach is
sometimes referred to as “passive, asset-class investing”.
Although
the Fund seeks investments across a number of sectors, from time to time, based
on economic conditions and portfolio positioning to reflect a profile of a
universe of stocks, the Fund may have significant positions in particular
sectors. For example, the Sub-Adviser’s investment process has resulted (in
recent years) in the Fund having a significant allocation to companies in the
financials sector because those companies have tended to meet the Sub-Adviser’s
criteria for investment as a value stock.
Temporary
Defensive Positions.
From time to time, the Fund may take temporary defensive positions that are
inconsistent with its principal investment strategies in attempting to respond
to adverse market, economic, political, or other conditions. In those instances,
the Fund may hold up to 100% of its assets in cash; short-term U.S. government
securities and government agency securities; investment grade money market
instruments; money market mutual funds; investment grade fixed income
securities; repurchase agreements; commercial paper; cash equivalents; and
exchange-traded investment vehicles that principally invest in the foregoing
instruments. As a result of engaging in these temporary measures, the Fund may
not achieve its investment objective.
ADDITIONAL
INFORMATION
ABOUT
THE
FUNDS’
RISKS
The
table below provides additional information about the risks of investing in each
Fund (in alphabetical order), including the principal risks identified under
“Principal Risks” in each Fund Summary. Following the table, each risk is
explained.
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Principal
Risks |
BBLU |
BSVO |
Blue
Chip Stocks Risk |
X |
|
Environmental,
Social and Governance Investing Risk |
X |
X |
Equity
Investing Risk |
X |
X |
ETF
Risks |
X |
X |
Financials
Sector Risk |
| X |
Focus
Investing Risk |
X |
|
Fund
Cybersecurity Risk |
X |
X |
Geopolitical/Natural
Disaster Risks |
X |
X |
Inflation
Risk |
X |
|
Information
Technology Sector Risk |
X |
|
Investment
Risk |
X |
X |
Management
Risk |
X |
X |
Management
and Operational Risk |
X |
X |
Market
Risk |
X |
X |
Sector
Risk |
X |
X |
Small-Cap
Company Risk |
| X |
Strategy
Risk |
X |
X |
Statistical
Approach |
X |
X |
Value
Stocks Risk |
| X |
Blue
Chip Stocks Risk. The
Fund is subject to the risk that blue-chip company stocks will underperform
other kinds of investments for a period of time. This risk is true of any market
segment. Based on historical data, such periods of underperformance may persist
for multiple years. Large companies do not have the same growth potential
of
smaller companies and shareholders of large companies may have less overall
influence than they would in smaller companies.
Environmental,
Social, and Governance Investing Risk.
The Fund’s incorporation of ESG considerations in its investment strategy may
cause it to make different investments than funds that have a similar investment
style but do not incorporate such considerations in their strategy. As with the
use of any considerations involved in investment decisions, there is no
guarantee that the ESG investment considerations used by the Fund will result in
the selection of issuers that will outperform other issuers or help reduce risk
in the Fund. The Fund may underperform funds that do not incorporate these
considerations. The Fund’s ESG investment considerations may also affect the
Fund’s exposure to certain sectors or types of investments, which may impact the
Fund’s relative investment performance depending on the performance of issuers
in those sectors relative to issuers in the broader market. The Sub-Adviser is
dependent on available information to assist in the use of ESG investment
considerations, and, because there are few generally accepted standards to use
in such considerations, the information and considerations used for the Fund may
differ from the information and considerations used for other funds. There are
significant differences in interpretations of what it means for a company to
have good ESG characteristics, and the Fund may underperform other funds that
use different considerations and/or a different methodology in evaluating such
characteristics.
Equity
Investing Risk. An
investment in the Fund involves risks similar to those of investing in any fund
holding equity securities, such as market fluctuations, changes in interest
rates and perceived trends in stock prices. The values of equity securities
could decline generally or could underperform other investments. In addition,
securities may decline in value due to factors affecting a specific issuer,
market or securities markets generally.
ETF
Risks.
•APs,
Market Makers, and Liquidity Providers Concentration Risk.
The
Fund has a limited number of financial institutions that may act as APs. In
addition, there may be a limited number of market makers and/or liquidity
providers in the marketplace. To the extent either of the following events
occur, Shares may trade at a material discount to NAV and possibly face
delisting: (i) APs exit the business or otherwise become unable to process
creation and/or redemption orders and no other APs step forward to perform these
services, or (ii) market makers and/or liquidity providers exit the business or
significantly reduce their business activities and no other entities step
forward to perform their functions.
•Cost
of Trading Risk. Investors
buying or selling Shares in the secondary market pay brokerage commissions or
other charges imposed by brokers as determined by that broker. Brokerage
commissions are often a fixed amount and may be a significant proportional cost
for investors seeking to buy or sell relatively small amounts of Shares. In
addition, secondary market investors also incur the cost of the difference
between the price that an investor is willing to pay for Shares (the “bid”
price) and the price at which an investor is willing to sell Shares (the “ask”
price). This difference in bid and ask prices is often referred to as the
“spread” or “bid/ask spread.” The bid/ask spread varies over time for Shares
based on trading volume and market liquidity, and is generally lower if the
Fund’s Shares have more trading volume and market liquidity and higher if the
Fund’s Shares have little trading volume and market liquidity. Further,
increased market volatility may cause increased bid/ask spreads.
•Premium-Discount
Risk. The
Shares may trade above or below their NAV. The NAV of the Fund will generally
fluctuate with changes in the market value of the Fund’s holdings. The market
prices of Shares, however, will generally fluctuate in accordance with changes
in NAV as well as the relative supply of, and demand for, Shares on the Exchange
and other securities exchanges. The trading price of Shares may deviate
significantly from NAV during periods of market volatility or limited trading in
Shares. The Sub-Adviser cannot predict whether Shares will trade below, at or
above their NAV. Price differences may be due, in large part, to the fact that
supply and demand forces at work in the secondary trading market for Shares will
be closely related to, but not identical to, the same forces influencing the
prices of the securities held by the Fund. However, given that Shares can be
purchased and redeemed in large blocks of Shares, called Creation Units (unlike
shares of closed-end funds, which frequently trade at appreciable discounts
from, and sometimes at premiums to, their NAV), and the Fund’s portfolio
holdings are fully disclosed on a
daily
basis, the Adviser believes that large discounts or premiums to the NAV of
Shares should not be sustained, but that may not be the case.
•Trading
Risk. Although
the Shares are listed on the Exchange, there can be no assurance that an active
or liquid trading market for them will be maintained. In addition, trading in
Shares on the Exchange may be halted due to market conditions or for reasons
that, in the view of the Exchange, make trading in Shares inadvisable. Further,
trading in Shares on the Exchange is subject to trading halts caused by
extraordinary market volatility pursuant to the Exchange “circuit breaker”
rules, which temporarily halt trading on the Exchange when a decline in the
S&P 500 Index during a single day reaches certain thresholds (e.g., 7%, 13%
and 20%). There can be no assurance that the requirements of the Exchange
necessary to maintain the listing of the Fund will continue to be met or will
remain unchanged.
Financials
Sector Risk.
Companies in the financials sector of an economy are subject to extensive
governmental regulation and intervention, which may adversely affect the scope
of their activities, the prices they can charge, the amount of capital they must
maintain and, potentially, their size. The extent to which the Fund may invest
in a company that engages in securities-related activities or banking is limited
by applicable law. Governmental regulation may change frequently and may have
significant adverse consequences for companies in the financials sector,
including effects not intended by such regulation. Recently enacted legislation
in the U.S. has relaxed capital requirements and other regulatory burdens on
certain U.S. banks. While the effect of the legislation may benefit certain
companies in the financials sector, increased risk taking by affected banks may
also result in greater overall risk in the U.S. and global financials sector.
The impact of changes in capital requirements, or recent or future regulation in
various countries, on any individual financial company or on the financials
sector as a whole cannot be predicted.
Certain
risks may impact the value of investments in the financials sector more severely
than those of investments outside this sector, including the risks associated
with companies that operate with substantial financial leverage. Companies in
the financials sector are exposed directly to the credit risk of their borrowers
and counterparties, who may be leveraged to an unknown degree, including through
swaps and other derivatives products. Financial services companies may have
significant exposure to the same borrowers and counterparties, with the result
that a borrower’s or counterparty’s inability to meet its obligations to one
company may affect other companies with exposure to the same borrower or
counterparty. This interconnectedness of risk may result in significant negative
impacts to companies with direct exposure to the defaulting counterparty as well
as adverse cascading effects in the markets and the financials sector generally.
Companies in the financials sector may also be adversely affected by increases
in interest rates and loan losses, decreases in the availability of money or
asset valuations, credit rating downgrades and adverse conditions in other
related markets. Insurance companies, in particular, may be subject to severe
price competition and/or rate regulation, which may have an adverse impact on
their profitability. The financials sector is particularly sensitive to
fluctuations in interest rates. The financials sector is also a target for
cyberattacks, and may experience technology malfunctions and disruptions. In
recent years, cyberattacks and technology malfunctions and failures have become
increasingly frequent in this sector and have reportedly caused losses to
companies in this sector, which may negatively impact the Fund.
Focus
Investing Risk. Investing
a high percentage of the Fund’s assets in a small number of companies will
likely add to Fund volatility. It exposes the shareholder to company-specific
risk, or the risk that bankruptcy, or other negative events, related to a single
company will significantly affect total Fund return.
Fund
Cybersecurity Risk.
Cybersecurity risk applies to the Fund, its service providers and the companies
in which the Fund invests. Cybersecurity risk includes breaches, intentional or
unintended, that may impact a company’s ability to operate, and could include
data corruption, theft or loss, improper access to proprietary information, or
interference with technology operations. Companies could suffer losses due to
cybersecurity events, including fines, penalties, reputational injuries, as well
as financial losses and legal and compliance expenses. Cybersecurity risks of
the Fund include risks applicable to the Fund’s service providers. While the
Fund and its service providers have established cybersecurity defenses, there is
no guarantee that these defenses will be effective.
Geopolitical/Natural
Disaster Risks. The
value of your investment in the Fund is based on the values of the Fund’s
investments, which may change due to economic and other events that affect
markets generally, as well as those that
affect
particular regions, countries, industries, companies or governments. These
events may be sudden and unexpected and could adversely affect
the liquidity of the Fund’s investments, which may in turn impact
valuation, the Fund’s ability to sell securities and/or its ability to meet
redemptions. The risks associated with these developments may be magnified if
certain social, political, economic and other conditions and events (such
as war, natural disasters, epidemics and pandemics, terrorism, conflicts, social
unrest, recessions, inflation, rapid interest rate changes and supply chain
disruptions) adversely interrupt the global economy and financial
markets. It is difficult to predict when events affecting the U.S. or
global financial markets may occur, the effects that such events may
have and the duration of those effects (which may last for extended
periods). These events may negatively impact broad segments of businesses
and populations and have a significant and rapid negative impact on the
performance of the Fund’s investments, adversely affect and increase the
volatility of the Fund’s share price and exacerbate pre-existing risks to
the Fund.
Inflation
Risk.
Large-cap stocks have tended to recover more slowly than small-cap stocks from a
market downturn. Consequently, the Fund may expose shareholders to higher
inflation risk (the risk that the Fund’s value will not keep up with inflation)
than some other stock market segments.
Information
Technology Sector Risk. The
information technology sector includes companies engaged in internet software
and services, technology hardware and storage peripherals, electronic
equipment and components, and semiconductors and semiconductor equipment.
Information technology companies face intense competition, both
domestically and internationally, which may have an adverse effect on profit
margins. Information technology companies may have limited product lines,
markets, financial resources or personnel. The products of information
technology companies may face rapid product obsolescence due to
technological developments and frequent new product introduction, unpredictable
changes in growth rates and competition for the services of qualified
personnel. Failure to introduce new products, develop and maintain a loyal
customer base or achieve general market acceptance for their products could
have a material adverse effect on a company’s business. Companies in the
information technology sector are heavily dependent on intellectual
property and the loss of patent, copyright or trademark protections may
adversely affect the profitability of these companies.
Investment
Risk. When
you sell your Shares of the Fund, they could be worth less than what you paid
for them. The Fund could lose money due to short-term market movements and over
longer periods during market downturns. Securities may decline in value due to
factors affecting securities markets generally or particular asset classes or
industries represented in the markets. The value of a security may decline due
to general market conditions, economic trends or events that are not
specifically related to the issuer of the security or to factors that affect a
particular industry or group of industries. During a general downturn in the
securities markets, multiple asset classes may be negatively affected.
Therefore, you may lose money by investing in the Fund.
Management
Risk.
Each Fund is actively-managed and may not meet its investment objective based on
the Sub-Adviser’s success or failure to implement investment strategies for a
Fund. The Sub-Adviser’s evaluations and assumptions regarding investments may
not successfully achieve a Fund’s investment objective given actual market
trends.
Management
and Operational Risk. The
Sub-Adviser uses statistical analyses and models to select investments for the
Fund. Any imperfections, errors or limitations in the models or analyses and
therefore any decisions made in reliance on such models or analyses could expose
the Fund to potential risks. In addition, the models used by the Sub-Adviser
assume that certain historical statistical relationships will continue. These
models are constructed based on historical data supplied by third parties and,
as a result, the success of relying on such models may depend heavily on the
accuracy and reliability of the supplied historical data.
Market
Risk.
The Fund could lose value if the individual securities in which it has invested
and/or the overall stock markets on which the stocks trade decline in price.
Stocks and stock markets may experience short-term volatility (price
fluctuation) as well as extended periods of price decline or little growth.
Individual stocks are affected by many factors, including: (i) corporate
earnings; (ii) production; (iii) management; (iv) sales; and (v) market trends,
including investor demand for a particular type of stock, such as growth or
value stocks, small-or large-cap stocks, or stocks within a particular
industry.
Market
risks, including political, regulatory, market, economic and social
developments, and developments that impact specific economic sectors, industries
or segments of the market, can affect the value of the Fund’s investments. In
addition, turbulence in financial markets and reduced liquidity in the markets
may negatively affect many issuers, which could adversely affect the Fund. These
risks may be magnified if certain social, political, economic and other
conditions and events (such as natural disasters, epidemics and pandemics,
terrorism, conflicts and social unrest) adversely interrupt the global economy;
in these and other circumstances, such events or developments might affect
companies world-wide and therefore can affect the value of the Funds’
investments.
Sector
Risk. Companies
with similar characteristics may be grouped together in broad categories called
sectors. A certain sector may underperform other sectors or the market as a
whole. As the Sub-Adviser allocates more of a Fund’s portfolio holdings to a
particular sector, a Fund’s performance will be more susceptible to any
economic, business or other developments which generally affect that
sector.
Small-Cap
Company Risk. Investing
in small-cap stocks may involve greater volatility and risk than investing in
large- or mid-cap stocks because small-cap companies may have less management
experience, limited financial resources and minimal product diversification.
Therefore, securities of small-cap companies may be and have historically been
more volatile and less liquid than those of large- and mid-cap
companies.
Strategy
Risk. The
Fund utilizes its own distinct investment strategy. Investment strategies tend
to shift in and out of favor depending upon market and economic conditions as
well as investor sentiment. As such, there may be periods when the type of
stocks that the Fund’s invests in are out of favor, and the Fund’s performance
may suffer.
Statistical
Approach. The
Sub-Adviser uses a statistical approach to manage the Fund and resists
overriding the statistical models with qualitative or subjective data. However,
the Sub-Adviser will exclude stocks if the issuer of the stock is principally
engaged in the tobacco industry. The Sub-Adviser may also exclude stocks based
on certain narrow social reasons including, but not limited to, if the issuer of
the stock: (i) conducts or has direct investments in business operations in
Sudan; or (ii) is substantially engaged in the production or trade of
pornographic material. Other than companies principally engaged in the tobacco
industry, the number of companies referenced in (i) and (ii) in the
Sub-Adviser’s universe is usually “de minimis.”
Value
Stocks Risk. Over
time, a value investing style may go in and out of favor, causing the Fund to
sometimes underperform other equity funds that use different investing styles.
Value stocks can react differently to issuer, political, market and economic
developments than the market overall and other types of stocks (e.g., growth
stocks). In addition, the Fund’s value approach carries the risk that the market
will not recognize a security’s intrinsic value for a long time or that a stock
judged to be undervalued by various value measures may actually be appropriately
priced. The Fund is subject to the risk that it will underperform other kinds of
investments for a period of time, especially in a market downturn. Based on
historical data, such periods of underperformance may persist for multiple
years.
FUND
MANAGEMENT
Investment
Adviser
Empowered
Funds, LLC, dba EA Advisers, acts as the Funds’ investment adviser (the
“Adviser”). The Adviser selects the Fund’s sub-adviser and oversees the
sub-adviser’s management of the Funds. The Adviser also provides trading,
execution and various other administrative services and supervises the overall
daily affairs of the Funds. The Adviser is located at 19 East Eagle Road
Havertown, PA 19083 and is wholly-owned by Alpha Architect LLC. The Adviser is
registered with the Securities and Exchange Commission (“SEC”) under the
Investment Advisers Act of 1940 and provides investment advisory services solely
to the Funds and other exchange-traded funds. The Adviser was founded in
October 2013.
The
Adviser performs its services to the Funds pursuant to the terms of an
investment advisory agreement (the “Advisory Agreement”) between the Trust and
the Adviser. The Adviser is entitled to receive the following annual advisory
fee, which is expressed as an annual percentage rate of each Fund’s average
daily net assets:
|
|
|
|
| |
Fund |
Contractual
Rate |
EA
Bridgeway Blue Chip ETF |
0.15%
on the first $3 billion |
| 0.13%
on the next $7 billion |
| 0.12%
on the next $10 billion |
| 0.11%
on assets above $20 billion |
EA
Bridgeway Omni Small-Cap Value ETF |
0.47%
on the first $1 billion |
|
0.42%
on the next $1 billion |
|
0.40%
above $2 billion |
For
the fiscal year ended June 30, 2023, the Funds paid the Adviser the following
advisory fees:
|
|
|
|
| |
Fund |
Advisory
Fee Paid Last Fiscal Year |
EA
Bridgeway Blue Chip ETF |
$224,647* |
EA
Bridgeway Omni Small-Cap Value ETF |
$4,023,400** |
*
This fee includes advisory fees paid to the Sub-Adviser prior to the
Reorganization on October 17, 2022.
**
This fee includes advisory fees paid to the Sub-Adviser prior to the
Reorganization on March 13, 2023.
The
Adviser (or an affiliate of the Adviser) bears all of the Adviser’s own costs
associated with providing these advisory services and all expenses of the Funds,
except for the fee payment under each Fund’s Advisory Agreement, payments under
each Fund’s Rule 12b-1 Distribution and Service Plan (the “Plan”),
brokerage expenses, acquired fund fees and expenses, taxes (including
tax-related services), interest (including borrowing costs), litigation expenses
(including class action-related services) and other non-routine or extraordinary
expenses.
The
Advisory Agreement for each Fund provides that it may be terminated at any time,
without the payment of any penalty, by the Trust’s board of Trustees (the
“Board”) or, with respect to a Fund, by a majority of the outstanding shares of
the Fund, on 60 days’ written notice to the Adviser, and by the Adviser upon 60
days’ written notice, and that it shall be automatically terminated if it is
assigned.
Investment
Sub-Adviser
The
Adviser has retained Bridgeway Capital Management, LLC (the “Sub-Adviser”), an
investment adviser registered with the SEC, to provide sub-advisory services to
each Fund. The Sub-Adviser, which was founded in 1993, is organized as a
Delaware limited liability company with its principal offices located at 20
Greenway Plaza, Suite 450, Houston, Texas 77046. As of June 30, 2023, the
Sub-Adviser had approximately $3.9 billion in total assets under management.
Committed to community impact, the Sub-Adviser donates at least 50% of its
profits to non-profit organizations.
The
Sub-Adviser is responsible for selecting each Fund’s investments in accordance
with each Fund’s investment objectives, policies and restrictions. The
Sub-Adviser is not responsible for selecting broker-dealers or placing each
Fund’s trades. Rather, the Sub-Adviser constructs the overall portfolio and
provides trading instructions to the Adviser and, in turn, the Adviser is
responsible for selecting broker-dealers and placing each Fund’s
trades.
Pursuant
to a sub-advisory agreement for each Fund (the “Sub-Advisory Agreement”), the
Adviser pays the Sub-Adviser a fee, which is calculated daily and paid monthly,
at an annual rate of 0.05% based on the EA Bridgeway Blue Chip ETF’s average
daily net assets and 0.35% based on the EA Bridgeway Omni Small-Cap Value ETF’s
average daily net assets.
Fund
Sponsor
The
Adviser has entered into a fund sponsorship agreement with the Sub-Adviser
pursuant to which the Sub-Adviser is also the sponsor of each Fund (“Fund
Sponsor”). Under this arrangement, the Fund Sponsor has agreed to provide
financial support to each Fund (as described below) and, in turn, the Adviser
has agreed to share with the Fund
Sponsor
a portion of profits, if any, generated by each Fund’s Advisory Fee (also as
described below). Every month, the Advisory Fee, which is a unitary management
fee, is calculated and paid to the Adviser.
If
the amount of the unitary management fee exceeds each Fund’s operating expenses
and the Adviser-retained amount, the Adviser pays the net total to the Fund
Sponsor. The amount paid to the Fund Sponsor represents both the sub-advisory
fee and any remaining profits from the Advisory Fee. During months where there
are no profits or the funds are not sufficient to cover the entire sub-advisory
fee, the sub-advisory fee is automatically waived.
If
the amount of the unitary management fee is less than each Fund’s operating
expenses and the Adviser-retained amount, Fund Sponsor is obligated to reimburse
the Adviser for the shortfall.
APPROVAL
OF
ADVISORY
AGREEMENTS
A
discussion regarding the basis for the Board’s approval of the Advisory
Agreement and the Sub-Advisory Agreement with respect to the EA Bridgeway Omni
Small-Cap Value ETF was made available in the Fund’s annual report
to shareholders for the period ended June 30, 2023. As it relates to EA
Bridgeway Blue Chip ETF, a discussion regarding the basis for the Board’s
approval of the Advisory Agreement and the Sub-Advisory Agreement was made
available in the Fund’s semi-annual
report to shareholders for the period ended December 31, 2022.
Manager
of Managers Structure
The
Adviser and the Trust have received an exemptive order (the “Order”) from the
SEC that allows each Fund to operate in a “manager of managers” structure
whereby the Adviser can appoint and replace unaffiliated sub-advisers, and enter
into, amend and terminate sub-advisory agreements with such sub-advisers, each
subject to Board approval, but without obtaining prior shareholder approval
(“Manager of Managers Structure”). Each Fund will, however, inform shareholders
of the hiring of any new sub-adviser within 90 days after the hiring. The Order
provides each Fund with greater flexibility and efficiency by preventing the
Fund from incurring the expense and delays associated with obtaining shareholder
approval of such sub-advisory agreements.
The
use of the Manager of Managers Structure with respect to each Fund is subject to
certain conditions that are set forth in the Order. Under the Manager of
Managers Structure, the Adviser has the ultimate responsibility, subject to
oversight by the Board, to oversee sub-advisers and recommend their hiring,
termination and replacement. The Adviser will also, subject to the review and
approval of the Board; set each Fund’s overall investment strategy; evaluate,
select and recommend sub-advisers to manage all or a portion of each Fund’s
assets; and implement procedures reasonably designed to ensure that each
sub-adviser complies with each Fund’s investment goal, policies and
restrictions. Subject to review by the Board, the Adviser will allocate and,
when appropriate, reallocate each Fund’s assets among sub-advisers and monitor
and evaluate the sub-advisers’ performance.
PORTFOLIO
MANAGERS
The
portfolio managers are jointly and primarily responsible for various functions
related to portfolio management, including, but not limited to, making
recommendations (or implementing) with respect to the following: investing cash
inflows, implementing investment strategy, researching and reviewing investment
strategy, and overseeing members of the portfolio management team with more
limited responsibilities.
John
Montgomery has been part of the Sub-Adviser portfolio management team since 2022
(and a portfolio manager of each Fund’s Predecessor Mutual Fund since their
inception). He is President, Chief Executive Officer, Co-Chief Investment
Officer and Portfolio Manager of the Sub-Adviser. Mr. Montgomery founded the
Sub-Adviser in 1993 and has worked there since its inception. He holds a BS in
Engineering and a BA in Philosophy from Swarthmore College and graduate degrees
from MIT and Harvard Business School.
Elena
Khoziaeva, CFA, has been part of the Sub-Adviser portfolio management team of
the Funds since 2022 (and a co-portfolio manager of each Fund’s Predecessor
Mutual Fund). Ms. Khoziaeva is a Co-Chief Investment Officer, Head of US Equity
and Portfolio Manager of the Sub-Adviser. She began working at the Sub-Adviser
in 1998. Her responsibilities include portfolio management, investment research,
and statistical modeling. Elena earned a
Bachelor
of Economic Sciences degree from Belarussian State Economic University in Minsk
and graduated with highest honors from the University of Houston with an MBA in
accounting.
Michael
Whipple, CFA, FRM, has been part of the Sub-Adviser portfolio management team of
the Fund since 2022 (and a co-portfolio manager of each Fund’s Predecessor
Mutual Fund). Mr. Whipple is a Portfolio Manager and began working at the
Adviser in 2002. His responsibilities include portfolio management, investment
research, and statistical modeling. He holds a BS in Accountancy and Finance
from Miami University in Ohio. Michael worked in public accounting with a focus
in auditing from 1993 to 2000 before attending the University of Chicago Booth
School of Business from 2000 to 2002, where he earned his MBA.
Christine
L. Wang, CFA, CPA, has been part of the Sub-Adviser portfolio management team of
the Fund since 2022 (and a co-portfolio manager of each Fund’s Predecessor
Mutual Fund since its inception). Ms. Wang is a Portfolio Manager and began
working at the Sub-Adviser in 2008. Her responsibilities include portfolio
management, investment research, and statistical modeling. Christine holds an MS
in Accounting from the University of Virginia and a BA in Sociology and
Managerial Studies from Rice University. Christine is a Certified Public
Accountant licensed in the state of Texas. Prior to joining the Adviser,
Christine worked for a public accounting firm with a focus on energy trading and
risk management from 2004 to 2008.
The
Funds’ SAI provides additional information about the portfolio managers,
including other accounts each manages, their ownership in the Funds, and
compensation.
OTHER
SERVICE
PROVIDERS
Quasar
Distributors, LLC (“Distributor”) serves as the distributor of Creation Units
(defined above) for the Funds on an agency basis. The Distributor does not
maintain a secondary market in Shares.
U.S.
Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services, is
the administrator, fund accountant, and transfer agent for the
Funds.
U.S.
Bank National Association is the custodian for the Funds.
Practus,
LLP, 11300 Tomahawk Creek Parkway, Suite 310, Leawood, Kansas 66211, serves as
legal counsel to the Trust.
Tait,
Weller & Baker LLP, 50 South 16th Street,
Suite 2900, Philadelphia, PA 19102,
serves as the Funds’ independent registered public accounting firm. The
independent registered public accounting firm is responsible for auditing the
annual financial statements of the Funds.
THE
EXCHANGE
Shares
of the Funds are not sponsored, endorsed or promoted by the Exchanges: NYSE
Arca, Inc. (EA Bridgeway Blue Chip ETF), and The Nasdaq Stock Market (EA
Bridgeway Omni Small-Cap Value ETF). Neither Exchange is responsible for, nor
has it participated, in the determination of the timing of, prices of, or
quantities of Shares of a Fund to be issued, nor in the determination or
calculation of the equation by which the Shares are redeemable. Neither Exchange
has any obligation or liability to owners of the Shares of a Fund in connection
with the administration, marketing or trading of the Shares of a Fund. Without
limiting any of the foregoing, in no event shall an Exchange have any liability
for any direct, indirect, special, punitive, consequential or any other damages
(including lost profits) even if notified of the possibility of such
damages.
BUYING
AND SELLING FUND SHARES
Shares
will be issued or redeemed by each Fund at NAV per Share only in Creation Units
of 25,000 Shares. Creation Units are generally issued and redeemed only in-kind
for securities although a portion may be in cash.
Shares
will trade on the secondary market, however, which is where most retail
investors will buy and sell Shares. It is expected that only a limited number of
institutional investors, called Authorized Participants or “APs,” will
purchase
and redeem Shares directly from the Funds. APs may acquire Shares directly from
the Funds, and APs may tender their Shares for redemption directly to the Funds,
at NAV per Share only in large blocks, or Creation Units. Purchases and
redemptions directly with the Funds must follow the Funds’ procedures, which are
described in the SAI.
Except
when aggregated in Creation Units, Shares are not redeemable with the Funds.
BUYING
AND
SELLING
SHARES
ON THE
SECONDARY
MARKET
Most
investors will buy and sell Shares in secondary market transactions through
brokers and, therefore, must have a brokerage account to buy and sell Shares.
Shares can be bought or sold through your broker throughout the trading day like
shares of any publicly traded issuer. The Trust does not impose any redemption
fees or restrictions on redemptions of Shares in the secondary market. When
buying or selling Shares through a broker, you will incur customary brokerage
commissions and charges, and you may pay some or all of the spread between the
bid and the offered prices in the secondary market for Shares. The price at
which you buy or sell Shares (i.e.,
the market price) may be more or less than the NAV of the Shares. Unless imposed
by your broker, there is no minimum dollar amount you must invest in a Fund and
no minimum number of Shares you must buy.
Shares
of each of Fund will be listed on its Exchange under the following
symbols:
|
|
|
|
| |
Fund |
Trading Symbol |
EA
Bridgeway Blue Chip ETF |
BBLU |
EA
Bridgeway Omni Small-Cap Value ETF |
BSVO |
The
Exchanges are generally open Monday through Friday and is closed for weekends
and the following holidays: New Year’s Day, Martin Luther King, Jr. Day,
Washington’s Birthday, Good Friday, Memorial Day, Juneteenth Independence Day,
Independence Day, Labor Day, Thanksgiving Day, and Christmas Day.
For
information about buying and selling Shares on an Exchange or in the secondary
markets, please contact your broker or dealer.
Book
Entry. Shares
are held in book entry form, which means that no stock certificates are issued.
The Depository Trust Company (“DTC”), or its nominee, will be the registered
owner of all outstanding Shares of the Funds and is recognized as the owner of
all Shares. Participants in DTC include securities brokers and dealers, banks,
trust companies, clearing corporations and other institutions that directly or
indirectly maintain a custodial relationship with DTC. As a beneficial owner of
Shares, you are not entitled to receive physical delivery of stock certificates
or to have Shares registered in your name, and you are not considered a
registered owner of Shares. Therefore, to exercise any right as an owner of
Shares, you must rely on the procedures of DTC and its participants. These
procedures are the same as those that apply to any stocks that you hold in book
entry or “street name” through your brokerage account. Your account information
will be maintained by your broker, which will provide you with account
statements, confirmations of your purchases and sales of Shares, and tax
information. Your broker also will be responsible for distributing income
dividends and capital gain distributions and for ensuring that you receive
shareholder reports and other communications from the Funds.
Share
Trading Prices. The
trading prices of a Fund’s Shares may differ from the Fund’s daily NAV and can
be affected by market forces of supply and demand for the Fund’s Shares, the
prices of the Fund’s portfolio securities, economic conditions and other
factors.
The
Exchange through the facilities of the Consolidated Tape Association or another
market information provider intends to disseminate the approximate value of each
Fund’s portfolio every fifteen seconds during regular U.S. trading hours. This
approximate value should not be viewed as a “real-time” update of the NAV of a
Fund because the approximate value may not be calculated in the same manner as
the NAV, which is computed once a day. The quotations for certain investments
may not be updated during U.S. trading hours if such holdings do not trade in
the U.S., except such quotations may be updated to reflect currency
fluctuations. The Funds are not involved in, or
responsible
for, the calculation or dissemination of the approximate values and make no
warranty as to the accuracy of these values.
Continuous
Offering. The
method by which Creation Units of Shares are created and traded may raise
certain issues under applicable securities laws. Because new Creation Units of
Shares are issued and sold by a Fund on an ongoing basis, a “distribution,” as
such term is used in the Securities Act, may occur at any point. Broker-dealers
and other persons are cautioned that some activities on their part may,
depending on the circumstances, result in their being deemed participants in a
distribution in a manner which could render them statutory underwriters and
subject them to the prospectus delivery requirements and liability provisions of
the Securities Act. For example, a broker-dealer firm or its client may be
deemed a statutory underwriter if it takes Creation Units after placing an order
with the Distributor, breaks them down into constituent Shares and sells the
Shares directly to customers or if it chooses to couple the creation of a supply
of new Shares with an active selling effort involving solicitation of secondary
market demand for Shares. A determination of whether one is an underwriter for
purposes of the Securities Act must take into account all the facts and
circumstances pertaining to the activities of the broker-dealer or its client in
the particular case, and the examples mentioned above should not be considered a
complete description of all the activities that could lead to a characterization
as an underwriter.
Broker-dealer
firms should also note that dealers who are not “underwriters” but are effecting
transactions in Shares, whether or not participating in the distribution of
Shares, are generally required to deliver a prospectus. This is because the
prospectus delivery exemption in Section 4(a)(3) of the Securities Act is
not available in respect of such transactions as a result of Section 24(d)
of the Investment Company Act of 1940, as amended (the “Investment Company
Act”). As a result, broker-dealer firms should note that dealers who are not
“underwriters” but are participating in a distribution (as contrasted with
engaging in ordinary secondary market transactions) and thus dealing with the
Shares that are part of an overallotment within the meaning of Section
4(a)(3)(C) of the Securities Act, will be unable to take advantage of the
prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act.
For delivery of prospectuses to exchange members, the prospectus delivery
mechanism of Rule 153 under the Securities Act is only available with respect to
transactions on a national exchange.
ACTIVE
INVESTORS
AND
MARKET
TIMING
The
Board has evaluated the risks of market timing activities by the Funds’
shareholders. The Board noted that the Funds’ Shares can be purchased and
redeemed directly from a Fund only in Creation Units by APs and that the vast
majority of trading in the Funds’ Shares occurs on the secondary market. Because
the secondary market trades do not directly involve the Funds, it is unlikely
those trades would cause the harmful effects of market timing, including
dilution, disruption of portfolio management, increases in the Funds’ trading
costs and the realization of capital gains. With regard to the purchase or
redemption of Creation Units directly with a Fund, to the extent effected
in-kind (i.e., for securities), the Board noted that those trades do not cause
the harmful effects (as previously noted) that may result from frequent cash
trades. To the extent trades are effected in whole or in part in cash, the Board
noted that those trades could result in dilution to a Fund and increased
transaction costs, which could negatively impact a Fund’s ability to achieve its
investment objective, although in certain circumstances (e.g., in conjunction
with a rebalance of a Fund’s underlying index), such trades may benefit Fund
shareholders by increasing the tax efficiency of a Fund. The Board also noted
that direct trading by APs is critical to ensuring that a Fund’s Shares trade at
or close to NAV. In addition, the Funds may impose transaction fees on purchases
and redemptions of Shares to cover the custodial and other costs incurred by a
Fund in effecting trades. Given this structure, the Board determined that it is
not necessary to adopt policies and procedures to detect and deter market timing
of the Funds’ Shares.
DISTRIBUTION
AND
SERVICE
PLAN
Each
Fund has adopted the Plan pursuant to Rule 12b-1 under the Investment Company
Act. Under the Plan, a Fund may be authorized to pay distribution fees of up to
0.25% of its average daily net assets each year to the Distributor and other
firms that provide distribution and shareholder services (“Service Providers”).
As of the date of this Prospectus, the maximum amount payable under the Plan is
set at 0% until further action by the Board. In the event 12b-1 fees are
charged, over time they would increase the cost of an investment in a Fund
because they would be paid on an ongoing basis.
NET
ASSET
VALUE
The
NAV of Shares is calculated each business day as of the close of regular trading
on the New York Stock Exchange (“NYSE”), generally 4:00 p.m., Eastern
time.
Each
Fund calculates its NAV per Share by:
•Taking
the current market value of its total assets,
•Subtracting
any liabilities, and
•Dividing
that amount by the total number of Shares owned by shareholders.
If
you buy or sell Shares on the secondary market, you will pay or receive the
market price, which may be higher or lower than NAV. Your transaction will be
priced at NAV only if you purchase or redeem your Shares in Creation
Units.
Equity
securities that are traded on a national securities exchange, except those
listed on the NASDAQ Global Market®
(“NASDAQ”) are valued at the last reported sale price on the exchange on which
the security is principally traded. Securities traded on NASDAQ will be valued
at the NASDAQ Official Closing Price (“NOCP”). If, on a particular day, an
exchange-traded or NASDAQ security does not trade, then the most recent quoted
bid for exchange traded or the mean between the most recent quoted bid and ask
price for NASDAQ securities will be used. Equity securities that are not traded
on a listed exchange are generally valued at the last sale price in the
over-the-counter market. If a nonexchange traded security does not trade on a
particular day, then the mean between the last quoted closing bid and asked
price will be used.
Redeemable
securities issued by open-end investment companies are valued at the investment
company’s applicable net asset value, with the exception of exchange-traded
open-end investment companies which are priced as equity
securities.
If
a market price is not readily available or is deemed not to reflect market
value, the relevant Fund will determine the price of the security held by it
based on a determination of the security’s fair value pursuant to policies and
procedures approved by the Board.
To
the extent a Fund holds securities that may trade infrequently, fair valuation
may be used more frequently.
Fair valuation may have the effect of reducing stale pricing arbitrage
opportunities presented by the pricing of Shares. However, when a Fund uses fair
valuation to price securities, it may value those securities higher or lower
than another fund would have priced the security. Also, the use of fair
valuation may cause the Shares’ NAV performance to diverge from the Shares’
market price and from the performance of various benchmarks used to compare a
Fund’s performance because benchmarks generally do not use fair valuation
techniques. Because of the judgment involved in fair valuation decisions, there
can be no assurance that the value ascribed to a particular security is
accurate.
FUND
WEBSITE
AND
DISCLOSURE
OF
PORTFOLIO
HOLDINGS
The
Trust maintains a website for the Funds at www.bridgewayetfs.com.
Among other things, the website includes this Prospectus and the SAI, and the
Funds’ holdings, the Funds’ last annual
and semi-annual
reports. The website shows the Funds’ daily NAV per share, market price, and
premium or discount, each as of the prior business day. The website also shows
the extent and frequency of the Funds’ premiums and discounts. Further, the
website includes the Funds’ median bid-ask spread over the most recent thirty
calendar days.
Each
day a Fund is open for business, the Trust publicly disseminates each Fund’s
full portfolio holdings as of the close of the previous day through its website
at www.bridgewayetfs.com.
A description of the Trust’s policies and procedures with respect to the
disclosure of the Funds’ portfolio holdings is available in the Funds’
SAI.
INVESTMENTS
BY
OTHER
INVESTMENT
COMPANIES
For
purposes of the Investment Company Act, Shares are issued by a registered
investment company and purchases of such Shares by registered investment
companies and companies relying on Section 3(c)(1) or 3(c)(7) of the
Investment Company Act are subject to the restrictions set forth in
Section 12(d)(1) of the Investment Company Act, except as permitted by
Rule 6c-11, Rule 12d1-4, or an exemptive order of the
SEC.
DIVIDENDS,
DISTRIBUTIONS,
AND
TAXES
As
with any investment, you should consider how your investment in Shares will be
taxed. The tax information in this Prospectus is provided as general
information. You should consult your own tax professional about the tax
consequences of an investment in Shares.
Unless
your investment in Shares is made through a tax-exempt entity or tax-deferred
retirement account, such as an IRA plan, you need to be aware of the possible
tax consequences when:
•Your
Fund makes distributions,
•You
sell your Shares listed on the Exchange, and
•You
purchase or redeem Creation Units.
Dividends
and Distributions
Dividends
and Distributions.
Each Fund has elected and intends to qualify each year as a regulated investment
company under the Internal Revenue Code of 1986, as amended. As regulated
investment companies, each Fund generally pays no federal income tax on the
income and gains it distributes to you. Each Fund expects to declare and to
distribute its net investment income, if any, to shareholders as dividends
annually. Each Fund will distribute net realized capital gains, if any, at least
annually. Each Fund may distribute such income dividends and capital gains more
frequently, if necessary, in order to reduce or eliminate federal excise or
income taxes on the relevant Fund. The amount of any distribution will vary, and
there is no guarantee a Fund will pay either an income dividend or a capital
gains distribution. Distributions may be reinvested automatically in additional
whole Shares only if the broker through whom you purchased Shares makes such
option available.
Avoid
“Buying a Dividend.”
At the time you purchase Shares of a Fund, the Fund’s NAV may reflect
undistributed income, undistributed capital gains, or net unrealized
appreciation in value of portfolio securities held by the Fund. For taxable
investors, a subsequent distribution to you of such amounts, although
constituting a return of your investment, would be taxable. Buying Shares in a
Fund just before it declares an income dividend or capital gains distribution is
sometimes known as “buying a dividend.”
Taxes
Tax
Considerations.
Each Fund expects, based on its investment objective and strategies, that its
distributions, if any, will be taxable as ordinary income, capital gain, or some
combination of both. This is true whether you reinvest your distributions in
additional Shares or receive them in cash. For federal income tax purposes, Fund
distributions of short-term capital gains are taxable to you as ordinary income.
Fund distributions of long-term capital gains are taxable to you as long-term
capital gain no matter how long you have owned your Shares. A portion of income
dividends reported by each Fund may be qualified dividend income eligible for
taxation by individual shareholders at long-term capital gain rates provided
certain holding period requirements are met.
Taxes
on Sales of Shares.
A sale or exchange of Shares is a taxable event and, accordingly, a capital gain
or loss will generally be recognized. Currently, any capital gain or loss
realized upon a sale of Shares generally is treated as long-term capital gain or
loss if the Shares have been held for more than one year and as short-term
capital gain or loss if the Shares have been held for one year or less. The
ability to deduct capital losses may be limited.
Medicare
Tax.
An additional 3.8% Medicare tax is imposed on certain net investment income
(including ordinary dividends and capital gain distributions received from a
Fund and net gains from redemptions or other taxable dispositions of Shares) of
U.S. individuals, estates and trusts to the extent that such person’s “modified
adjusted gross income” (in the case of an individual) or “adjusted gross income”
(in the case of an estate or trust) exceeds a threshold amount. This Medicare
tax, if applicable, is reported by you on, and paid with, your federal income
tax return.
Backup
Withholding.
By law, if you do not provide the Funds with your proper taxpayer identification
number and certain required certifications, you may be subject to backup
withholding on any distributions of income, capital gains or proceeds from the
sale of your Shares. The Funds also must withhold if the Internal Revenue
Service (“IRS”) instructs it to do so. When withholding is required, the amount
will be 24% of any distributions or proceeds paid.
State
and Local Taxes.
Fund distributions and gains from the sale or exchange of your Shares generally
are subject to state and local taxes.
Taxes
on Purchase and Redemption of Creation Units.
An AP who exchanges equity securities for Creation Units generally will
recognize a gain or a loss. The gain or loss will be equal to the difference
between the market value of the Creation Units at the time of purchase and the
exchanger’s aggregate basis in the securities surrendered and the cash amount
paid. A person who exchanges Creation Units for equity securities generally will
recognize a gain or loss equal to the difference between the exchanger’s basis
in the Creation Units and the aggregate market value of the securities received
and the cash amount received. The IRS, however, may assert that a loss realized
upon an exchange of securities for Creation Units cannot be deducted currently
under the rules governing “wash sales,” or on the basis that there has been no
significant change in economic position. Persons exchanging securities should
consult their own tax advisor with respect to whether the wash sale rules apply
and when a loss might be deductible.
Under
current federal tax laws, any capital gain or loss realized upon redemption of
Creation Units is generally treated as long-term capital gain or loss if the
Shares have been held for more than one year and as a short-term capital gain or
loss if the Shares have been held for one year or less.
If
a Fund redeems Creation Units in cash, it may recognize more capital gains than
it will if it redeems Creation Units in-kind.
Foreign
Tax Credits.
If a Fund qualifies to pass through to you the tax benefits from foreign taxes
it pays on its investments, and elects to do so, then any foreign taxes it pays
on these investments may be passed through to you as a foreign tax
credit.
Non-U.S.
Investors.
Non-U.S. investors may be subject to U.S. withholding tax at a 30% or lower
treaty rate and U.S. estate tax and are subject to special U.S. tax
certification requirements to avoid backup withholding and claim any treaty
benefits. Exemptions from U.S. withholding tax is provided for (i) capital gain
dividends paid by the ETF from long-term capital gains, if any, (ii)
interest-related dividends paid by the ETF from its qualified net interest
income from U.S. sources, if any, and (iii) short-term capital gain dividends,
if any. However, notwithstanding such exemptions from U.S. withholding at the
source, any such dividends and distributions of income and capital gains will be
subject to backup withholding at a rate of 24% if you fail to properly certify
that you are not a U.S. person.
Other
Reporting and Withholding Requirements.
Under the Foreign Account Tax Compliance Act (FATCA), a Fund will be required to
withhold a 30% tax on (a) income dividends paid by the Fund, and (b) certain
capital gain distributions paid by the Fund, to certain foreign entities,
referred to as foreign financial institutions or non-financial foreign entities,
that fail to comply (or be deemed compliant) with extensive reporting and
withholding requirements designed to inform the U.S. Department of the Treasury
of U.S.-owned foreign investment accounts. The Fund may disclose the information
that it receives from its shareholders to the IRS, non-U.S. taxing authorities
or other parties as necessary to comply with FATCA. Withholding also may be
required if a foreign entity that is a shareholder of the Fund fails to provide
the Fund with appropriate certifications or other documentation concerning its
status under FATCA.
Possible
Tax Law Changes.
At the time that this prospectus is being prepared, various administrative and
legislative changes to the federal tax laws are under consideration, but it is
not possible at this time to determine whether any of these changes will be made
or what the changes might entail.
This
discussion of “Dividends, Distributions and Taxes” is not intended or written to
be used as tax advice. Because everyone’s tax situation is unique, you should
consult your tax professional about federal, state, local or foreign tax
consequences before making an investment in a Fund.
FINANCIAL
HIGHLIGHTS
The
financial highlights tables are intended to help you understand each Fund’s
financial performance for the past five years. The information for the fiscal
year ended June 30, 2023 has been derived from the Funds financial statements
audited by Tait, Weller & Baker LLP, an independent registered public
accounting firm, whose report, along with the Funds’ financial statements, is
included in the Funds’ Annual Report, which is available upon request. Each Fund
has adopted the performance history of its respective Predecessor Mutual Fund,
each of which was operated as a mutual fund. Each Predecessor Mutual Fund’s
financial information shown below is for the periods prior to its conversion
into an exchange traded fund as part of a Reorganization. The total returns
represent the rate that an investor would have earned or lost on an investment
in the Predecessor Mutual Fund assuming reinvestment of all dividends and
distributions. The information, prior to June 30, 2023, in the tables was
audited by each Predecessor Mutual Fund’s independent registered public
accounting firm, whose reports, along with each Predecessor Mutual Fund’s
financial statements, is included in each Predecessor Mutual Fund’s annual
report, which is available by calling (215) 882-9983.
(for
a share outstanding throughout each year indicated)
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| Net
Asset Value, Beginning of Year |
|
Net
Investment Income (Loss)(1) |
| Net
Realized and Unrealized Gain (Loss) on Investments |
| Net
Increase (Decrease) in Net Asset Value Resulting from Operations |
| Distributions
from Net Investment Income |
| Distributions
from Net Realized Gain |
| Total
Distributions |
| Net
Asset Value, End of Year |
|
Total
Return(2) |
| Net
Assets, End of Year (000's) |
|
Net
Expenses(3) |
|
Gross
Expenses(3) |
|
Net
Investment Income (Loss)(3) |
|
Portfolio
Turnover Rate(5)(6) |
EA
Bridgeway Blue Chip ETF |
Year
Ended June 30, 2023(7) |
$12.15 |
| 0.20 |
| 1.84 |
| 2.04 |
| 0.26 |
| (4.09) |
| (4.35) |
| $9.84 |
| 24.50% |
| $124,265 |
| 0.15% |
| 0.22% |
| 1.90% |
| 12% |
Year
Ended June 30, 2022 |
$15.84 |
| 0.27 |
| (1.34) |
| (1.07) |
| (0.30) |
| (2.32) |
| (2.62) |
| $12.15 |
| (9.32%) |
| $326,240 |
| 0.15% |
| 0.23% |
| 1.81% |
| 24% |
Year
Ended June 30, 2021 |
$13.96 |
| 0.31 |
| 4.73 |
| 5.04 |
| (0.35) |
| (2.81) |
| (3.16) |
| $15.84 |
| 39.75% |
| $432,186 |
| 0.15% |
| 0.24% |
| 2.07% |
| 7% |
Year
Ended June 30, 2020 |
$14.99 |
| 0.33 |
| 0.28 |
| 0.61 |
| (0.32) |
| (1.32) |
| (1.64) |
| $13.96 |
| 3.49% |
| $477,400 |
| 0.15% |
| 0.27% |
| 2.28% |
| 15% |
Year
Ended June 30, 2019 |
$14.62 |
| 0.34 |
| 1.75 |
| 2.09 |
| (0.31) |
| (1.41) |
| (1.72) |
| $14.99 |
| 16.26% |
| $505,029 |
| 0.15% |
| 0.25% |
| 2.28% |
| 20% |
EA
Bridgeway Omni Small-Cap Value ETF |
Year
Ended June 30, 2023(8) |
$19.42 |
| 0.37 |
| 0.53 |
| 0.90 |
| (0.45) |
| (2.05) |
| (2.50) |
| $17.82 |
| 4.41% |
| $785,111 |
| 0.47% |
| 0.62% |
| 1.93% |
| 45% |
Year
Ended June 30, 2022 |
$20.89 |
| 0.27 |
| (1.54) |
| (1.27) |
| (0.20) |
| — |
| (0.20) |
| $19.42 |
| (6.17%) |
| $814,555 |
| 0.47% |
| 0.67% |
| 1.26% |
| 30% |
Year
Ended June 30, 2021 |
$10.92 |
| 0.19 |
| 9.95 |
| 10.14 |
| (0.17) |
| — |
| (0.17) |
| $20.89 |
| 93.49% |
| $853,248 |
| 0.47% |
| 0.69% |
| 1.18% |
| 26% |
Year
Ended June 30, 2020 |
$14.43 |
| 0.19 |
| (3.63) |
| (3.44) |
| (0.07) |
| — |
| (0.07) |
| $10.92 |
| (23.98%) |
| $427,515 |
| 0.55%(4) |
| 0.74%(4) |
| 1.40% |
| 63% |
Year
Ended June 30, 2019 |
$19.10 |
| 0.20 |
| (3.42) |
| (3.22) |
| (0.20) |
| (1.25) |
| (1.45) |
| $14.43 |
| (16.49%) |
| $608,368 |
| 0.60% |
| 0.72% |
| 1.18% |
| 42% |
(1)Net
investment income per share represents net investment income divided by the
daily average shares of beneficial interest outstanding throughout the
period.
(2)All
returns reflect reinvested dividends, if any, but do not reflect the impact of
taxes. Total return for a period of less than one year is not annualized. Total
return would have been lower had various fees not been waived during the
year.
(3)Net
expenses include effects of any reimbursement or recoupment.
(4)Includes
interest expense of 0.01%.
(5)Portfolio
turnover is not annualized and is calculated without regard to short-term
securities having a maturity of less than one year.
(6)Excludes
the impact of in-kind transactions.
(7)EA
Bridgeway Blue Chip ETF (the “Fund”) acquired all of the assets and liabilities
of the Bridgeway Blue Chip Fund (“Predecessor Fund”) in a reorganization on
October 17, 2022. Market price returns are calculated using the official closing
price of the Fund on the listing exchange as of the time that the Fund’s NAV is
calculated. Prior to the Fund’s listing on October 17, 2022, the NAV performance
of the Class N Shares of the Predecessor Fund are used as proxy market price
returns.
(8)EA
Bridgeway Omni Small-Cap Value ETF (the “Fund”) acquired all of the assets and
liabilities of the Bridgeway Omni Tax Managed Small-Cap Value Fund (“Predecessor
Fund”) in a reorganization on March 13, 2023. Market price returns are
calculated using the official closing price listing exchange as of the time that
the Fund's NAV of the Fund on the is calculated. Prior to the Fund's listing on
March 13, 2023, the NAV performance of the Class N Shares of the Predecessor
Fund are used as proxy market price returns.
ANNUAL/SEMI-ANNUAL
REPORTS
TO
SHAREHOLDERS
Additional
information about each Fund is available in its annual
and semi-annual
reports to shareholders. In the annual report, you will find a discussion of the
market conditions and investment strategies that affected each Fund’s
performance.
STATEMENT
OF ADDITIONAL
INFORMATION
The
SAI dated October 31, 2023, which contains more details about the Funds, is
incorporated by reference in its entirety into this Prospectus, which means that
it is legally part of this Prospectus.
To
receive a free copy of the latest annual or semi-annual report, when available,
or the SAI, or to request additional information about the Funds, please contact
us as follows:
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Call: |
(215)
882-9983 |
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Write: |
19
East Eagle Road
Havertown,
PA 19083 |
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Visit: |
www.bridgewayetfs.com |
PAPER
COPIES
Please
note that paper copies of the Funds’ shareholder reports will generally not be
sent, unless you specifically request paper copies of the Funds’ reports from
your financial intermediary, such as a broker-dealer or bank. Instead, the
reports will be made available on the Funds’ website, and you will be notified
by mail each time a report is posted and provided with a website link to access
the report.
You
may elect to receive all future Fund reports in paper free of charge. Please
contact your financial intermediary to inform them that you wish to continue
receiving paper copies of Fund shareholder reports and for details about whether
your election to receive reports in paper will apply to all funds held with your
financial intermediary.
INFORMATION
PROVIDED
BY THE
SECURITIES
AND
EXCHANGE
COMMISSION
Information
about the Funds, including its reports and the SAI, has been filed with the SEC.
It can be reviewed on the EDGAR database on the SEC’s internet site
(http://www.sec.gov). You can also request copies of these materials, upon
payment of a duplicating fee, by electronic request at the SEC’s e-mail address
([email protected]) or by calling the SEC at (202) 551-8090.
Investment
Company Act File No. 811-22961