# EDGAR Filing Document

**Accession Number:** 0001532206
**File Stem:** 0001580642-26-003364
**Filing Date:** 2026-5
**Character Count:** 372239
**Document Hash:** 8d1fba8f46863b23a83d9bc35b558b75
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001580642-26-003364.hdr.sgml**: 20260529

**ACCESSION NUMBER**: 0001580642-26-003364

**CONFORMED SUBMISSION TYPE**: 485BPOS

**PUBLIC DOCUMENT COUNT**: 33

**FILED AS OF DATE**: 20260529

**DATE AS OF CHANGE**: 20260529

**EFFECTIVENESS DATE**: 20260601

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Arrow ETF Trust
- **CENTRAL INDEX KEY:** 0001532206

**ORGANIZATION NAME:**
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-22624
- **FILM NUMBER:** 261044353

**BUSINESS ADDRESS:**
- **STREET 1:** 17605 WRIGHT STREET
- **CITY:** OMAHA
- **STATE:** NE
- **ZIP:** 68130
- **BUSINESS PHONE:** 631-470-2600

**MAIL ADDRESS:**
- **STREET 1:** 17605 WRIGHT STREET
- **CITY:** OMAHA
- **STATE:** NE
- **ZIP:** 68130

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Northern Lights ETF Trust
- **DATE OF NAME CHANGE:** 20111007
**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Arrow ETF Trust
- **CENTRAL INDEX KEY:** 0001532206

**ORGANIZATION NAME:**
- **EIN:** 000000000
- **STATE OF INCORPORATION:** DE

**FILING VALUES:**
- **FORM TYPE:** 485BPOS
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-177651
- **FILM NUMBER:** 261044352

**BUSINESS ADDRESS:**
- **STREET 1:** 17605 WRIGHT STREET
- **CITY:** OMAHA
- **STATE:** NE
- **ZIP:** 68130
- **BUSINESS PHONE:** 631-470-2600

**MAIL ADDRESS:**
- **STREET 1:** 17605 WRIGHT STREET
- **CITY:** OMAHA
- **STATE:** NE
- **ZIP:** 68130

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Northern Lights ETF Trust
- **DATE OF NAME CHANGE:** 20111007

## Series and Classes Contracts Data

### Arrow Dow Jones Global Yield ETF (Series ID: S000035751)

| Class ID   | Class Name                       | Ticker Symbol   |
|:---|:---|:---|
| C000109586 | Arrow Dow Jones Global Yield ETF | GYLD            |

?xml version='1.0' encoding='ASCII'?

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 29, 2026

Securities Act Registration No. 333-177651

Investment Company Act Registration No. 811-22624

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

[ ]&nbsp;&nbsp;&nbsp;&nbsp; REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

[ ] Pre-Effective Amendment No. __

[X] Post-Effective Amendment No. 25

and/or

[ ]&nbsp;&nbsp;&nbsp;&nbsp; REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

[X] Amendment No. 28

(Check appropriate box or boxes)

ARROW ETF TRUST

(Exact Name of Registrant as Specified in Charter)

6100 CHEVY CHASE DR., SUITE 100

LAUREL, MD 20707

(Address of Principal Executive Offices)(Zip Code)

(301) 260-1001

(Registrant's Telephone Number, including Area Code)

CORPORATION SERVICE COMPANY

251 LITTLE FALLS DRIVE

WILMINGTON, DE 19808

(Name and Address of Agent for Service)

With copy to:

JOANN M. STRASSER, THOMPSON HINE LLP

41 SOUTH HIGH STREET, SUITE 1700

COLUMBUS, OHIO 43215

Approximate date of proposed public offering: As soon as practicable after the effective date of the Registration Statement.

It is proposed that this filing will become effective:

[]&nbsp;&nbsp;&nbsp;&nbsp; immediately upon filing pursuant to paragraph (b)

[X]&nbsp;&nbsp;&nbsp;&nbsp; On June 1, 2026 pursuant to paragraph (b)

[]&nbsp;&nbsp;&nbsp;&nbsp; 60 days after filing pursuant to paragraph (a)(1)

[]&nbsp;&nbsp;&nbsp;&nbsp; On (date) pursuant to paragraph (a)(1)

[]&nbsp;&nbsp;&nbsp;&nbsp; 75 days after filing pursuant to paragraph (a)(2)

[]&nbsp;&nbsp;&nbsp;&nbsp; On (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

[] This post-effective amendment designates a new effective date for a previously filed post-effective amendment.

![[arrowprospectusv2002.gif]](image_001.jpg)

**Arrow Dow Jones Global Yield ETF** 

**GYLD**

**PROSPECTUS** 

**June 1, 2026** 

1-877-277-6933

1-877-ARROW-FD

www.ArrowFunds.com

This Prospectus provides important information about the Arrow Dow Jones Global Yield ETF (the "Fund") that you should know before investing. Please read it carefully and keep it for future reference.

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.

Shares of the Fund are listed and traded on New York Stock Exchange LLC (the "Exchange")

**Table of Contents**

---

| | |
|:---|:---|
| **FUND SUMMARY** | **1** |
| &nbsp;&nbsp;&nbsp;Investment Objective | 1 |
| &nbsp;&nbsp;&nbsp;Fees and Expenses of the Fund | 1 |
| &nbsp;&nbsp;&nbsp;Principal Investment Strategies | 1 |
| &nbsp;&nbsp;&nbsp;Principal Investment Risks | 2 |
| &nbsp;&nbsp;&nbsp;Performance | 7 |
| &nbsp;&nbsp;&nbsp;Management | 8 |
| &nbsp;&nbsp;&nbsp;Purchase and Redemption of Fund Shares | 8 |
| &nbsp;&nbsp;&nbsp;Tax Information | 8 |
| &nbsp;&nbsp;&nbsp;Payments to Broker-Dealers and Other Financial Intermediaries | 8 |
| **ADDITIONAL INFORMATION ABOUT THE PRINCIPAL INVESTMENT STRATEGIES AND RISKS** | **9** |
| &nbsp;&nbsp;&nbsp;Investment Objective | 9 |
| &nbsp;&nbsp;&nbsp;Principal Investment Strategies | 9 |
| &nbsp;&nbsp;&nbsp;Portfolio Holdings Information | 16 |
| **MANAGEMENT OF THE FUND** | **16** |
| &nbsp;&nbsp;&nbsp;Investment Advisor | 16 |
| &nbsp;&nbsp;&nbsp;Portfolio Managers | 17 |
| **NET ASSET VALUE** | **17** |
| **PREMIUM/DISCOUNT INFORMATION** | **18** |
| **HOW TO BUY AND SELL SHARES** | **18** |
| &nbsp;&nbsp;&nbsp;Book Entry | 19 |
| **FREQUENT PURCHASES AND REDEMPTIONS OF SHARES** | **19** |
| **DISTRIBUTION AND SERVICE PLAN** | **19** |
| **DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES** | **19** |
| **FUND SERVICE PROVIDERS** | **21** |
| **INDEX PROVIDER** | **21** |
| &nbsp;&nbsp;&nbsp;Disclaimer | 20 |
| **OTHER INFORMATION** | **23** |
| &nbsp;&nbsp;&nbsp;Investments by Investment Companies | 23 |
| &nbsp;&nbsp;&nbsp;Continuous Offering | 23 |
| &nbsp;&nbsp;&nbsp;Householding | 23 |
| **FINANCIAL HIGHLIGHTS** | **24** |
| **PRIVACY NOTICE** | **25** |

---

**Fund Summary**

**<u>Investment Objective</u>**

The Fund seeks investment results that generally correspond, before fees and expenses, to the price and yield performance of the Dow Jones Global Composite Yield Index (the "Index").

**<u>Fees and Expenses of the Fund</u>**

The table below describes the fees and expenses that you may pay if you buy, hold, and sell shares of the Fund. **Investors may pay other fees, such as brokerage commissions and other fees to financial intermediaries, on their purchases and sales of shares in the secondary market, which are not reflected in the table or the example below.**

**Shareholder Fees** (fees paid directly from your investment)

---

| | |
|:---|:---|
| **Annual Fund Operating Expenses** <br> (expenses that you pay each year as a percentage of the value of your investment) |  |
| Management Fees | 0.75% |
| Distribution and/or Service (12b-1) Fees |  |
| Other Expenses | 0.00% |
| Total Annual Fund Operating Expenses | 0.75% |

---

**<u>Example</u>**

This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other funds.

This example assumes that you invest $10,000 in the Fund for the time periods indicated and then redeem all of your shares at the end of those periods. This example also assumes that your investment has a 5% return each year and that the Fund's operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

---

| | | | |
|:---|:---|:---|:---|
| **1 YEAR** | **3 YEARS** | **5 YEARS** | **10 YEARS** |
| $77 | $240 | $417 | $930 |

---

**<u>Portfolio Turnover</u>**

The Fund pays transaction costs, such as commissions, when it purchases and sells securities (or "turns over" its portfolio). A higher portfolio turnover may indicate higher transaction costs and may result in higher taxes when Fund 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, the Fund's portfolio turnover rate was 91% of the average value of its portfolio.

**<u>Principal Investment Strategies</u>**

---

| | |
|:---|:---|
| The Fund uses a "passive" or "indexing" investment approach to seek to track the price and yield performance of the Index. Unlike many investment companies, the Fund does not try to "beat" the Index and does not seek temporary defensive positions when markets decline.<br>Under normal circumstances, the Fund invests at least 80% of its total assets in the component securities of the Index (or depositary receipts representing those securities). The Index seeks to identify the 150 highest yielding investable securities in the world within three "asset classes." The Fund's investment strategy is a non-fundamental policy and may be changed without shareholder approval by the Trust's Board of Trustees upon 60 days' written notice to shareholders.<br>The three global "asset classes" in the Index are equity securities, fixed income securities and alternative investments, and the asset classes are represented in the Index by the following five types of securities:<br> • <u>Equity securities</u> are represented by depository receipts, common stocks and preferred stocks of companies of any size, including small and medium-sized companies;<br> • Fixed income securities (sometimes referred to as "debt securities" or "bonds") are represented by:<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Sovereign debt securities</u>; and<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Corporate bonds</u>, including investment and non-investment (or "junk") bonds; and | **Common Stocks** are the common equity securities issued by corporate issuers and usually include voting rights.<br>**Preferred Stocks** are equity securities issued by corporate issuers that typically pay dividends and have a higher claim on the assets of an issuer than common stock in a bankruptcy or similar proceeding, but do not include voting rights.<br>**Depositary Receipts** are receipts for shares of a foreign-based company that entitles the holder to distributions on the underlying security.<br>**Corporate Bonds** are debt securities issued by corporate issuers. They typically pay dividends and have a higher claim on an issuer's assets in a bankruptcy or similar proceeding but do not include voting rights or other equity characteristics.<br>**Sovereign Debt Securities** are debt securities issued or supported by domestic or foreign governments, their agencies and municipalities. Sovereign debt securities can be backed by the general credit of the government issuer or by a specific revenue source, such as a toll road. |

---

---

| | |
|:---|:---|
| • Alternative investments are represented by:<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Real estate securities</u>, including REITs; and<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• <u>Energy-related investments</u>, including preferred stocks of energy companies, royalty income trusts ("royalty trusts") and MLPs. Investments in MLPs will not exceed 25% of the Fund's assets.<br>Each type of security (i.e., equity, sovereign debt, corporate bond, real estate and energy securities) is equal weighted at 20% of the Index on rebalance and reconstitution dates and represented by approximately 30 component securities in the Index. The Index is rebalanced and reconstituted at the end of each calendar quarter.<br>Between quarter-ends, the relative weights of the types of securities in the Index will fluctuate with changes in the component securities' market values. Since the Index is composed of securities of all five types, there may be times when lower yielding securities of one type are selected for the Index and higher yielding securities of another type are not. | **REITs** are real estate investment trusts. REITs are investment trusts, corporations, or associations that invest in real estate assets and/or interests in mortgages on real estate assets. REITs include similar investment vehicles that invest in real estate assets, pay dividends and are treated as REITs for tax purposes.<br>**Royalty Trusts** are investment trusts that invest in natural resource companies. They may buy natural resource companies and/or the right to these companies' cash flows and/or royalties from the production and sale of natural resources.<br>**MLPs** are master limited partnerships. Many MLPs are publicly traded partnerships engaged in the transportation, storage and processing of minerals and natural resources. |

---

The Index aggregates five different sub-indexes to identify its component securities – one sub-index for each type of security.

The component securities of each sub-index are equal-weighted. The equity, real estate and energy sub-indexes are rebalanced quarterly and reconstituted annually. The sovereign and corporate debt sub-indexes are rebalanced and reconstituted quarterly.

Securities in the Index may include securities from developed or emerging market countries and securities of any market capitalization and credit quality, including junk bonds. Preferred stocks, other debt securities, convertible securities and sovereign debt securities may be rated by credit rating agencies and their ratings may be considered by the Index's methodology. The Fund may be concentrated in an industry or group of industries or in a sector to the extent the Index is concentrated in an industry or group of industries or sector.

Although it is expected that the Fund will invest in all of the positions in the Index in the same weight as they appear in the Index (i.e., replicate the Index), the Fund may use a "sampling" methodology to seek its investment objective. Sampling involves using a quantitative analysis to select securities that in the aggregate have investment characteristics resembling the Index in terms of key risk factors, performance attributes and other characteristics. The Fund may invest up to 20% of its total assets in instruments that are not component securities of the Index, including other exchange-traded funds ("ETFs").

**<u>Principal Investment Risks</u>**

As with all funds, there is the risk that you could lose money through your investment in the Fund. Many factors affect the Fund's net asset value, price of shares, and performance.

The following describes the risks the Fund bears with respect to its investments. As with any fund, there is no guarantee that the Fund will achieve its objective.

&nbsp;&nbsp;&nbsp;&nbsp;· *Concentration Risk:* A significant percentage of the Index may be comprised of
issuers in a single industry or group of industries. If the Fund is focused in an industry or group of industries, the value of Shares
of the Fund ("Shares") may rise and fall more than the value of shares of funds that invest in a broader range of securities.

&nbsp;&nbsp;&nbsp;&nbsp;· *Counterparty Risk:* The Fund may invest in financial instruments involving counterparties
for the purpose of attempting to gain exposure to particular securities or asset classes without actually purchasing those securities
or investments. These financial instruments may involve risks that are different from those associated with ordinary portfolio securities
transactions, and expose the Fund to the risk that the counterparty will be unable or unwilling to pay obligations due to the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;· *Currency Risk:* Currency risk is the potential for price fluctuations in the dollar
value of foreign securities because of changing currency exchange rates. Because the Fund's NAV is determined on the basis of U.S.
dollars, the Fund may lose money if the local currency of a foreign market depreciates against the U.S. dollar, even if the local currency
value of the Fund's holdings goes up.

&nbsp;&nbsp;&nbsp;&nbsp;· *Early Close/Trading Halt Risk:* An exchange or market may close or issue trading
halts on specific securities, or the ability to buy or sell certain securities or financial instruments may be restricted, which may prevent
the Fund from buying or selling certain securities or financial instruments. In these circumstances, the Fund may be unable to rebalance
its portfolio, may be unable to accurately price its investments and may incur substantial trading losses.

&nbsp;&nbsp;&nbsp;&nbsp;· *Equity Securities Risk:* Fluctuations in the value of equity securities held by
the Fund will cause the NAV of the Fund to fluctuate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o *Common Stock Risks:* Common stocks may decline significantly in price over short
of extended periods of time. Price changes may occur in the market as a whole, or they may occur in only a particular company, industry,
country or sector of the market. Common stock is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o *Preferred Stock Risks:* Preferred stocks are subject not only to risks generally applicable
to equity securities, but also risks associated with fixed-income securities, such as interest rate risk. A company's preferred
stock, which may pay fixed or variable rates of return, generally pays dividends only after the company makes required payments to creditors,
including vendors, depositors, counterparties, holders of its bonds and other fixed-income securities. As a result, the value of a company's
preferred stock will react more strongly than bonds and other debt to actual or perceived changes in the company's financial condition
or prospects. Preferred stock may be less liquid than many other types of securities, such as common stock, and generally has limited
or no voting rights. In addition, preferred stock is subject to the risks that a company may defer or not pay dividends, and, in certain
situations, may call or redeem its preferred stock or convert it to common stock.

&nbsp;&nbsp;&nbsp;&nbsp;· *ETF Structure Risks:* The Fund is structured as an ETF and as a result is subject
to the special risks, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o *Not Individually Redeemable:* Shares are not individually redeemable and may be redeemed by the Fund at net asset value ("NAV")
only in large blocks known as "Creation Units." There can be no assurance that there will be sufficient liquidity in Shares
in the secondary market to permit assembly of a Creation Unit. In addition, investors may incur brokerage and other costs in connection
with assembling a Creation Unit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o *Trading Issues:* Trading in Shares on the Exchange may be halted due to market conditions or
for reasons that, in the view of the Exchange, make trading in Shares inadvisable, such as extraordinary market volatility. There can
be no assurance that Shares will continue to meet the listing requirements of the Exchange, which may result in the Shares being delisted.
An active trading market for Shares may not be developed or maintained. If the securities in the Fund's portfolio are traded outside
a collateralized settlement system, the number of financial institutions that can act as authorized participants ("Authorized Participants")
that can post collateral on an agency basis is limited, which may limit the market for Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o *Market Price Variance Risk:* The market prices of Shares will fluctuate in response to changes
in NAV and supply and demand for Shares and will include a "bid-ask spread" charged by the exchange specialists, market makers
or other participants that trade the particular security. There may be times when the market price and the NAV vary significantly. This
means that Shares may trade at a discount to NAV.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· In times of market stress, market makers may step away from their role of market making in shares of
ETFs and in executing trades, which can lead to differences between the market value of Shares and the Fund's NAV.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· The market price for Shares may deviate from the Fund's NAV, particularly during times of market
stress, with the result that investors may pay significantly more or significantly less for Shares than the Fund's NAV, which is
reflected in the bid and ask price for Fund shares or in the closing price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ When all or a portion of an ETF's underlying securities trade in a market that is closed when
the market for Shares is open, there may be changes from the last quote of the closed market and the quote from the Fund's domestic
trading day, which could lead to differences between the market value of Shares and the Fund's NAV.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· In stressed market conditions, the market for Shares may become less liquid in response to the deteriorating
liquidity of the Fund's portfolio. This adverse effect on the liquidity of Shares may, in turn, lead to differences between the
market value of Shares and the Fund's NAV.

&nbsp;&nbsp;&nbsp;&nbsp;· *Fixed-Income Securities Risk:* Fixed-income securities are subject to special risks, including interest
rate risk, credit risk and prepayment risk.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o *Interest Rate Risk:* Interest rate risk is the risk that fixed income securities will decline in
value because of changes in interest rates. Generally, the value of debt securities falls as interest rates rise. Fixed income securities
differ in their sensitivities to changes in interest rates. Fixed income securities with longer effective durations tend to be more sensitive
to changes in interest rates, usually making them more volatile than securities with shorter effective durations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o *Credit Risk:* Credit risk is the risk that the inability or perceived inability of an issuer to
make interest and principal payments will cause the value of its securities to decrease, and cause the Fund a loss. If an issuer's
financial health deteriorates, it may result in a reduction of the credit rating of the issuer's securities. Declines in credit
quality can result in bankruptcy for the issuer and permanent loss of investment. The fixed income securities held by the Fund are subject
to the risk that the issuer will be unwilling or unable to satisfy its obligations to the Fund, including the periodic payment of interest
or the payment of principal upon maturity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o *Prepayment Risk:* Prepayment risk is the risk that issuers of callable securities with high
interest coupons prepay (or "call") their bonds before their maturity date due to falling interest rates. If a call were
exercised by the issuer during a period of declining interest rates, the Fund is likely to have to replace such called security with
a lower yielding security. If that were to happen, it would decrease the Fund's net investment income.

&nbsp;&nbsp;&nbsp;&nbsp;· *Foreign Markets Risk:* Foreign investments are subject to the same risks as domestic investments
and additional risks, including international trade, currency, political, regulatory and diplomatic risks, which may affect their value.
Foreign markets are subject to special risks associated with foreign investments including, but not limited to: lower levels of liquidity
and market efficiency; greater securities price volatility; exchange rate fluctuations and exchange controls; limitations on foreign ownership
of securities; imposition of withholding or other taxes; imposition of restrictions on the expatriation of the assets of the Fund; difficulties
in enforcing contractual obligations; lower levels of regulation of the securities market; risks in clearance and settlement processes;
and weaker accounting, disclosure and reporting requirements. Shareholder and bondholder rights under the laws of some foreign countries
may not be as favorable as U.S. laws. Also, foreign securities are subject to the risk that their market price may not reflect the issuer's
condition because there is not sufficient publicly available information about the issuer.

&nbsp;&nbsp;&nbsp;&nbsp;· *Investing in Other ETFs Risk:* ETFs are subject to investment advisory and other
expenses, which will be indirectly paid by the Fund. As a result, your cost of investing in the Fund will be higher than the cost of investing
directly in ETFs and may be higher than other mutual funds that invest directly in bonds. Each ETF is subject to specific risks, depending
on its investments.

&nbsp;&nbsp;&nbsp;&nbsp;· *"Junk Bond" Risk:* Non-investment grade securities and unrated securities
of comparable credit quality – generally known as junk bonds – are subject to the increased risk of an issuer's inability
to meet principal and interest payment obligations and are considered highly speculative. These securities may be subject to greater price
volatility due to such factors as specific corporate developments, interest rate sensitivity, negative perceptions whether real or perceived,
and adverse economic conditions. In addition, there may be little trading in the secondary market for particular bonds or other debt securities,
which may make them more difficult to value or sell. Issuers of lower-rated securities also have a greater risk of default and bankruptcy.

&nbsp;&nbsp;&nbsp;&nbsp;· *Liquidity Risk:* Some securities held by the Fund may be difficult to sell or illiquid,
particularly during times of market turmoil. Illiquid securities also may be difficult to value. If the Fund is forced to sell an illiquid
security at an unfavorable time, the Fund may incur a loss and may not achieve a high correlation with the Index.

&nbsp;&nbsp;&nbsp;&nbsp;· *Market and Geopolitical Risk:* The increasing interconnectivity between global
economies and financial markets increases the likelihood that events or conditions in one region or financial market may adversely impact
issuers in a different country, region or financial market. Securities in the Fund's portfolio may underperform due to inflation
(or expectations for inflation), interest rates, global demand for particular products or resources, natural disasters, pandemics, epidemics,
terrorism, tariffs and trade wars, international conflicts, regulatory events and governmental or quasi-governmental actions. The occurrence
of global events similar to those in recent years may result in market volatility and may have long term effects on both the U.S. and
global financial markets.

&nbsp;&nbsp;&nbsp;&nbsp;· *MLP Securities Risk:* Investments in the debt and equity securities of MLPs involve
risks that differ from an investment in common stock. Holders of units of MLPs have more limited control rights and limited rights to
vote on matters affecting the MLP as compared to holders of stock of a corporation. MLPs are controlled by their general partners, which
may be subject to conflicts of interest.

General partners typically have limited fiduciary duties to an MLP, which could allow a general partner to favor its own interests over the MLP's interests. General partners of MLPs also often have limited call rights that may require unitholders to sell their common units at an undesirable time or price. MLPs may issue additional common units without unitholder approval, which would dilute the interests of existing unitholders, including the Fund's ownership interest. The amount of cash that each individual MLP can distribute to the Fund, which the Fund then uses to pay or distribute to its shareholders, will depend on the amount of cash the MLP generates from operations. This will vary from quarter to quarter depending on factors affecting the natural gas infrastructure market generally and on factors affecting the particular business lines of the MLP. Available cash will also depend on an MLP's level of operating costs (including incentive distributions to its general partner), level of capital expenditures, debt service requirements, acquisition costs (if any), fluctuations in working capital needs and other factors. One benefit of MLPs depends largely on the MLPs being classified as partnerships for federal tax purposes and the MLPs having no federal income tax liability at the entity level. A change in current federal tax law or a change in an MLP's business might cause the MLP not to be taxed as a partnership. Treatment of one or more MLPs as a corporation for federal tax purposes could affect the Fund's ability to meet its investment objective and would reduce the amount of cash available to pay or distribute to shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;· *MLP Tax Risks:* The benefit you are expected to derive from the Fund's investments
in MLPs depends largely on the MLPs being classified as partnerships for federal tax purposes. As a partnership, an MLP has no federal
income tax liability at the entity level. If, as a result of a change in current law or a change in an MLP's business, an MLP were
treated as a corporation for federal purposes, the MLP would be obligated to pay federal income tax on its taxable income at the corporate
tax rate and the amount of cash available for distribution would be reduced and part of all of the distributions the Fund receives might
be taxed entirely as dividend income. Therefore, treatment of one or more MLPs as a corporation for federal tax purposes could affect
the Fund's ability to meet its investment objective and would reduce the amount of cash available to pay or distribute to shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;· *Non-Correlation Risk:* The Fund's return may not match the return of the
Index for a number of reasons, including: the Fund incurs operating expenses not applicable to the Index, and incurs costs in buying and
selling securities; the Fund may not be fully invested at times; the performance of the Fund and the Index may vary due to asset valuation
differences and differences between the Fund's portfolio and the Index resulting from legal restrictions, cost or liquidity constraints
and; if used, representative sampling may cause the Fund's tracking error to be higher than would be the case if the Fund purchased
all of the securities in the Index.

&nbsp;&nbsp;&nbsp;&nbsp;· *Passive Strategy/Index:* The Fund is managed with a passive investment strategy, attempting
to track the performance of an unmanaged index of underlying securities. This differs from an actively-managed fund, which typically seeks
to outperform a benchmark index. As a result, the Fund may hold constituent securities of the Index regardless of the current or projected
performance of a specific security or a particular industry, market sector, country or currency. Maintaining investments in securities
regardless of market conditions or the performance of individual securities could cause the Fund's return to be lower or higher
than if the Fund employed an active strategy.

&nbsp;&nbsp;&nbsp;&nbsp;· *REIT Risk:* Investments in securities of real estate companies involve risks including,
among others, adverse changes in national, state or local real estate conditions; obsolescence of properties; changes in the availability,
cost and terms of mortgage funds; and the impact of changes in environmental laws. The value of a REIT can depend on the structure of
and cash flow generated by the REIT. In addition, like mutual funds, REITs have expenses, including advisory and administration fees,
which are paid by their shareholders. Further, the failure of a company to qualify as a REIT or comply with applicable federal tax requirements
could have adverse consequences for the Fund, including significantly reducing return to the Fund on its investment.

&nbsp;&nbsp;&nbsp;&nbsp;· *RIC Qualification Risk:* To qualify for treatment as a regulated investment company
("RIC") under the Internal Revenue Code of 1986, as amended, the Fund must meet certain income source, asset diversification
and annual distribution requirements. The Fund's MLP investments may make it more difficult for the Fund to meet these requirements.
The asset diversification requirements include a requirement that, at the end of each quarter of each taxable year, not more than 25%
of the value of the Fund's total assets is invested in the securities (including debt securities) of one or more "qualified
publicly traded partnerships"; the Fund anticipates that the MLPs in which it invests will be "qualified publicly traded partnerships".
If the Fund's MLP investments exceed this 25% limitation, then the Fund would not satisfy the diversification requirements and could
fail to qualify as a RIC. If, in any taxable year, the Fund fails to qualify as a RIC for any reason, the Fund would be taxed as an ordinary
corporation and would become (or remain) subject to corporate income tax. The resulting corporate taxes could substantially reduce the
Fund's net assets, the amount of income available for distribution and the amount of our distributions.

&nbsp;&nbsp;&nbsp;&nbsp;· *Royalty Trust Risk:* Investments in royalty trusts, which differ from owning shares
of a corporation, will have varying degrees of risk depending on the sector and the underlying assets. They will also be subject to general
risks associated with business cycles, commodity prices, interest rates, and other economic factors. Typically, royalty trusts are more
volatile than fixed-income securities and preferred shares. To the extent that claims against a royalty trust are not satisfied by
the trust, investors in the trust (including the Fund if it is an investor in the Trust) could be held responsible for those claims. Royalty
trusts may be subject to certain risks associated with a decline in demand for crude oil, natural gas and refined petroleum products,
which, in turn, could adversely affect income and royalty trust revenues and cash flows. Factors that could lead to a decrease in market
demand include a recession or other adverse economic conditions, an increase in the market price of the underlying commodity, higher taxes
or other regulatory actions that increase costs, or a shift in consumer demand for such products. A rising interest rate environment could
adversely impact the performance of royalty trusts. Rising interest rates could limit the capital appreciation of royalty trusts because
of the increased availability of alternative investments at more competitive yields.

&nbsp;&nbsp;&nbsp;&nbsp;· *Sampling Risk:* The Fund's use of a representative sampling approach, if
used, could result in its holding a smaller number of securities than are in the Index. As a result, an adverse development with an issuer
of securities held by the Fund could result in a greater decline in NAV than would be the case if the Fund held all of the securities
in the Index. To the extent the assets in the Fund are smaller, these risks will be greater.

&nbsp;&nbsp;&nbsp;&nbsp;· *Sector Risk:* Securities in the sectors of the Index or in the Fund's portfolio
may underperform in comparison to the general securities markets or other sectors.

&nbsp;&nbsp;&nbsp;&nbsp;· *Small and Medium Capitalization Company Risk:* Investing in securities of small
and medium capitalization companies involves greater risk than is customarily associated with investing in larger, more established companies.
These companies' securities may be more volatile and less liquid than those of more established companies. These companies may be
more dependent on single products or key personnel, and may be newer than larger, more established companies with less information to
evaluate.

&nbsp;&nbsp;&nbsp;&nbsp;· *Sovereign Debt Securities Risk:* Investments in sovereign debt obligations involve
special risks not present in corporate debt obligations. The issuer of the sovereign debt or the governmental authorities that control
the repayment of the debt may be unable or unwilling to repay principal or interest when due, and the Fund may have limited recourse in
the event of a default. During periods of economic uncertainty, the market prices of sovereign debt, and the Fund's net asset value,
may be more volatile than prices of U.S. debt obligations. In the past, certain non-U.S. markets have encountered difficulties in servicing
their debt obligations, withheld payments of principal and interest and declared moratoria on the payment of principal and interest on
their sovereign debts.

**<u>Performance</u>**

The bar chart and performance table below show the variability of the Fund's returns, which is some indication of the risks of investing in the Fund. The bar chart shows performance of the Shares for each full calendar year for the past ten years. The performance table compares the performance of the Shares over time to the performance of the Index. You should be aware that the Fund's past performance (before and after taxes) may not be an indication of how the Fund will perform in the future. Updated performance information is available at no cost by visiting www.ArrowFunds.com or by calling 1-877-277-6933 (1-877-ARROW-FD).

**Total Return**

(Year ended December 31)

![](image_001.gif)

---

| | | |
|:---|:---|:---|
| Best Quarter | 12/31/2020 | 21.16% |
| Worst Quarter | 3/31/2020 | (38.21)% |

---

The year-to-date return as of the most recent calendar quarter which ended March 31, 2026 was 5.24%.

**Average Annual Total Returns**

(as of December 31, 2025)

---

| | | | |
|:---|:---|:---|:---|
|  | **One<br> Year** | **Five<br> Years** | **Ten<br>Years** |
| Return Before Taxes | 14.72% | 7.53% | 4.77% |
| Return after Taxes on Distributions | 11.34% | 4.74% | 1.97% |
| Return after Taxes on Distributions and Sale of Fund Shares | 9.22% | 4.81% | 2.51% |
| Dow Jones Global Composite Yield Index<sup>(1)</sup> | 14.87% | 8.86% | 6.05% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) The Dow Jones Global Composite Yield Index is constructed by equally weighting the five global high-yield
index baskets, each of which is made up of 30 equally weighted components. Investors cannot invest directly in an index.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates during the period covered by the table above 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. After-tax returns shown are not relevant to investors who hold their Shares through tax-deferred arrangements such as an individual retirement account ("IRA") or other tax-advantaged accounts.

**<u>Management</u>**

 

*Investment Advisor.* Arrow Investment Advisors, LLC (the "Advisor").

 

*Portfolio Managers.* The following individuals are primarily responsible for the day-to-day management of the Fund's portfolio:

---

| | | |
|:---|:---|:---|
| **Name** | **Title with Advisor** | **When Began Managing Fund** |
| Joseph Barrato | Chief Executive Officer | 2014 |
| Jonathan S. Guyer | Portfolio Manager | 2014 |

---

**<u>Purchase and Redemption of Fund Shares</u>**

Individual Shares may only be purchased and sold in secondary market transactions through a broker dealer. Because ETF shares trade at market prices rather than net asset value, Shares may trade at a price greater than net asset value (premium) or less than net asset value (discount). Investors may incur costs attributable to the difference between the highest price a buyer is willing to pay to purchase shares of the Fund (bid) and the lowest price a seller is willing to accept for shares of the Fund (ask) when buying or selling shares in the secondary market (the "bid-ask spread"). Recent information, including information regarding the fund's NAV, market price, premiums and discounts, and bid-ask spread, is available at www.ArrowFunds.com.

**<u>Tax Information</u>**

The Fund's distributions are generally taxable as ordinary income or capital gains. A sale of Shares may result in capital gain or loss.

**<u>Payments to Broker-Dealers and Other Financial Intermediaries</u>**

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. If you purchase Shares through a broker-dealer or other financial intermediary (such as a bank), the Fund and its related companies may pay the intermediary for the sale of Shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary's website for more information.

**Additional Information About the Principal Investment Strategies and Risks**

**<u>Investment Objective</u>**

The Fund seeks investment results that generally correspond, before fees and expenses, to the price and yield performance of the Index. The Fund's investment objective is a non-fundamental policy and may be changed without shareholder approval by the Trust's Board of Trustees (the "Board") upon 60 days' written notice to shareholders.

**<u>Principal Investment Strategies</u>**

Arrow Investment Advisors, LLC (the "Advisor") seeks correlation over time of 0.95 or better between the Fund's performance and the performance of the Index; a figure of 1.00 would represent perfect correlation.

Although the Advisor intends for the Fund to replicate the Dow Jones Global Composite Yield Index (the "Index"), the Fund may employ representative sampling to achieve its investment objective. In particular, the Fund may use representative sampling when securities in the Index are not available in the quantities needed by the Fund, when any security in the Index is subjecting to trading in round lots that are too large for inclusion in the basket of in-kind securities deposited for a Creation Unit, and until the Fund achieves scale.

The Fund invests at least 80% of its total assets in the components of the Index and up to 20% of its assets in instruments that are not component securities of the Index, if the Advisor believes that such instruments will help the Fund to track its Index. For example, provided that the Fund continues to invest at least 80% of its total assets in the components of the Index and the Advisor believes it will help the Fund to track its Index, the Fund may invest in securities not included in the Index, other ETFs and money market instruments, including repurchase agreements or other funds which invest exclusively in money market instruments (subject to applicable limitations under the Investment Company Act of 1940, as amended, (the "1940 Act"), or rules under the 1940 Act). Further, the Fund may sell securities included in its Index in anticipation of their removal from the Index, purchase securities not included in the Index in anticipation of their addition to the Index and/or hold a security no longer included in the Index. The Advisor anticipates that it may take approximately three business days (a business day is any day that the New York Stock Exchange ("NYSE") is open) for the Advisor to reflect fully the additions and deletions to the Index in the portfolio composition of the Fund.

The Fund will not implement a temporary defensive strategy to protect it against potential securities market declines.

The Index uses rules-based criteria to select and identify the highest yielding securities within a range of asset classes determined in accordance with the Index's methodologies from a universe of foreign and domestic securities. The Index is based on five sub-indexes. These sub-indexes, together, comprise the Index and include (1) common stock, preferred stock and depositary receipts, (2) real-estate related investments, including REITs, (3) investment grade and non-investment grade corporate bonds,

(4) energy-related investments, including preferred stock of energy companies, royalty trusts and MLPs, and (5) sovereign debt securities.

The five sub-indexes are:

&nbsp;&nbsp;&nbsp;&nbsp;· Dow Jones Global Equity Yield Index

&nbsp;&nbsp;&nbsp;&nbsp;· Dow Jones Global Real Estate Yield Index

&nbsp;&nbsp;&nbsp;&nbsp;· Dow Jones Global Alternative Yield Index

&nbsp;&nbsp;&nbsp;&nbsp;· Credit Suisse Yield Enhanced Global Corporate Index

&nbsp;&nbsp;&nbsp;&nbsp;· Credit Suisse Yield Enhanced Sovereign Index

Each sub-index may include both foreign and domestic issuers. The equity, real estate and energy sub-indexes may include issues from the following different countries as maintained by the index provider, S&P Dow Jones Indexes: Australia, Austria, Belgium, Brazil, Canada, Chile, Colombia, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Japan, Luxembourg, Malaysia, Mexico, Morocco, Netherlands, New Zealand, Norway, Peru, Philippines, Poland, Portugal, Russia, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey and United States of America. The equity, real estate and energy sub-indexes also include securities of Chinese issuers that are trading other than in mainland China. The sovereign and corporate debt sub-indexes include issues from the same countries as the equity, real estate and energy sub-indexes and also include issues from Panama. For more information about the indexes, please see www.spdji.com.

Each sub-index represents, at each quarterly rebalancing and reconstitution of the Index, 20% of the Index; that percentage fluctuates in between quarterly rebalancing.

Each of the sub-indexes in the Index is rebalanced quarterly and its components are re-weighted at that time. The equity, real estate and energy sub-indexes are reconstituted annually. The corporate and sovereign debt sub-indexes are reconstituted quarterly. Each sub-index has a different investment universe and selection criteria, determined in accordance with pre-determined methodologies maintained by the sub-index providers. At rebalance and reconstitution dates, each sub-index selects 30 securities for inclusion in the Index. The combination of the five sub-indexes results in the Index normally having 150 components.

The sub-indexes include liquidity screens that are designed to make them investable. The MLP sub-index also includes a screen that excludes from the universe of eligible MLPs those investing in the financial services industry.

The sub-indexes may be subject to quarterly reviews by their providers. In connection with such reviews, if a component security has exhibited significant negative dividend growth or negative earnings from continuing operations over the past twelve-month period, the security may be removed from the sub-index by the provider. Component securities are also reviewed monthly and may be removed from a sub-index during a month if the company eliminates its dividend, or lowers, but does not eliminate, its dividend in certain circumstances. In addition, component securities may be immediately removed from a sub-index if the company is affected by a corporate action (i.e. delisting or bankruptcy). The removal of a security from a sub-index would result also in its removal from the Index. In these instances, the removed security is replaced by another security in the same sub-index before the quarter end if the constituent count of the sub-index falls below 25 stocks between quarterly rebalancing.

The methodology of the Index is published by the index provider on the index provider's website, at https://www.spglobal.com/spdji/en/documents/methodologies/methodology-dj-global-composite-yield.pdf.

**<u>Principal Investment Risks</u>**

The following provides additional information about the principal risks identified under "Principal Investment Risks" and other risks applicable to the Fund.

* *Concentration Risk:* A significant percentage of the Index may be comprised
of issuers in a single industry or group of industries. If the Fund is focused in an industry or group of industries, the value of Shares
may rise and fall more than the value of shares of funds that invest in a broader range of securities.

* *Counterparty Risk:* The Fund may invest in financial instruments involving
counterparties for the purpose of attempting to gain exposure to a particular group of securities or asset class without actually purchasing
those securities or investments. These financial instruments may include swap agreements and structured notes. The use of swap agreements
and other counterparty instruments involves risks that are different from those associated with ordinary portfolio securities transactions.
For example, the Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default
or bankruptcy of a swap agreement counterparty. Swap agreements and other counterparty instruments also may be considered to be illiquid.
In addition, the Fund may enter into swap agreements that involve a limited number of counterparties, which may increase the Fund's
exposure to counterparty credit risk. The Fund does not specifically limit its counterparty risk with respect to any single counterparty.
Further, there is a risk that no suitable counterparties will be willing to enter into, or continue to enter into, transactions with the
Fund and, as a result, the Fund may not be able to achieve its investment objective.

* *Currency Risk:* Currency risk is the potential for price fluctuations in
the dollar value of foreign securities because of changing currency exchange rates. Because the Fund's NAV is determined on the
basis of U.S. dollars, the Fund may lose money if the local currency of a foreign market depreciates against the U.S. dollar, even if
the local currency value of the Fund's holdings goes up.

* *Early Close/Trading Halt Risk:* An exchange or market may close or issue
trading halts on specific securities, or the ability to buy or sell certain securities or financial instruments may be restricted, which
may prevent the Fund from buying or selling certain securities or financial instruments. In these circumstances, the Fund may be unable
to rebalance its portfolio, may be unable to accurately price its investments and may incur substantial trading losses.

* *Equity Securities Risk:* The value of the Fund's stock holdings may decline
in price because of changes in prices of its holdings or a broad stock market decline. These fluctuations could be a sustained trend or
a drastic movement. The stock markets generally move in cycles, with periods of rising prices followed by periods of declining prices.
The value of the Fund may reflect these fluctuations.

* *Common Stock Risk:* Common stocks may decline significantly in price over short
or extended periods of time. Price changes may occur in the market as a whole, or they may occur in only a particular company, industry,
country or sector of the market. Common stock is subordinate to preferred stock upon the liquidation or bankruptcy of the issuing company.

* *Preferred Stock Risk:* Preferred stocks are subject not only to issuer-specific and market
risks generally applicable to equity securities, but also risks associated with fixed-income securities, such as interest rate risk. A
company's preferred stock, which may pay fixed or variable rates of return, generally pays dividends only after the company makes
required payments to creditors, including vendors, depositors, counterparties, holders of its bonds and other fixed-income securities.
As a result, the value of a company's preferred stock will react more strongly than bonds and other debt to actual or perceived
changes in the company's financial condition or prospects. Preferred stock may be less liquid than many other types of securities,
such as common stock, and generally has limited or no voting rights. In addition, preferred stock is subject to the risks that a company
may defer or not pay dividends, and, in certain situations, may call or redeem its preferred stock or convert it to common stock.

&nbsp;&nbsp;&nbsp;&nbsp;· *ETF Structure Risks:* The Fund is structured as an ETF and as a result
is subject to the special risks, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o *Not Individually Redeemable:* Shares are not individually redeemable and may be redeemed by the
Fund at NAV only in large blocks known as "Creation Units." There can be no assurance that there will be sufficient liquidity
in Shares in the secondary market to permit assembly of a Creation Unit. In addition, investors may incur brokerage and other costs in
connection with assembling a Creation Unit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o *Trading Issues:* Trading in Shares on the Exchange may be halted due to market conditions or for
reasons that, in the view of the Exchange, make trading in Shares inadvisable, such as extraordinary market volatility. There can be no
assurance that Shares will continue to meet the listing requirements of the Exchange. There can be no assurance that Shares will continue
to meet the listing requirements of the Exchange. An active trading market for the Shares may not be developed or maintained. If the securities
in the Fund's portfolio are traded outside a collateralized settlement system, the number of financial institutions that can act
as Authorized Participants that can post collateral on an agency basis is limited, which may limit the market for the Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o *Market Price Variance Risk:* Individual Shares that are listed for trading on the Exchange can be
bought and sold in the secondary market at market prices. The market prices of Shares will fluctuate in response to changes in NAV and
supply and demand for Shares. There may be times when the market price and the NAV vary significantly and you may pay more than NAV when
buying Shares on the secondary market, and you may receive less than NAV when you sell those Shares. The market price of Shares, like
the price of any exchange-traded security, includes a "bid-ask spread" charged by the exchange specialists, market makers
or other participants that trade the particular security. In times of severe market disruption, the bid-ask spread often increases significantly.
This means that Shares may trade at a discount to NAV and the discount is likely to be greatest when the price of Shares is falling fastest,
which may be the time that you most want to sell your Shares. The Fund's investment results are measured based upon the daily NAV
of the Fund over a period of time. Investors purchasing and selling Shares in the secondary market may not experience investment results
consistent with those experienced by those creating and redeeming directly with the Fund:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ In times of market stress, market makers may step away from their role of market making in shares of ETFs
and in executing trades, which can lead to differences between the market value of Shares and the Fund's NAV.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ When all or a portion of an ETFs underlying securities trade in a market that is closed when the market
for the Shares is open, there may be changes from the last quote of the closed market and the quote from the Fund's domestic trading
day, which could lead to differences between the market value of the Shares and the Fund's NAV.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ In stressed market conditions, the market for the Shares may become less liquid in response to the deteriorating
liquidity of the Fund's portfolio. This adverse effect on the liquidity of the Shares may, in turn, lead to differences between
the market value of the Shares and the Fund's NAV.

* *Fixed-Income Securities Risk:* Fixed-income securities are subject to special
risks, including interest rate risk, credit risk and prepayment risk.

* *Interest Rate Risk:* Interest rate risk is the risk that fixed income securities
will decline in value because of changes in interest rates. Generally, the value of debt securities falls as interest rates rise. Fixed
income securities differ in their sensitivities to changes in interest rates. Fixed income securities with longer effective durations
tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter effective durations.

* *Credit Risk:* Credit risk is the risk that the inability or perceived inability
of an issuer to make interest and principal payments will cause the value of its securities to decrease, and cause the Fund a loss. If
an issuer's financial health deteriorates, it may result in a reduction of the credit rating of the issuer's securities and
may lead to the issuer's inability to honor its obligations, including making timely payment of interest and principal. Although
a downgrade of a bond's credit ratings may not affect its price, a decline in credit quality may make bonds less attractive, thereby
increasing the yield on the bond and driving down the price. Declines in credit quality can result in bankruptcy for the issuer and permanent
loss of investment. The fixed income securities held by the Fund are subject to the risk that the issuer will be unwilling or unable to
satisfy its obligations to the Fund, including the periodic payment of interest or the payment of principal upon maturity. Rating agencies
are private services that provide ratings of the credit quality of fixed income securities.

* Ratings assigned by a rating agency are not absolute standards of credit quality and do not
evaluate market risks. Rating agencies may fail to make timely changes in credit ratings and an issuer's current financial condition
may be better or worse than a rating indicates. Further, rating agencies may end coverage of a previously-rated security. Unrated securities
may be less liquid than comparable rated securities.

* *Prepayment Risk:* Prepayment risk is the risk that issuers of callable securities with high interest coupons prepay (or
 "call") their bonds before their maturity date due to falling interest rates. If a call were exercised by the issuer
 during a period of declining interest rates, the Fund is likely to have to replace such called security with a lower yielding
 security. If that were to happen, it would decrease the Fund's net investment income.

* *Foreign and Emerging Markets Risk:* Foreign investments involve special risks not present
in U.S. investments that can increase the chances that the Fund will lose money. These risks are higher for emerging markets investments,
which can be subject to greater social, economic, regulatory and political uncertainties. In particular, investments in, or exposure to,
foreign securities involve the following risks:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The economies of some foreign markets often do not compare favorably with that of the U.S. in areas such as growth of gross domestic
product, reinvestment of capital, resources, and balance of payments. Some of these economies may rely heavily on particular industries
or foreign capital.

They may be more vulnerable to adverse diplomatic developments, the imposition of economic sanctions against a country, changes in international trading patterns, trade barriers and other protectionist or retaliatory measures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Governmental actions – such as the imposition of capital controls, nationalization of companies
or industries, expropriation of assets or the imposition of punitive taxes – may adversely affect long investments in foreign markets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The governments of certain countries may prohibit or substantially restrict foreign investing in their
capital markets or in certain industries. This could severely affect security prices. This could also impair the Fund's ability
to purchase or sell foreign securities or transfer its assets or income back to the U.S., or otherwise adversely affect the Fund's
operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Other foreign market risks include foreign exchange controls, difficulties in pricing securities, defaults on foreign government
securities, difficulties in enforcing favorable legal judgments in foreign courts, and political and social instability. Legal remedies
available to investors in some foreign countries are less extensive than those available to investors in the U.S. Many foreign governments
supervise and regulate stock exchanges, brokers and the sale of securities less than the U.S. government does. Corporate governance may
not be as robust as in more developed countries. As a result, protections for minority investors may not be strong, which could affect
security prices.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Accounting standards in other countries are not necessarily the same as in the U.S. If the accounting standards in another country
do not require as much disclosure or detail as U.S. accounting standards, it may be harder to assess a company's financial condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Because there are usually fewer investors on foreign exchanges and smaller numbers of shares traded each day, it may be difficult
for the Fund to buy and sell securities on those exchanges. In addition, prices of foreign securities may go up and down more than prices
of securities traded in the U.S.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Foreign markets may have different clearance and settlement procedures. In certain markets, settlements
may not keep pace with the volume of securities transactions. If this occurs, settlement may be delayed and the Fund's assets may
be uninvested and may not be earning returns. The Fund also may not be able to sell an investment because of these delays.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o Changes in currency exchange rates will affect the value of the Fund's foreign holdings or exposures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The costs of foreign securities transactions tend to be higher than those of U.S. transactions, increasing the transaction costs
paid by the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o International trade barriers or economic sanctions against foreign countries may adversely affect the
Fund's foreign holdings or exposures.

&nbsp;&nbsp;&nbsp;&nbsp;· *Emerging Markets Risk:* The Fund may invest in countries with newly organized or less developed
securities markets. There are typically greater risks involved in investing in emerging markets securities. Generally, economic structures
in these countries are less diverse and mature than those in developed countries and their political systems tend to be less stable. Emerging
market countries may have different regulatory, accounting, auditing, and financial reporting and record keeping standards and may have
material limitations on PCAOB inspection, investigation, and enforcement. Therefore, the availability and reliability of information material
to an investment decision, particularly financial information, in emerging market companies may be limited in scope and reliability as
compared to information provided by U.S. companies. Emerging market economies may be based on only a few industries, therefore security
issuers, including governments, may be more susceptible to economic weakness and more likely to default. Emerging market countries also
may have relatively unstable governments, weaker economies, and less-developed legal systems with fewer security holder rights. Investments
in emerging markets countries may be affected by government policies that restrict foreign investment in certain issuers or industries.

&nbsp;&nbsp;&nbsp;&nbsp;· The potentially smaller size of their securities markets and lower trading volumes can make investments
relatively illiquid and potentially more volatile than investments in developed countries, and such securities may be subject to abrupt
and severe price declines. Due to this relative lack of liquidity, the Fund may have to accept a lower price or may not be able to sell
a portfolio security at all. An inability to sell a portfolio position can adversely affect the Fund's value or prevent the Fund
from being able to meet cash obligations or take advantage of other investment opportunities.

&nbsp;&nbsp;&nbsp;&nbsp;· *Investing in Other ETFs Risk:* ETFs are subject to investment advisory and other expenses, which
will be indirectly paid by the Fund. As a result, your cost of investing in the Fund will be higher than the cost of investing directly
in ETFs and may be higher than other mutual funds that invest directly in bonds. Each ETF is subject to specific risks, depending on its
investments.

&nbsp;&nbsp;&nbsp;&nbsp;· *"Junk Bond" Risk:* Investments in securities rated below investment grade, or "junk
bonds," generally involve significantly greater risks of loss than an investment in investment grade bonds. Junk bonds are debt
securities that are rated BB or lower by S&P and/or Ba or lower by Moody's or the equivalent by another ratings agency, or,
if unrated at the time of purchase, are deemed to be of comparable quality by the Advisor. Compared with issuers of investment grade bonds,
junk bonds are more likely to encounter financial difficulties and to be materially affected by these difficulties, and are considered
highly speculative. Rising interest rates may compound these difficulties and reduce an issuer's ability to repay principal and
interest obligations. These bonds are often thinly traded and can be more difficult to sell and value accurately than high quality bonds
and, as a result, may be less liquid than higher quality investments. A real or perceived economic downturn or higher interest rates could
cause a decline in high yield bond prices by lessening the ability of issuers to make principal and interest payments. Because objective
pricing data may be less available, judgment may play a greater role in the valuation process. In addition, the entire high yield bond
market can experience sudden and sharp price swings due to a variety of factors, including changes in economic forecasts, stock market
activity, large or sustained sales by major investors, a high-profile default, or just a change in the market's psychology.
This type of volatility is usually associated more with stocks than bonds, but junk bond investors should be prepared for it.

&nbsp;&nbsp;&nbsp;&nbsp;· *Liquidity Risk:* Some securities held by the Fund may be difficult to sell or illiquid, particularly
during times of market turmoil. Illiquid securities also may be difficult to value. If the Fund is forced to sell an illiquid security
at an unfavorable time, the Fund may incur a loss and may not achieve a high correlation with the Index.

&nbsp;&nbsp;&nbsp;&nbsp;· *Market and Geopolitical Risk:* The increasing interconnectivity between global economies and
financial markets increases the likelihood that events or conditions in one region or financial market may adversely impact issuers in
a different country, region or financial market. Securities in the Fund's portfolio may underperform due to inflation (or expectations
for inflation), interest rates, global demand for particular products or resources, natural disasters, climate-change and climate-related
events, pandemics, epidemics, terrorism, tariffs and trade wars, international conflict, regulatory events and governmental or quasi-governmental
actions.

The occurrence of global events similar to those in recent years, such as terrorist attacks around the world, natural disasters, social and political discord or debt crises and downgrades, among others, may result in market volatility and may have long term effects on both the U.S. and global financial markets. It is difficult to predict when similar events affecting the U.S. or global financial markets may occur, the effects that such events may have and the duration of those effects. Any such event(s) could have a significant adverse impact on the value and risk profile of the Fund's portfolio. It is not known how long such impacts, of the significant events described above, would last, but there could be a prolonged period of global economic slowdown, which may impact your Fund investment. Therefore, the Fund could lose money over short periods due to short-term market movements and over longer periods during more prolonged market downturns. During a general market downturn, multiple asset classes may be negatively affected. Changes in market conditions and interest rates can have the same impact on all types of securities and instruments. In times of severe market disruptions, you could lose your entire investment.

&nbsp;&nbsp;&nbsp;&nbsp;· *MLP Securities Risk:* Investments in securities of MLPs involve risks that differ from an investment
in common stock. Holders of units of MLPs have more limited control rights and limited rights to vote on matters affecting the MLP as
compared to holders of stock of a corporation. For example, MLP unit holders may not elect the general partner or the directors of the
general partner and the MLP unit holders have limited ability to remove an MLP's general partner. MLPs are controlled by their general
partners, which generally have conflicts of interest and limited fiduciary duties to the MLP, which may permit the general partner to
favor its own interests over the MLPs. The Fund derives some of its cash flow from investments in equity securities of MLPs. The amount
of cash that the Fund will have available to pay or distribute to you depends on the ability of the MLPs that the Fund invests in to make
distributions to their partners and the tax character of those distributions. Neither the Fund nor the Advisor has control over the actions
of underlying MLPs. The amount of cash that each individual MLP can distribute to its partners will depend on the amount of cash it generates
from operations, which will vary from quarter to quarter depending on factors affecting the natural gas infrastructure market generally
and on factors affecting the particular business lines of the MLP.

Available cash will also depend on an MLPs' level of operating costs (including incentive distributions to its general partner), level of capital expenditures, debt service requirements, acquisition costs (if any), fluctuations in working capital needs, and other factors. The Fund expects to generate significant investment income, and the Fund's investments may not distribute the expected or anticipated levels of cash, resulting in the risk that the Fund may not have the ability to make cash distributions as investors expect from MLP-focused investments.

&nbsp;&nbsp;&nbsp;&nbsp;· *MLP Tax Risks:* The benefit you are expected to derive from the Fund's investments in MLPs
depends largely on the MLPs being classified as partnerships for federal tax purposes. As a partnership, an MLP has no federal income
tax liability at the entity level. If, as a result of a change in current law or a change in an MLP's business, an MLP were treated
as a corporation for federal tax purposes, the MLP would be obligated to pay federal income tax on its taxable income at the corporate
tax rate and the amount of cash available for distribution would be reduced and part or all of the distributions the Fund receives might
be taxed entirely as dividend income. Therefore, treatment of one or more MLPs as a corporation for federal tax purposes could affect
the Fund's ability to meet its investment objective and would reduce the amount of cash available to pay or distribute to shareholders.
The tax treatment of publicly traded partnerships could be subject to potential legislative, judicial, or administrative changes and differing
interpretations, possibly on a retroactive basis. Any such changes could negatively impact the value of an investment in MLPs and therefore
the value of your investment in the Fund.

&nbsp;&nbsp;&nbsp;&nbsp;· *Non-Correlation Risk:* The Fund's return may not match the return of the Index for a number
of reasons, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The Fund incurs operating expenses not applicable to the Index, and incurs costs in buying and selling
securities, especially when rebalancing the Fund's securities holdings to reflect changes in the composition of the Index.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The Fund's use of representative sampling may cause the Fund's tracking error with respect
to the Index to be higher than would be the case if the Fund purchased all of the securities in the Index.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The performance of the Fund and the Index may vary due to asset valuation differences: the Fund may fair
value certain of the securities it holds and to the extent it calculates its NAV based on fair value prices, the Fund's ability
to track the Index may be adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o There may be differences between the Fund's portfolio and the Index as a result of legal restrictions,
cost or liquidity constraints. For example, the Index is not subject to the tax diversification requirements to which the Fund must adhere;
so the Fund may be required to deviate its investments from the securities and relative weightings of the Index. Similarly, the Fund may
not invest in certain securities included in the Index due to liquidity constraints. Liquidity constraints also may delay the Fund's
purchase or sale of securities included in the Index.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;o The investment activities of one or more of the Advisor's affiliates for their proprietary accounts
and for client accounts may also adversely impact the Fund's ability to track the Index. For example, in regulated industries, and
in corporate and regulatory ownership definitions, there may be limits on the aggregate amount of investment by affiliated investors that
may not be exceeded, or that may not be exceeded without the grant of a license or other regulatory or corporate consent or, if exceeded,
may cause the Advisor, the Fund or other client accounts to suffer disadvantages or business restrictions. As a result, the Fund may be
restricted in its ability to acquire particular securities due to positions held by the Advisor's affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;· *Passive Strategy/Index:* The Fund is managed with a passive investment strategy, attempting to track
the performance of an unmanaged index of underlying securities. This differs from an actively-managed fund, which typically seeks to outperform
a benchmark index. As a result, the Fund may hold constituent securities of the Index regardless of the current or projected performance
of a specific security or a particular industry, market sector, country or currency. Maintaining investments in securities regardless
of market conditions or the performance of individual securities could cause the Fund's return to be lower or higher than if the
Fund employed an active strategy.

&nbsp;&nbsp;&nbsp;&nbsp;· *REIT Risk:* Investments in securities of real estate companies involve risks including
among others, adverse changes in national, state or local real estate conditions: obsolescence of properties; changes in the availability,
cost and terms of mortgage funds; and the impact of changes in environmental laws.

The value of a REIT can depend on the structure of and cash flow generated by the REIT. In addition, like mutual funds, REITs have expenses, including advisory and administration fees, which are paid by their shareholders. Further, the failure of a company to qualify as a REIT or comply with applicable federal tax requirements could have adverse consequences for the Fund, including significantly reducing return to the Fund on its investment.

&nbsp;&nbsp;&nbsp;&nbsp;· *RIC Qualification Risk:* To qualify for treatment as a RIC under the Code, the
Fund must meet certain income source, asset diversification and annual distribution requirements. The Fund's MLP investments may
make it more difficult for the Fund to meet these requirements. The asset diversification requirements include a requirement that, at
the end of each quarter of each taxable year, not more than 25% of the value of the Fund's total assets is invested in the securities
(including debt securities) of one or more qualified publicly traded partnerships; the Fund anticipates that the MLPs in which it invests
will be qualified publicly traded partnerships. If the Fund's MLP investments exceed this 25% limitation, then the Fund would not
satisfy the diversification requirements and could fail to qualify as a RIC.

If, in any taxable year, the Fund fails to qualify as a RIC for any reason, the Fund would be taxed as an ordinary corporation and would become (or remain) subject to corporate income tax. The resulting corporate taxes could substantially reduce the Fund's net assets, the amount of income available for distribution and the amount of our distributions.

&nbsp;&nbsp;&nbsp;&nbsp;· *Royalty Trust Risk:* An investment in units of a royalty trust is not the equivalent
of owning shares in a corporation, as unitholders do not have the statutory rights normally associated with owning shares in a corporation.
Investments in royalty trusts will have varying degrees of risk depending on the sector and the underlying assets. They will also be subject
to general risks associated with business cycles, commodity prices, interest rates, and other economic factors. Typically, royalty trusts
are more volatile than fixed-income securities and preferred shares. The value of royalty trust units may decline significantly if
they are unable to meet distribution targets. To the extent that claims against a royalty trust are not satisfied by the trust, investors
in the trust (including the Fund if it is an investor in the Trust) could be held responsible for those claims. Certain, but not all,
jurisdictions have enacted legislation to protect investors from some of this liability. Royalty trusts may be subject to certain risks
associated with a decline in demand for crude oil, natural gas and refined petroleum products, which, in turn, could adversely affect
income and royalty trust revenues and cash flows. Factors that could lead to a decrease in market demand include a recession or other
adverse economic conditions, an increase in the market price of the underlying commodity, higher taxes or other regulatory actions that
increase costs, or a shift in consumer demand for such products. A rising interest rate environment could adversely impact the performance
of royalty trusts. Rising interest rates could limit the capital appreciation of royalty trusts because of the increased availability
of alternative investments at more competitive yields.

&nbsp;&nbsp;&nbsp;&nbsp;· *Sampling Risk:* The Fund's use of a representative sampling approach, if
used, could result in its holding a smaller number of securities than are in the Index. As a result, an adverse development with an issuer
of securities held by the Fund could result in a greater decline in NAV than would be the case if the Fund held all of the securities
in the Index. To the extent the assets in the Fund are smaller, these risks will be greater.

&nbsp;&nbsp;&nbsp;&nbsp;· *Sector Risk:* Each sector of the Index is subject to the additional risks associated
with concentrating its investments in companies in the market sector, and the Fund is subject to these risks as well. Additional underlying
sector specific risks include:

* *Real Estate Sector.* The Fund invests in companies in the real estate sector, including
REITs. Therefore, the Fund is subject to the risks associated with investing in real estate, which may include, but are not limited to,
possible declines in the value of real estate, adverse changes in national, state or local real estate conditions; obsolescence of properties;
changes in the availability, cost and terms of mortgage funds (including changes in interest rates), the impact of changes in environmental
laws, overbuilding in a real estate company's market, and environmental problems. Because REIT's have ongoing fees and expenses,
which may include management, operating and administration expenses, REIT shareholders including the Fund, will indirectly bear a proportionate
share of those expenses in addition to the expenses of the Fund.

* *Oils/Energy Sector.* The profitability of companies in the oils/energy sector is
related to worldwide energy prices, exploration, and production spending. These companies also are subject to risks of changes in exchange
rates, government regulation, world events, depletion of resources and economic conditions, as well as market, economic and political
risks of the countries where energy companies are located or do business. Oil and gas exploration and production can be significantly
affected by natural disasters. Oil exploration and production companies may be adversely affected by changes in exchange rates, interest
rates, government regulation, world events, and economic conditions. Oil exploration and production companies may be at risk for environmental
damage claims.

&nbsp;&nbsp;&nbsp;&nbsp;· *Small and Medium Capitalization Company Risk:* Investing in securities of small
and medium capitalization companies involves greater risk than is customarily associated with investing in larger, more established companies.
These companies' securities may be more volatile and less liquid than those of more established companies. These companies may be
more dependent on single products or key personnel, and may be newer than larger, more established companies with less information to
evaluate.

&nbsp;&nbsp;&nbsp;&nbsp;· *Sovereign Debt Securities Risk:* A sovereign debtor's willingness or ability
to repay principal and pay interest in a timely manner may be affected by, among other factors, its cash flow situation, the extent of
its foreign currency reserves, the availability of sufficient foreign exchange, the relative size of the debt service burden, the sovereign
debtor's policy toward principal international lenders and local political constraints. Sovereign debtors may also be dependent
on expected disbursements from foreign governments, multilateral agencies and other entities to reduce principal and interest arrearages
on their debt. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance or repay
principal or interest when due may result in the cancellation of third-party commitments to lend funds to the sovereign debtor, which
may further impair such debtor's ability or willingness to service its debts.

**<u>Portfolio Holdings Information</u>**

A description of the Trust's policies and procedures with respect to the disclosure of the Fund's portfolio holdings is available in the Fund's Statement of Additional Information ("SAI"), which is available at www.ArrowFunds.com.

**<u>Cybersecurity</u>**

The computer systems, networks and devices used by the Fund and its service providers to carry out routine business operations employ a variety of protections designed to prevent damage or interruption from computer viruses, network failures, computer and telecommunication failures, infiltration by unauthorized persons and security breaches. Despite the various protections utilized by the Fund and its service providers, systems, networks, or devices potentially can be breached. The Fund and its shareholders could be negatively impacted as a result of a cybersecurity breach.

Cybersecurity breaches can include unauthorized access to systems, networks, or devices; infection from computer viruses or other malicious software code; and attacks that shut down, disable, slow, or otherwise disrupt operations, business processes, or website access or functionality. Cybersecurity breaches may cause disruptions and impact the Fund's business operations, potentially resulting in financial losses; interference with the Fund's ability to calculate its NAV; impediments to trading; the inability of the Fund, the Advisor, and other service providers to transact business; violations of applicable privacy and other laws; regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, or additional compliance costs; as well as the inadvertent release of confidential information.

Similar adverse consequences could result from cybersecurity breaches affecting issuers of securities in which the Fund invests; counterparties with which the Fund engages in transactions; governmental and other regulatory authorities; exchange and other financial market operators, banks, brokers, dealers, insurance companies, and other financial institutions (including financial intermediaries and service providers for the Fund's shareholders); and other parties. In addition, substantial costs may be incurred by these entities in order to prevent any cybersecurity breaches in the future.

**Management of the Fund**

**<u>Investment Advisor</u>**

Arrow Investment Advisors, LLC, located at 6100 Chevy Chase Drive, Suite 100, Laurel MD 20707, serves as the Fund's investment advisor. Subject to the oversight of the Board, the Advisor is responsible for the overall management of the Fund's business affairs. The Advisor is responsible for selecting the Fund's investments according to the Fund's investment objective, policies and restrictions. The Advisor was established in February 2006. The Advisor has approximately $329 million in assets under management as of December 31, 2025. The Advisor has been managing the Fund since its inception.

Pursuant to an investment advisory agreement, the Fund pays the Advisor a unitary management fee equal to 0.75% of its average daily net assets. From time to time, the Advisor may waive all or a portion of its fee. During the fiscal year ended January 31, 2026, the Fund paid 0.75% of its average net assets to the Advisor.

The Advisor's unitary management fee is designed to pay the Fund's expenses and to compensate the Advisor for providing service for the Fund. Out of the unitary management fee, the Advisor pays substantially all expenses of the Fund, including the costs of transfer agency, custody, fund administration, legal, audit and other services, and Independent Trustees' fees, except for payments under the Fund's 12b-1 plan, brokerage expenses, taxes, interest (including borrowing costs and dividend expenses on securities sold short), litigation expense and other extraordinary expenses (including litigation to which the Trust or the Fund may be a party and indemnification of the Trustees and officers with respect thereto). The Advisor, and not Fund shareholders, would benefit from any reduction in fees paid for third-party services, including reductions based on increases in assets.

A discussion regarding the Board's basis for approving the renewal of the investment advisory agreement with respect to the Fund is available in the Form N-CSR dated January 31, 2026.

**<u>Portfolio Managers</u>**

The following individuals are primarily responsible for the day-to-day management of the Fund's portfolio:

**Joseph Barrato**

*Chief Executive Officer*

Joseph Barrato is a founding member of the Advisor. He has over 25 years of experience in the investment management industry, including six years with Rydex Investments, where he was responsible for the firm's research and developed momentum models with the Rydex sector funds.

Prior to Rydex Investments, Mr. Barrato spent 12 years at the Federal Reserve Board of Governors, as an analyst and senior financial examiner. He holds a bachelor's degree in business administration from The George Washington University, where he majored in finance and minored in accounting. Mr. Barrato's experience in the investment management industry gives him a strong understanding of the operational issues facing mutual funds and the regulatory framework under which investment companies must operate. Mr. Barrato has served as an Interested Trustee and the Chairman of the Board since the Trust was organized in August 2011.

**Jonathan S. Guyer**

*Portfolio Manager*

Jonathan Guyer joined the Advisor in October 2013 after spending seven years with Longview Funds Management, LLC. During his tenure at Longview, he served the Principal, Director of Research and Chief Investment Officer of the firm. Prior to Longview, Mr. Guyer spent seven years as the head of the Proprietary Hedge Fund Group of Alex Brown & Sons, Inc., followed by five years serving as the head of Alternative Investment Product Development for Legg Mason Wood Walker, Inc. Throughout his investment management career, he has had practical experience working with index design, active portfolio management, trading, manager selection, due diligence, marketing and fund administration.

Prior to his career in investment management, Mr. Guyer spent eight years in the audit industry, serving as a senior audit manager for commercial banks and trust companies. Mr. Guyer earned his bachelor's degree in Business Administration from the University of North Carolina-Wilmington.

The Fund's SAI provides additional information about each portfolio manager's compensation, other accounts managed by each portfolio manager, and each portfolio manager's ownership of securities in the Fund.

**Net Asset Value**

The Fund's NAV and offering price (NAV plus any applicable sales charges) is determined at the close of regular trading on the Exchange (normally 4:00 p.m. Eastern Time) on each day the Exchange is open (the "Valuation Time"). NAV is computed by determining the aggregate market value of all assets of the Fund, less its liabilities, divided by the total number of shares outstanding ((assets-liabilities)/number of shares = NAV). The Exchange is closed on weekends and New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The NAV takes into account the expenses and fees of the Fund, including management, administration, and distribution fees, which are accrued daily. The determination of NAV for the Fund for a particular day is applicable to all applications for the purchase of shares, as well as all requests for the redemption of shares, received by the Fund (or an authorized broker or agent, or its authorized designee) before the close of trading on the Exchange on that day. All valuations are subject to review by the Board or its Valuation Designee.

Generally, the Fund's securities are valued each day at the last quoted sales price on each security's primary exchange. Securities traded or dealt in upon one or more securities exchanges (whether domestic or foreign) for which market quotations are readily available and not subject to restrictions against resale shall be valued at the last quoted sales price on the primary exchange or, in the absence of a sale on the primary exchange, at the current bid price on such exchange. Money market securities maturing in 60 days or less will be valued at amortized cost. Securities that are not traded or dealt in any securities exchange (whether domestic or foreign) and for which over-the-counter market quotations are readily available generally shall be valued at last sale price or, in the absence of a sale, at the current bid price on such over-the-counter market. Debt securities not traded on an exchange may be valued at prices supplied by a pricing agent(s) based on broker or dealer supplied valuations or matrix pricing, a method of valuing securities by reference to the value of other securities with similar characteristics, such as rating, interest rate and maturity. If market quotations are not readily available, securities will be valued at their fair market value as determined using the "fair value" procedures approved by the Board. The Board has selected the Advisor as its Valuation Designee. Investment securities and other assets and liabilities denominated in a foreign currency, and income receipts and expense payments are translated into U.S. dollars using the prevailing exchange rate at the London market close. Any use of a different rate from the rates used by each Index Provider may adversely affect the Fund's ability to track its Index.

The Fund may use independent pricing services to assist in calculating the value of the Fund's securities. Securities traded on a foreign exchange which has not closed by the Valuation Time or for which the official closing prices are not available at the time the NAV is determined may use alternative market prices provided by a pricing service. Prices of foreign securities quoted in foreign currencies are translated into U.S. dollars at current rates. Even when market quotations are available, they may be stale or unreliable because the security is not traded frequently, trading on the security ceased before the close of the trading market or issuer specific events occurred after the security ceased trading or because of the passage of time between the close of the market on which the security trades and the close of the Exchange and when the Fund calculates its NAV. Issuer-specific events may cause the last market quotation to be unreliable. These events may include a merger or insolvency, events which affect a geographical area or an industry segment, such as political events or natural disasters, or market events, such as a significant movement in the U.S. market. Where market quotations are not readily available, including where the Advisor determines that the closing price of the security is unreliable, the Adviser will value the security at fair value in good faith using procedures approved by the Board.

Fair value pricing involves subjective judgments and it is possible that a fair value determination for a security is materially different than the value that could be realized upon the sale of the security. In addition, fair value pricing could result in a difference between the prices used to calculate the Fund's NAV and the prices used by the Index. This may adversely affect the Fund's ability to track the Index.

**Premium/Discount Information**

Investors buy and sell Shares in secondary market transactions through brokers at market prices and Shares will trade at market prices. The market price of Shares may be greater than, equal to, or less than NAV. Market forces of supply and demand, economic conditions and other factors may affect the trading prices of Shares. Information regarding how often Shares of the Fund traded at a price above (at a premium to) or below (at a discount to) the NAV of the Fund is available at www.ArrowFunds.com.

**How To Buy and Sell Shares**

Shares may be acquired or redeemed directly from the Fund only in Creation Units or multiples thereof. Only an Authorized Participant may engage in creation or redemption transactions directly with the Fund. Once created, shares generally trade in the secondary market in amounts less than a Creation Unit. Shares can be bought and sold on the Exchange throughout the trading day like shares of other publicly-traded companies.

Additional shareholder information, including how to buy and sell Shares, is available free of charge in the SAI or by calling toll free 1-877-277-6933 or visiting our website at www.ArrowFunds.com.

**<u>Buying and Selling Shares on the Secondary Market</u>**

You may buy and sell individual Shares only through a broker dealer in secondary market transactions on the Exchange. Shares are listed for trading on the Exchange under the symbol GYLD. There is no minimum investment required. Shares may only be bought and sold on the secondary market when the Exchange is open for trading. The Exchange is open for trading Monday through Friday and is closed on weekends and the following holidays, as observed: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

When buying or selling Shares through a broker, you will incur customary brokerage commissions and charges, and you may pay some or all of the spread between the bid and the offered price in the secondary market on each leg of a round trip (purchase and sale) transaction.

**<u>Creation and Redemption Transactions</u>**

Authorized Participants may acquire Shares directly from the Fund, and Authorized Participants may tender their Shares for redemption directly to the Fund, at NAV per Share only in large blocks, or Creation Units, of 75,000 Shares. Purchases and redemptions with cash instead of in-kind securities could cause the Fund to incur certain costs, which include brokerage costs, taxable gains or losses that it might not otherwise have incurred if it had been made by a redemption in-kind. These costs could be imposed on the Fund and, thus, decrease the Fund's NAV to the extent that the costs are not offset by a transaction fee payable by an Authorized Participant. Purchases and redemptions directly with the Fund must follow the Fund's procedures, which are described in the SAI.

The Fund may liquidate and terminate at any time without shareholder approval.

**<u>Share Trading Prices</u>**

Information regarding the intraday value of shares of the Fund, also known as the "indicative optimized portfolio value" ("IOPV"), is disseminated every 15 seconds throughout each trading day by the securities exchange on which the Fund's shares are listed or by market data vendors or other information providers. The IOPV is based on the current market value of the Fund's securities, including cash required to be deposited in exchange for a Creation Unit.

The IOPV is generally determined by using both current market quotations and price quotations obtained from broker-dealers and other market intermediaries that may trade in the Fund's portfolio securities. The IOPV may not reflect the exact composition of the Fund's current portfolio of securities at a particular point in time or the best possible valuation of each Fund's current portfolio. As a result, the IOPV should not be confused with the NAV, which is computed only once a day. The Fund is not involved in, or responsible for, the calculation or dissemination of the IOPV and the Fund does not make any warranty as to the accuracy of these values.

**<u>Book Entry</u>**

Shares are held in book entry form, which means that no stock certificates are issued. The Depository Trust Company ("DTC") or its nominee is the record owner of all outstanding Shares and is recognized as the owner of all Shares for all purposes.

Investors owning Shares are beneficial owners as shown on the records of DTC or its participants. DTC serves as the securities depository for all Shares.

Participants in DTC include securities brokers and dealers, banks, trust companies, clearing corporations and other institutions that directly or indirectly maintain a custodial relationship with DTC. As a beneficial owner of Shares, you are not entitled to receive physical delivery of stock certificates or to have Shares registered in your name, and you are not considered a registered owner of Shares. Therefore, to exercise any right as an owner of Shares, you must rely upon the procedures of DTC and its participants. These procedures are the same as those that apply to any other securities that you hold in book entry or "street name" form.

**Frequent Purchases and Redemptions of Shares**

The Board has not adopted a policy of monitoring for frequent trading activity because Shares are listed for trading on a national securities exchange.

**Distribution and Service Plan**

The Fund has adopted a distribution and service plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Fund is authorized to pay distribution fees to the Fund's distributor and other firms that provide distribution and shareholder services ("Service Providers"). If a Service Provider provides these services, the Fund may pay fees at an annual rate not to exceed 0.25% of average daily net assets, pursuant to Rule 12b-1 under the 1940 Act.

No distribution or service fees are currently paid by the Fund and there are no current plans to impose these fees. In the event Rule 12b-1 fees were charged, over time they would increase the cost of an investment in the Fund.

**Dividends, Other Distributions and Taxes**

Unlike interests in mutual funds, which typically are bought and sold from and to the fund only at closing NAVs, Shares are traded throughout the day in the secondary market on a national securities exchange on an intra-day basis and are created and redeemed in-kind and/or for cash in Creation Units at each day's next calculated NAV. In-kind arrangements are designed to protect ongoing shareholders from the adverse effects on the Fund's portfolio that could arise from frequent cash redemption transactions. In a conventional mutual fund, redemptions can have an adverse tax impact on taxable shareholders if the mutual fund needs to sell portfolio securities to obtain cash to meet net fund redemptions. These sales may generate taxable gains for the ongoing shareholders of the mutual fund, whereas the Shares' in-kind redemption mechanism generally will not lead to a tax event for the Fund or its ongoing shareholders.

Ordinarily, dividends from net investment income, if any, are declared and paid monthly by the Fund. The Fund distributes its net realized capital gains, if any, to shareholders annually.

Distributions in cash may be reinvested automatically in additional whole Shares only if the broker through whom you purchased Shares makes such option available.

**<u>Taxes</u>**

As with any investment, you should consider how your investment in Shares will be taxed. The tax information in this Prospectus is provided as general information. You should consult your own tax professional about the tax consequences of an investment in Shares.

Unless your investment in Shares is made through a tax-exempt entity or tax-deferred retirement account, such as an individual retirement account, you need to be aware of the possible tax consequences when:

&nbsp;&nbsp;&nbsp;&nbsp;· The Fund makes distributions,

&nbsp;&nbsp;&nbsp;&nbsp;· You sell your Shares listed on the Exchange, and

&nbsp;&nbsp;&nbsp;&nbsp;· You purchase or redeem Creation Units.

**<u>Taxes on Distributions</u>**

As stated above, dividends from net investment income, if any, ordinarily are declared and paid monthly by the Fund. The Fund may also pay a special distribution at the end of a calendar year to comply with federal tax requirements. Distributions from the Fund's net investment income, including net short-term capital gains, if any, are taxable to you as ordinary income, except that the Fund's dividends attributable to its "qualified dividend income" (*i.e*., dividends received on stock of most domestic and certain foreign corporations with respect to which the Fund satisfies certain holding period and other restrictions), if any, generally are subject to federal income tax for non-corporate shareholders who satisfy those restrictions with respect to their Fund shares at the tax rate for net capital gain—a maximum of 15% for taxable years beginning before 2014. A part of the Fund's dividends also may be eligible for the dividends-received deduction allowed to corporations—the eligible portion may not exceed the aggregate dividends the Fund receives from domestic corporations subject to federal income tax (excluding REITs) and excludes dividends from foreign corporations<sup>—</sup>subject to similar restrictions.

In general, your distributions are subject to federal income tax when they are paid, whether you take them in cash or reinvest them in the Fund (if that option is available).

Distributions reinvested in additional Shares through the means of a dividend reinvestment service, if available, will be taxable to shareholders acquiring the additional Shares to the same extent as if such distributions had been received in cash. Under current law, the maximum individual federal income tax rate applicable to long-term capital gains is either 15% or 20%, depending on whether the individual's income exceeds certain threshold amounts.

Distributions in excess of the Fund's current and accumulated earnings and profits are treated as a tax-free return of capital to the extent of your basis in the Shares and as capital gain thereafter. A distribution will reduce the Fund's NAV per Share and may be taxable to you as ordinary income or capital gain (as described above) even though, from an investment standpoint, the distribution may constitute a return of capital.

By law, the Fund is required to withhold at the backup withholding rate (currently 24%) form your distributions and redemption proceeds if you have not provided the Fund with a correct social security number or other taxpayer identification number and in certain other situations.

**<u>Taxes on Exchange-Listed Share Sales</u>**

Any capital gain or loss realized upon a sale of Shares is generally treated as long-term capital gain or loss if the Shares have been held for more than one year and as short-term capital gain or loss if the Shares have been held for one year or less. The ability to deduct capital losses from sales of Shares may be limited.

**<u>Taxes on Purchase and Redemption of Creation Units</u>**

An Authorized Participant who exchanges securities for Creation Units generally will recognize a gain or a loss equal to the difference between the market value of the Creation Units at the time of the exchange and the sum of the exchanger's aggregate basis in the securities surrendered plus any Cash Component it pays. An Authorized Participant who exchanges Creation Units for securities will generally recognize a gain or loss equal to the difference between the exchanger's basis in the Creation Units and the sum of the aggregate market value of the securities received plus any cash equal to the difference between the NAV of the Shares being redeemed and the value of the securities. The deductibility of losses, however, is subject to disallowance or limitation under various tax rules. Persons exchanging securities should consult their own tax advisor with respect to when a loss might be deductible.

Any capital gain or loss realized upon redemption of Creation Units is generally treated as long-term capital gain or loss if the Shares have been held for more than one year and as short-term capital gain or loss if the Shares have been held for one year or less.

If you purchase or redeem Creation Units, you will be sent a confirmation statement showing how many Shares you purchased or sold and at what price.

**<u>Additional Medicare Tax</u>**

Currently, an additional 3.8% Medicare tax is imposed on certain net investment income (including ordinary dividends and capital gain distributions received from the Fund and net gains from taxable dispositions of Fund 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 certain threshold amounts. The foregoing discussion summarizes some of the possible consequences under current federal tax law of an investment in the Fund. It is not a substitute for personal tax advice. Consult your personal tax advisor about the potential tax consequences of an investment in the Shares under all applicable tax laws. See "Taxes" in the SAI for more information.

If a shareholder purchases shares after the Fund has realized but not yet distributed income or capital gains, the purchase price may include the amount of the upcoming distribution, and the shareholder may pay full price for the shares and later receive a portion of the purchase price back as a taxable distribution. In such case, the shareholder will be taxed upon receipt of such distribution, even though the distribution effectively represents a return of a portion of the purchase price. This is known as "buying a dividend."

**Fund Service Providers**

Ultimus Fund Solutions, LLC is the Fund's administrator and fund accountant. It has its principal office at 225 Pictoria Drive, Suite 450, Cincinnati, OH 45246, and is primarily in the business of providing administrative, fund accounting and transfer agent services to retail and institutional mutual funds.

Brown Brothers Harriman & Co., located at 50 Post Office Square, Boston, MA 02110, is the Fund's transfer agent and custodian.

The Fund has entered into an ETF Distribution Agreement with Archer Distributors, LLC ("Archer"), located at 6100 Chevy Chase Drive, Suite 100, Laurel, MD 207, to serve as the distributor for the Fund. Archer, an affiliate of the Advisor, also provides marketing services to the Fund, including responsibility for all the Fund's marketing and advertising materials. Archer is a registered broker-dealers and member of the Financial Industry Regulatory Authority, Inc.

Thompson Hine LLP, located at 41 South High Street, Suite 1700, Columbus, OH 43215, serves as legal counsel to the Trust.

Cohen & Company, Ltd., located at 1350 Euclid Ave., Suite 800, Cleveland OH 44115, serves as the Fund's independent registered public accounting firm. The independent registered public accounting firm is responsible for auditing the annual financial statements of the Fund.

**Index Provider**

The Fund is based upon the Index. The Index is calculated and maintained by S&P Dow Jones Indexes (the "Index Provider"). The Index Provider is not affiliated with the Trust, the Advisor, or Archer. The Advisor has entered into a license agreement with the Index Provider. The Fund is entitled to use the Index pursuant to a sub-licensing agreement with the Advisor.

No entity that creates, compiles, sponsors or maintains the Index is or will be an affiliated person, as defined in Section 2(a)(3) of the 1940 Act, or an affiliated person of an affiliated person, of the Trust, the Advisor, Archer or a promoter of the Fund.

Neither the Advisor nor any affiliate of the Advisor has any right to influence the selection of the securities in the Index.

**<u>Disclaimer</u>**

The "The Dow Jones Global Composite Yield Index" (the "Index") is a product of S&P Dow Jones Indices LLC ("SPDJI"), and has been licensed for use by Arrow Investment Advisors, LLC ("Licensee"). Standard & Poor's<sup>®</sup> and S&P<sup>®</sup> are registered trademarks of Standard & Poor's Financial Services LLC ("S&P"); Dow Jones<sup>®</sup> is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Licensee . Arrow Dow Jones Global Yield ETF is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, any of their respective affiliates (collectively, "S&P Dow Jones Indices").

S&P Dow Jones Indices makes no representation or warranty, express or implied, to the owners of the Licensee's Product(s) or any member of the public regarding the advisability of investing in securities generally or in Licensee's Product(s) particularly or the ability of the INDEX to track general market performance. S&P Dow Jones Indices' only relationship to Licensee with respect to the INDEX is the licensing of the Index and certain trademarks, service marks and/or trade names of S&P Dow Jones Indices and/or its licensors. The INDEX is determined, composed and calculated by S&P Dow Jones Indices without regard to Licensee or the Licensee's Product(s). S&P Dow Jones Indices have no obligation to take the needs of Licensee or the owners of Licensee's Product(s) into consideration in determining, composing or calculating the INDEX. S&P Dow Jones Indices are not responsible for and have not participated in the determination of the prices, and amount of Licensee's Product(s) or the timing of the issuance or sale of Licensee's Product(s) or in the determination or calculation of the equation by which Licensee's Product(s) is to be converted into cash, surrendered or redeemed, as the case may be. S&P Dow Jones Indices have no obligation or liability in connection with the administration, marketing or trading of Licensee's Product(s).

There is no assurance that investment products based on the INDEX will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC is not an investment advisor. Inclusion of a security within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security, nor is it considered to be investment advice.

S&P DOW JONES INDICES DOES NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN.

S&P DOW JONES INDICES MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE LICENSEE'S PRODUCT(S), OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD-PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND LICENSEE, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.

**Other Information**

**<u>Investments by Investment Companies</u>**

Section 12(d)(1) of the 1940 Act restricts investments by investment companies in the securities of other investment companies, including the Shares. Registered investment companies are permitted to invest in the Fund beyond the limits set forth in Section 12(d)(1) subject to certain terms and conditions; or as set forth in Rule 12d1-4 under the 1940 Act, including that such investment companies enter into an agreement with the Trust on behalf of the Fund.

**<u>Continuous Offering</u>**

The method by which Creation Units of Shares are created and traded may raise certain issues under applicable securities laws. Because new Creation Units of Shares are issued and sold by the Fund on an ongoing basis, a "distribution," as such term is used in the Securities Act of 1933, as amended (the "Securities Act"), may occur at any point. Broker-dealers and other persons are cautioned that some activities on their part may, depending on the circumstances, result in their being deemed participants in a distribution in a manner which could render them statutory underwriters and subject them to the prospectus delivery requirement and liability provisions of the Securities Act.

For example, a broker-dealer firm or its client may be deemed a statutory underwriter if it takes Creation Units after placing an order with the Fund's distributor, breaks them down into constituent Shares and sells the Shares directly to customers or if it chooses to couple the creation of a supply of new Shares with an active selling effort involving solicitation of secondary market demand for Shares. A determination of whether one is an underwriter for purposes of the Securities Act must take into account all the facts and circumstances pertaining to the activities of the broker-dealer or its client in the particular case, and the examples mentioned above should not be considered a complete description of all the activities that could lead to a characterization as an underwriter.

Broker-dealer firms should also note that dealers who are not "underwriters" but are effecting transactions in Shares, whether or not participating in the distribution of Shares, are generally required to deliver a prospectus. This is because the prospectus delivery exemption in Section 4(3) of the Securities Act is not available in respect of such transactions as a result of Section 24(d) of the 1940 Act. As a result, broker-dealer firms should note that dealers who are not "underwriters" but are participating in a distribution (as contrasted with engaging in ordinary secondary market transactions) and thus dealing with the Shares that are part of an overallotment within the meaning of Section 4(3)(C) of the Securities Act, will be unable to take advantage of the prospectus delivery exemption provided by Section 4(3) of the Securities Act. For delivery of prospectuses to exchange members, the prospectus delivery mechanism of Rule 153 under the Securities Act is only available with respect to transactions on a national exchange.

**Dealers effecting transactions in the Shares, whether or not participating in this distribution, are generally required to deliver a Prospectus. This is in addition to any obligation of dealers to deliver a Prospectus when acting as underwriters.**

**<u>Householding</u>**

To reduce expenses, we mail only one copy of the Prospectus or summary prospectus and each annual and semi-annual report to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, please call the Fund at 1-877-277-6933 between the hours of 8:30 a.m. and 6:00 p.m. Eastern Time on days the Fund is open for business or contact your financial institution. We will begin sending you individual copies thirty days after receiving your request.

**Financial Highlights**

The financial highlights table below is intended to help you better understand the Fund's financial performance for the past five years. Certain information reflects financial results for a single share. Total return represents the rate you would have earned (or lost) on an investment in the Fund, assuming reinvestment of all dividends and distributions. The information for the fiscal year ended January 31, 2026, has been audited by Cohen & Company, Ltd., the Fund's independent registered public accounting firm, whose report, along with the Fund's financial statements, is included in the Fund's January 31, 2026 Annual Report, which is available upon request. Information for years prior to January 31, 2023, were audited by another independent registered public accounting firm.

Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout Each Year

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the**<br>**Year Ended**<br>**January 31, <br> 2026** | **For the**<br>**Year Ended**<br>**January 31,<br> 2025** | **For the**<br>**Year Ended**<br>**January 31,<br> 2024** | **For the**<br>**Year Ended**<br>**January 31,<br> 2023** | **For the**<br>**Year Ended**<br>**January 31,<br> 2022** |
| Net asset value, beginning of year | $12.76 | $13.34 | $13.70 | $14.73 | $13.57 |
| Activity from investment operations: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment income<sup>(1)</sup> | 0.77 | 0.79 | 0.69 | 0.53 | 0.89 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized and unrealized gain (loss) on investments and foreign currency | 1.20 | 0.30 | (0.12) | (0.94) | 1.08 |
| Total from investment operations | 1.97 | 1.09 | 0.57 | (0.41) | 1.97 |
| Less distributions from: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net investment income | (1.07) | (1.67) | (0.93) | (0.62) | (0.81) |
| Total distributions | (1.07) | (1.67) | (0.93) | (0.62) | (0.81) |
| Net asset value, end of year | $13.66 | $12.76 | $13.34 | $13.70 | $14.73 |
| Total return<sup>(3)</sup> | 16.22%<sup>(4)</sup> | 8.56%<sup>(4)</sup> | 4.72%<sup>(4)</sup> | (2.63)%<sup>(4)</sup> | 14.60%<sup>(4)</sup> |
| Net assets, at end of year (000s) | $26637 | $20099 | $22005 | $27738 | $36468 |
| Ratio of net expenses to average net assets | 0.75% | 0.75% | 0.75% | 0.75% | 0.75% |
| Ratio of net investment income to <br> average net assets | 5.86% | 5.94% | 5.33% | 3.96% | 5.98% |
| Portfolio Turnover Rate<sup>(2)</sup> | 91% | 95% | 78% | 59% | 66% |

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&nbsp;&nbsp;&nbsp;&nbsp;(1) Per share amounts calculated using the average shares method, which more appropriately presents the
per share data for each year.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Portfolio turnover rate excludes portfolio securities received or delivered as a result of processing
capital share transactions in Creation Units.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Total return is calculated assuming a purchase of shares at net asset value on the first day and a
sale at net asset value on the last day of the period. Distributions are assumed, for the purpose of this calculation, to be reinvested
at the ex-dividend date net asset value per share on their respective payment dates.

&nbsp;&nbsp;&nbsp;&nbsp;(4) Includes adjustments in accordance with accounting principles generally accepted in the United States
of America and, consequently, the net asset value for financial reporting purposes and the returns based upon those net asset values may
differ from the net asset values and returns for shareholder transactions.

**Privacy Notice**

Rev. November 2011

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| | | | |
|:---|:---|:---|:---|
| **FACTS** | **WHAT DOES ARROW ETF TRUST DO WITH YOUR PERSONAL INFORMATION?** | **WHAT DOES ARROW ETF TRUST DO WITH YOUR PERSONAL INFORMATION?** | **WHAT DOES ARROW ETF TRUST DO WITH YOUR PERSONAL INFORMATION?** |
| **Why?** | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
| **What?** | The types of personal information we collect and share depend on the product or service you have with us. This information can include:<br> · Social Security number · Purchase History · Assets · Account Balances · Retirement Assets <br>· Account Transactions · Transaction History · Wire Transfer Instructions · Checking Account Information <br> When you are no longer our customer, we continue to share your information as described in this notice. | The types of personal information we collect and share depend on the product or service you have with us. This information can include:<br> · Social Security number · Purchase History · Assets · Account Balances · Retirement Assets <br>· Account Transactions · Transaction History · Wire Transfer Instructions · Checking Account Information <br> When you are no longer our customer, we continue to share your information as described in this notice. | The types of personal information we collect and share depend on the product or service you have with us. This information can include:<br> · Social Security number · Purchase History · Assets · Account Balances · Retirement Assets <br>· Account Transactions · Transaction History · Wire Transfer Instructions · Checking Account Information <br> When you are no longer our customer, we continue to share your information as described in this notice. |
| **How?** | All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons Arrow ETF Trust chooses to share; and whether you can limit this sharing. | All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons Arrow ETF Trust chooses to share; and whether you can limit this sharing. | All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information; the reasons Arrow ETF Trust chooses to share; and whether you can limit this sharing. |
| **Reasons we can share your personal information** | **Reasons we can share your personal information** | **Does Arrow ETF <br> Trust share?** | **Can you limit <br> this sharing?** |
| **For our everyday business purposes –**<br> such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | **For our everyday business purposes –**<br> such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No |
| **For our marketing purposes –**<br> to offer our products and services to you | **For our marketing purposes –**<br> to offer our products and services to you | No | We don't share |
| **For joint marketing with other financial companies** | **For joint marketing with other financial companies** | No | We don't share |
| **For our affiliates' everyday business purposes –**<br> information about your transactions and experiences | **For our affiliates' everyday business purposes –**<br> information about your transactions and experiences | No | We don't share |
| **For our affiliates' everyday business purposes –**<br> information about your creditworthiness | **For our affiliates' everyday business purposes –**<br> information about your creditworthiness | No | We don't share |
| **For nonaffiliates to market to you** | **For nonaffiliates to market to you** | No | We don't share |
| **Questions?** | Call 1-877-277-6933 | Call 1-877-277-6933 | Call 1-877-277-6933 |

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| | |
|:---|:---|
| <br>**Who we are** | <br>**Who we are** |
| **Who is providing this notice?** | Arrow ETF Trust |
| **What we do** | **What we do** |
| **How does Arrow ETF Trust protect my personal information?** | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.<br>Our service providers are held accountable for adhering to strict policies and procedures to prevent any misuse of your nonpublic personal information. |
| **How does Arrow ETF Trust collect my personal information?** | We collect your personal information, for example, when you<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Open an account<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Provide account information<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Give us your contact information<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Make deposits or withdrawals from your account<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Make a wire transfer<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Tell us where to send the money<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Tells us who receives the money<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Show your government-issued ID<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Show your driver's license<br> We also collect your personal information from other companies. |
| **Why can't I limit all sharing?** | Federal law gives you the right to limit only<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Sharing for affiliates' everyday business purposes – information about your creditworthiness<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Affiliates from using your information to market to you<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ Sharing for nonaffiliates to market to you<br> State laws and individual companies may give you additional rights to<br> limit sharing. |
| **Definitions** | **Definitions** |
| **Affiliates** | Companies related by common ownership or control. They can be financial and nonfinancial companies.<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ *Arrow ETF Trust does not share with our affiliates.* |
| **Nonaffiliates** | Companies not related by common ownership or control. They can be financial and nonfinancial companies<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ *Arrow ETF Trust does not share with nonaffiliates so they can market to you.* |
| **Joint marketing** | A formal agreement between nonaffiliated financial companies that together market financial products or services to you.<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪ *Arrow ETF Trust does not jointly market.* |

---

**Arrow Dow Jones Global Yield ETF**

---

| | |
|:---|:---|
| &nbsp;&nbsp;**Advisor** | &nbsp;&nbsp; **Arrow Investment Advisors, LLC**<br> 6100 Chevy Chase Drive, Suite 100<br> Laurel, MD 20707 |
| &nbsp;&nbsp;**Distributor** | &nbsp;&nbsp; **Archer Distributors, LLC**<br> 6100 Chevy Chase Drive, Suite 100, Laurel, MD 20707 |
| &nbsp;&nbsp;**Legal Counsel** | &nbsp;&nbsp; **Thompson Hine LLP**<br> 41 South High Street, Suite 1700<br> Columbus, OH 43215 |
| &nbsp;&nbsp;**Administrator** | &nbsp;&nbsp; **Ultimus Fund Solutions, LLC**<br> 225 Pictoria Drive, Suite 450<br> Cincinnati, OH 45246 |
| &nbsp;&nbsp;**Independent Registered Public Accounting Firm** | &nbsp;&nbsp; **Cohen & Company, Ltd.**<br> 1350 Euclid Ave., Suite 800, Cleveland OH 44115 |
| &nbsp;&nbsp;**Custodian and Transfer Agent** | &nbsp;&nbsp; **Brown Brothers Harriman & Co.**<br> 50 Post Office Square<br> Boston, MA 02110 |

---

Additional information about the Fund, including the Fund's policies and procedures with respect to disclosure of the Fund's portfolio holdings, is included in the Fund's SAI dated June 1, 2026. The SAI provides more details about the Fund's policies and management. The SAI is incorporated by reference into this Prospectus (i.e., legally made a part of this Prospectus). Additional information about the Fund's investments is available in the Fund's Annual and Semi-Annual Reports to Shareholders.

To obtain a free copy of the SAI, the annual report, the semi-annual report, to request other information about the Fund, or to make shareholder inquiries about the Fund, please call 1-877-277-6933 or visit the Fund's website, at www.ArrowFunds.com. You may also write to:

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| | |
|:---|:---|
| **Overnight Mail:**<br> Arrow Funds<br> Arrow Dow Jones Global Yield ETF<br> c/o Ultimus Fund Solutions, LLC<br> 225 Pictoria Dr, Suite 450<br> Cincinnati, OH 45246 | **Regular Mail:**<br> Arrow Funds<br> Arrow Dow Jones Global Yield ETF<br> c/o Ultimus Fund Solutions<br> PO Box 46707<br> Cincinnati, OH 45246 |

---

Reports and other information about the Fund are available on the EDGAR Database on the SEC's website at www.sec.gov. Copies of the information may be obtained, after paying a duplicating fee, by electronic request at the following E-mail address: publicinfo@sec.gov.

Investment Company Act File # 811-22624

![[arrowprospectusv2002.gif]](image_002.jpg)

**Arrow Dow Jones Global Yield ETF**

GYLD

*a series of Arrow ETF Trust*

*Listed and traded on:*

*New York Stock Exchange LLC*

STATEMENT OF ADDITIONAL INFORMATION

June 1, 2026

This Statement of Additional Information ("SAI") is not a prospectus and should be read in conjunction with the prospectus of the Arrow Dow Jones Global Yield ETF (the "Fund") dated June 1, 2026. The Fund's Prospectus is hereby incorporated by reference, which means it is legally part of this document. You can obtain copies of the Fund's Prospectus, annual, or semi-annual reports without charge by contacting the Fund's Transfer Agent, Brown Brothers Harriman and Co., located at 50 Post Office Square, Boston, MA 02110 or by calling toll free 1-877-277-6933. You may also obtain a Prospectus, and the annual report, or semi-annual report by visiting our website at <u>www.ArrowFunds.com</u>.

<u>**TABLE OF CONTENTS**</u>

---

| | |
|:---|:---|
| THE FUND | 1 |
| TYPES OF INVESTMENTS | 1 |
| INVESTMENT RESTRICTIONS | 13 |
| POLICIES AND PROCEDURES FOR DISCLOSURE OF PORTFOLIO HOLDINGS | 14 |
| MANAGEMENT | 15 |
| CONTROL PERSONS AND PRINCIPAL HOLDERS | 18 |
| INVESTMENT ADVISOR | 18 |
| PORTFOLIO MANAGERS | 20 |
| DISTRIBUTION OF SHARES | 21 |
| ALLOCATION OF PORTFOLIO BROKERAGE | 22 |
| PORTFOLIO TURNOVER | 23 |
| OTHER SERVICE PROVIDERS | 23 |
| DESCRIPTION OF SHARES | 25 |
| BOOK ENTRY ONLY SYSTEM | 25 |
| ANTI-MONEY LAUNDERING PROGRAM | 26 |
| PURCHASE, REDEMPTION AND PRICING OF SHARES | 26 |
| TAX STATUS | 32 |
| INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 36 |
| LEGAL COUNSEL | 36 |
| FINANCIAL STATEMENTS | 36 |
| APPENDIX A | A-1 |
| APPENDIX B | B-1 |

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**THE FUND**

The Arrow Dow Jones Global Yield ETF is a diversified series of Arrow ETF Trust, a Delaware statutory trust organized on August 29, 2011 (the "Trust"). The Trust is registered as an open-end management investment company. The Trust is governed by its Board of Trustees (the "Board").

Under the Trust's Trust Instrument, each Trustee will continue in office until the termination of the Trust or his/her earlier death, incapacity, resignation or removal. Shareholders can remove a Trustee to the extent provided by the Investment Company Act of 1940, as amended (the "1940 Act") and the rules and regulations promulgated thereunder. Vacancies may be filled by a majority of the remaining Trustees, except insofar as the 1940 Act may require the election by shareholders. As a result, normally no annual or regular meetings of shareholders will be held unless matters arise requiring a vote of shareholders under the Trust Instrument or the 1940 Act.

The Fund's investment objective is to seek investment results that generally correspond, before fees and expenses, to the price and yield performance of the Dow Jones Global Composite Yield Index (the "Underlying Index"). The Fund's restrictions and policies are more fully described here and in the Prospectus. The Board may start other series and offer shares of a new fund under the Trust at any time. The Fund is managed by Arrow Investment Advisors, LLC (the "Advisor").

The Fund issues and redeems shares ("Shares") at net asset value ("NAV") only in aggregations of 75,000 Shares (each a "Creation Unit"). The Fund issues and redeems Creation Units principally in exchange for an in-kind deposit of a basket of designated securities (the "Deposit Securities"), together with the deposit of a specified cash payment (the "Cash Component"), plus a transaction fee. The Fund is listed on New York Stock Exchange LLC (the "Exchange"). Shares trade on the Exchange at market prices that may be below, at, or above NAV. In the event of the liquidation of the Fund, a share split, reverse split or similar event, the Trust may revise the number of Shares in a Creation Unit.

The Fund reserves the right to offer creations and redemptions of Shares for cash. In addition, Shares may be issued in advance of receipt of Deposit Securities subject to various conditions, including a requirement to maintain on deposit with the Trust cash equal to up to 115% of the market value of the missing Deposit Securities. In each instance of such cash creations or redemptions, transaction fees may be imposed and may be higher than the transaction fees associated with in-kind creations or redemptions. See PURCHASE AND REDEMPTION OF CREATION UNITS below.

<u>Exchange Listing and Trading</u>

Shares are listed for trading on the Exchange and trade throughout the day on the Exchange. In order to provide additional information regarding the indicative value of Shares of the Fund, a market data vendor or other information provider will disseminate every 15 seconds through a data service or other widely disseminated means an updated "Indicative Optimized Portfolio Value" ("IOPV") for the Fund as calculated by an information provider or market data vendor. The Trust is not involved in or responsible for any aspect of the calculation or dissemination of the IOPV and makes no representation or warranty as to the accuracy of the IOPV.

The information provider or market data vendor calculates the IOPV during hours of trading on the Exchange by dividing the "Estimated Fund Value" as of the time of the calculation by the total number of outstanding Shares. "Estimated Fund Value" is the sum of the estimated amount of cash held in the Fund's portfolio, the estimated amount of accrued interest owing to the Fund and the estimated value of the securities held in the Fund's portfolio, minus the estimated amount of liabilities. The IOPV is calculated based on the same portfolio holdings disclosed on the Fund's website. In determining the estimated value for each of the component securities, the IOPV uses last sale, market prices or other methods that would be considered appropriate for pricing equity securities held by registered investment companies.

The Exchange may, but is not required to, remove the Shares of the Fund from listing if: (i) following the initial 12-month period beginning at the commencement of trading of the Fund, there are fewer than 50 beneficial owners of Shares (for each Cboe-listed Fund, there must be fewer than 50 beneficial owners for at least 30 consecutive trading days); (ii) the Fund is no longer eligible to operate in reliance on Rule 6c-11 under the 1940 Act; (iii) the Fund fails to meet certain continued listing standards of an Exchange; or (iv) such other event shall occur or condition shall exist that, in the opinion of the Exchange, makes further dealings on the Exchange inadvisable. The Exchange will remove the Shares of the Fund from listing and trading upon termination of the Fund.

**TYPES OF INVESTMENTS**

The investment objective of the Fund and a description of its principal investment strategies are set forth under "Risk/Return Summary" in the Prospectus. The Fund's investment objective and its principal investment strategies are not fundamental and may be changed without the approval of a majority of the Fund's outstanding voting securities. The following pages contain more detailed information about the types of instruments in which the Fund may invest, strategies the Advisor may employ in pursuit of the Fund's investment objective and a summary of related risks.

<u>Security Ratings</u>

Rated Securities. The Fund's investments in certain equity securities, such as preferred securities and convertible securities, and in debt securities are subject to the credit risk relating to the financial condition of the issuers of the securities that the Fund holds. The Fund may invest in convertible and other debt securities that are investment or non-investment grade. Investment grade means rated in the top four long-term rating categories, or unrated and determined by the Advisor to be of comparable quality. The Fund may also purchase unrated securities if, at the time of purchase, the Advisor believes that they are of comparable quality to rated securities that the Fund may purchase. Standard & Poor's Ratings Services ("S & P"), Moody's Investors Service, Inc. ("Moody's") and other organizations provide ratings of the credit quality of debt obligations, including convertible securities. A description of the range of ratings assigned to various types of bonds and other securities is included in Appendix B to this SAI. The Fund may use these ratings to determine whether to purchase, sell or hold a security. Because a ratings downgrade often results in a reduction in the market price of the security, sale of a downgraded security may result in a loss. To the extent that a rating changes as a result of changes in an organization or its rating systems, the Advisor may attempt to substitute comparable ratings or to use such information to determine whether the Fund should continue to hold the obligation. Credit ratings attempt to evaluate the safety of principal and interest payments and do not evaluate the risks of fluctuations in market value. Ratings are general and are not absolute standards of quality. The rating of an issuer is a view of potential developments related to the issuer and may not necessarily reflect actual outcomes. An issuer's current financial condition may be better or worse than a rating indicates.

Unrated Securities. The Fund may also invest in unrated debt and similar securities. Unrated debt, while not necessarily lower in quality than rated securities, may not be as actively traded as rated securities. Because of the size and perceived demand for the issue, among other factors, certain issuers may decide not to pay the cost of getting a rating for their bonds. The creditworthiness of the issuer, as well as any financial institution or other party responsible for payments on the security, will be analyzed to determine whether to purchase unrated bonds.

<u>Equity Securities</u>

Equity securities in which the Fund invests include common stocks, preferred stocks and securities convertible into common stocks, such as convertible bonds, warrants, rights and options. The value of equity securities varies in response to many factors, including the activities and financial condition of individual companies, the business market in which individual companies compete and general market and economic conditions. Equity securities fluctuate in value, often based on factors unrelated to the value of the issuer of the securities, and such fluctuations can be significant.

<u>Common Stock</u>

Common stock represents an equity (ownership) interest in a company, and usually possesses voting rights and earns dividends. Dividends on common stock are not fixed but are declared at the discretion of the issuer. Common stock generally represents the riskiest investment in a company. In addition, common stock generally has the greatest appreciation and depreciation potential because increases and decreases in earnings are usually reflected in a company's stock price.

<u>Preferred Stock</u>

The Fund may invest in preferred stock with a minimum credit rating of investment grade. Preferred stock is a class of stock having a preference over common stock as to the payment of dividends and the recovery of investment should a company be liquidated, although preferred stock is usually junior to the debt securities of the issuer. Preferred stock typically does not possess voting rights and its market value may change based on changes in interest rates.

The Fund may also purchase trust preferred securities, also known as "trust preferreds," which are preferred stocks issued by a special purpose trust subsidiary backed by subordinated debt of the corporate parent. An issuer creates trust preferred securities by creating a trust and issuing debt to the trust. The trust in turn issues trust preferred securities. Trust preferred securities are hybrid securities with characteristics of both subordinated debt and preferred stock. Such characteristics include long maturities (typically 30 years or more), early redemption by the issuer, periodic fixed or variable interest payments, and maturities at face value. In addition, trust preferred securities issued by bank holding company may allow deferral of interest payments for up to 5 years. Holders of trust preferred securities have limited voting rights to control the activities of the trust, and no voting rights with respect to the parent company.

The fundamental risk of investing in common and preferred stock is the risk that the value of the stock might decrease. Stock values fluctuate in response to the activities of an individual company or in response to general market and/or economic conditions. Historically, common stocks have provided greater long-term returns and have entailed greater short-term risks than preferred stocks, fixed-income securities and money market investments. The market value of all securities, including common and preferred stocks, is based upon the market's perception of value and not necessarily the book value of an issuer or other objective measures of a company's worth.

<u>Convertible Securities</u>

The Fund may invest in convertible securities with a minimum credit rating of investment grade. Convertible securities include fixed income securities that may be exchanged or converted into a predetermined number of shares of the issuer's underlying common stock at the option of the holder during a specified period. Convertible securities may take the form of convertible preferred stock, convertible bonds or debentures, units consisting of "usable" bonds and warrants or a combination of the features of several of these securities. Convertible securities are senior to common stocks in an issuer's capital structure, but are usually subordinated to similar non-convertible securities.

While providing a fixed-income stream (generally higher in yield than the income derivable from common stock but lower than that afforded by a similar nonconvertible security), a convertible security also gives an investor the opportunity, through its conversion feature, to participate in the capital appreciation of the issuing company depending upon a market price advance in the convertible security's underlying common stock.

<u>Warrants</u>

The Fund may invest in warrants. Warrants are options to purchase common stock at a specific price (usually at a premium above the market value of the optioned common stock at issuance) valid for a specific period of time. Warrants may have a life ranging from less than one year to twenty years, or they may be perpetual. However, most warrants have expiration dates after which they are worthless. In addition, a warrant is worthless if the market price of the common stock does not exceed the warrant's exercise price during the life of the warrant. Warrants have no voting rights, pay no dividends, and have no rights with respect to the assets of the corporation issuing them. The percentage increase or decrease in the market price of the warrant may tend to be greater than the percentage increase or decrease in the market price of the optioned common stock.

<u>Foreign Securities</u>

The Fund may invest in foreign securities directly or through exchange traded funds ("ETFs") and other investment companies that hold a portfolio of foreign securities. Investing in securities of foreign companies and countries involves certain considerations and risks that are not typically associated with investing in U.S. government securities and securities of domestic companies. There may be less publicly available information about a foreign issuer than a domestic one, and foreign companies are not generally subject to uniform accounting, auditing and financial standards and requirements comparable to those applicable to U.S. companies. There may also be less government supervision and regulation of foreign securities exchanges, brokers and listed companies than exists in the United States. Interest and dividends paid by foreign issuers may be subject to withholding and other foreign taxes, which may decrease the net return on such investments as compared to dividends and interest paid to the Fund by domestic companies or the U.S. government. There may be the possibility of expropriations, seizure or nationalization of foreign deposits, confiscatory taxation, political, economic or social instability or diplomatic developments that could affect assets of the Fund held in foreign countries. Finally, the establishment of exchange controls or other foreign governmental laws or restrictions could adversely affect the payment of obligations.

To the extent the Fund's currency exchange transactions do not fully protect the Fund against adverse changes in currency exchange rates, decreases in the value of currencies of the foreign countries in which the Fund will invest relative to the U.S. dollar will result in a corresponding decrease in the U.S. dollar value of the Fund's assets denominated in those currencies (and possibly a corresponding increase in the amount of securities required to be liquidated to meet distribution requirements). Conversely, increases in the value of currencies of the foreign countries in which the Fund invests relative to the U.S. dollar will result in a corresponding increase in the U.S. dollar value of the Fund's assets (and possibly a corresponding decrease in the amount of securities to be liquidated).

<u>Foreign Economy Risk</u>

The economies of certain foreign markets often do not compare favorably with that of the U.S. with respect to such issues as growth of gross domestic product, reinvestment of capital, resources, and balance of payments positions. Certain foreign economies may rely heavily on particular industries or foreign capital and are more vulnerable to diplomatic developments, the imposition of economic sanctions against a particular country or countries, changes in international trading patterns, trade barriers, and other protectionist or retaliatory measures. Investments in foreign markets may also be adversely affected by governmental actions such as the imposition of capital controls, nationalization of companies or industries, expropriation of assets, or the imposition of punitive taxes. In addition, the governments of certain countries may prohibit or impose substantial restrictions on foreign investing in their capital markets or in certain industries. Any of these actions could severely affect security prices, impair the Fund's ability to purchase or sell foreign securities, or transfer the Fund's assets back into the U.S., or otherwise adversely affect the Fund's operations. Other foreign market risks include foreign exchange controls, difficulties in pricing securities, defaults on foreign government securities, difficulties in enforcing favorable legal judgments in foreign courts, and political and social instability. Legal remedies available to investors in certain foreign countries may be less extensive than those available to investors in the U.S. or other foreign countries. Foreign corporate governance may not be as robust as in the U.S. As a result, protections for minority investors may not be strong, which could affect security prices.

<u>Currency Risk and Exchange Risk</u>

Securities in which the Fund invests may be denominated or quoted in currencies other than the U.S. dollar. Changes in foreign currency exchange rates will affect the value of these securities. Generally, when the U.S. dollar rises in value against a foreign currency, an investment in a security denominated in that currency loses value because the currency is worth fewer U.S. dollars. Similarly, when the U.S. dollar decreases in value against a foreign currency, an investment in a security denominated in that currency gains value because the currency is worth more U.S. dollars. This risk is generally known as "currency risk" which is the possibility that a stronger U.S. dollar will reduce returns for U.S. investors investing overseas. Foreign currencies also involve the risk that they will be devalued or replaced, adversely affecting the Fund's investments.

Governmental Supervision and Regulation/Accounting Standards. Many foreign governments supervise and regulate stock exchanges, brokers and the sale of securities to a lesser extent than the U.S. government. Some countries may not have laws to protect investors the way that the U.S. securities laws do. Accounting standards in other countries are not necessarily the same as in the U.S. If the accounting standards in another country do not require as much disclosure or detail as U.S. accounting standards, it may be harder to assess a company's financial condition.

Certain Risks of Holding Fund Assets Outside the U.S. Foreign securities in which the Fund invests are generally held outside the U.S. in foreign banks and securities depositories. The custodian is the Fund's "foreign custody manager" as provided in Rule 17f-5 under the 1940 Act. The "foreign custody manager" is responsible for determining that the Fund's directly-held foreign assets will be subject to reasonable care, based on standards applicable to custodians in relevant foreign markets. However, certain foreign banks and securities depositories may be recently organized or new to the foreign custody business. They may also have operations subject to limited or no regulatory oversight.

Also, the laws of certain countries may put limits on the Fund's ability to recover its assets if a foreign bank or depository or issuer of a security or an agent of any of the foregoing goes bankrupt. In addition, it likely will be more expensive for the Fund to buy, sell and hold securities in certain foreign markets than it is in the U.S. market due to higher brokerage, transaction, custody and/or other costs. The increased expense of investing in foreign markets reduces the amount the Fund can earn on its investments. Settlement and clearance procedures in certain foreign markets differ significantly from those in the U.S.

Foreign settlement and clearance procedures and trade regulations also may involve certain risks (such as delays in payment for or delivery of securities) not typically involved with the settlement of U.S. investments. Communications between the U.S. and emerging market countries may be unreliable, increasing the risk of delayed settlements or losses of security certificates. Settlements in certain foreign countries at times have not kept pace with the number of securities transactions. The problems may make it difficult for the Fund to carry out transactions. If the Fund cannot settle or is delayed in settling a purchase of securities, the Fund may miss investment opportunities and certain of its assets may be uninvested with no return earned thereon for some period. If the Fund cannot settle or is delayed in settling a sale of securities, directly or indirectly, it may lose money if the value of the security then declines or, if it has contracted to sell the security to another party, the Fund could be liable to that party for any losses incurred.

In addition, dividends payable on foreign securities may be subject to foreign withholding taxes, thereby reducing the income available for distribution to shareholders. Some foreign brokerage commissions and custody fees are higher than those in the United States.

<u>Emerging Markets</u>

If the Fund invests in emerging markets, an investment in the Fund may have the following additional risks:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Information about the companies in these countries is not always readily available;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Stocks of companies traded in these countries may be less liquid and the prices of these stocks may be more
 volatile than the prices of the stocks in more established markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Greater political and economic uncertainties exist in emerging markets than in developed foreign markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· The securities markets and legal systems in emerging markets may not be well developed and may not provide
 the protections and advantages of the markets and systems available in more developed countries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Very high inflation rates may exist in emerging markets and could negatively impact a country's economy
 and securities markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Emerging markets may impose restrictions on the Fund's ability to repatriate investment income or capital
 and thus, may adversely affect the operations of the Fund;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Certain emerging markets impose constraints on currency exchange and some currencies in emerging may have
 been devalued significantly against the U.S. dollar;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Governments of some emerging markets exercise substantial influence over the private sector and may own or
 control many companies. As such, governmental actions could have a significant effect on economic conditions in emerging markets, which,
 in turn, could affect the value of the Fund's investments; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Emerging markets may be subject to less government supervision and regulation of business and industry practices,
 stock exchanges, brokers and listed companies.

For these and other reasons, the prices of securities in emerging markets can fluctuate more significantly than the prices of securities of companies in developed countries. The less developed the country, the greater effect these risks may have on an investment in the Fund. As a result, an investment in the Fund may exhibit a higher degree of volatility than either the general domestic securities market or the securities markets of developed foreign countries.

<u>Depositary Receipts</u>

To the extent the Fund invests in stocks of foreign corporations, the Fund's investment in such stocks may also be in the form of Depositary Receipts or other securities convertible into securities of foreign issuers. Depositary Receipts may not necessarily be denominated in the same currency as the underlying securities into which they may be converted. American Depositary Receipts ("ADRs") are receipts typically issued by an American bank or trust company that evidence ownership of underlying securities issued by a foreign corporation. European Depositary Receipts ("EDRs") are receipts issued in Europe that evidence a similar ownership arrangement. Global Depositary Receipts ("GDRs") are receipts issued throughout the world that evidence a similar arrangement. Generally, ADRs, in registered form, are designed for use in the U.S. securities markets, and EDRs, in bearer form, are designed for use in European securities markets. GDRs are tradable both in the United States and in Europe and are designed for use throughout the world. Depositary Receipts will not necessarily be denominated in the same currency as their underlying securities.

The Fund will not invest in any unlisted Depositary Receipts or any Depositary Receipt that the Advisor deems to be illiquid or for which pricing information is not readily available. In addition, the Fund will generally invest in sponsored Depositary Receipts, but may invest in unsponsored Depositary Receipts from time to time. The issuers of unsponsored Depositary Receipts are not obligated to disclose material information in the United States, and, therefore, there may be less information available regarding such issuers and there may not be a correlation between such information and the market value of the Depositary Receipts. The use of Depositary Receipts may increase tracking error relative to the Underlying Index.

<u>Real Estate Investment Trusts ("REITs")</u>

The Fund may purchase interests in REITs. A REIT is a company that pools investor funds to invest primarily in income producing real estate or real estate related loans or interests. A REIT is not taxed on income distributed to its shareholders if, among other things, it distributes substantially all of its taxable income (other than net capital gain) for each taxable year.

Investment in REITs may be the most practical available means for the Fund to invest in the real estate industry. As a shareholder in a REIT, the Fund would bear its ratable share of the REIT's expenses, including its advisory and administration fees. At the same time, the Fund would continue to pay its own investment advisory fees and other expenses, as a result of which the Fund and its shareholders in effect would be absorbing duplicate levels of fees with respect to investments in REITs. A REIT may focus on particular projects, such as apartment complexes, or geographic regions, such as the southeastern United States, or both.

REITs generally can be classified as equity REITs, mortgage REITs and hybrid REITs. Equity REITs generally invest a majority of their assets in income-producing real estate properties to generate cash flow from rental income and gradual asset appreciation. The income-producing real estate properties in which equity REITs invest typically include properties such as office, retail, industrial, hotel and apartment buildings, self-storage, specialty and diversified and healthcare facilities. Equity REITs can realize capital gains by selling properties that have appreciated in value. Mortgage REITs invest the majority of their assets in real estate mortgages and derive their income primarily from interest payments on the mortgages. Hybrid REITs combine the characteristics of both equity REITs and mortgage REITs.

Because REITs have ongoing fees and expenses, which may include management, operating and administration expenses, REIT shareholders, including the Fund, will indirectly bear a proportionate share of those expenses in addition to the expenses of the Fund. However, such expenses are not considered to be Acquired Fund Fees and Expenses and, therefore, are not reflected as such in the Fund's fee table.

REITs can be listed and traded on national securities exchanges or can be traded privately between individual owners. The Fund will generally invest only in publicly traded REITs. The Fund conceivably could own real estate directly as a result of a default on the securities it owns.

Therefore, the Fund may be subject to certain risks associated with the direct ownership of real estate, including difficulties in valuing and trading real estate, declines in the values of real estate, risks related to general and local economic conditions, adverse changes in

the climate for real estate, environmental liability risks, increases in property taxes and operated expenses, changes in zoning laws, casualty or condemnation losses, limitations on rents, changes in neighborhood values, the appeal of properties to tenants and increases in interest rates.

In addition to the risks described above, equity REITs may be affected by any changes in the value of the underlying property owned by the trusts, while mortgage REITs may be affected by the quality of any credit extended. Equity and mortgage REITs depend upon management skill, are not diversified and therefore are subject to the risk of financing single or a limited number of projects. Changes in interest rates also may affect the value of debt securities held by the Fund. By investing in REITs indirectly through the Fund, a shareholder will bear not only his/her proportionate share of the expenses of the Fund, but also, indirectly, similar expenses of the REITs. The Fund also may be subject to certain risks associated with the direct investments of the REITs. REITs may be affected by changes in their underlying properties and by defaults by borrowers or tenants. Mortgage REITs may be affected by the quality of the credit extended. Some REITs may have limited diversification and may be subject to risks inherent in financing a limited number of properties. REITs depend generally on their ability to generate cash flow to make distributions to shareholders or unitholders, and may be subject to defaults by borrowers and to self-liquidations. In addition, the performance of a REIT may be affected by its failure to qualify for tax-free pass-through of income under the Internal Revenue Code or its failure to maintain exemption from registration under the 1940 Act.

<u>Royalty Trusts</u>

A royalty trust is an entity that typically owns oil or natural gas wells or the mineral rights of wells and of property, such as mines. Royalty trusts in which the Fund may invest primarily will be organized in Canada. Royalty trusts commonly hold debt or equity securities in, or are entitled to receive royalties from, an underlying active business. The royalty trust structure is typically adopted by businesses that require a limited amount of capital in maintenance and that generate stable cash flows. The value of a royalty trust can rise or fall for the same reasons that affect equity securities or because of changes in interest rates.

An investment in units of a royalty trust is not the equivalent of owning shares in a corporation, as unitholders do not have the statutory rights normally associated with owning shares in a corporation. Investments in royalty trusts will have varying degrees of risk depending on the sector and the underlying assets. They will also be subject to general risks associated with business cycles, commodity prices, interest rates, and other economic factors.

Typically, royalty trusts are more volatile than fixed-income securities and preferred shares. The value of royalty trust units may decline significantly if they are unable to meet distribution targets. To the extent that claims against a royalty trust are not satisfied by the trust, investors in the trust (including the Fund if it is an investor in the Trust) could be held responsible for those claims. Certain, but not all, jurisdictions have enacted legislation to protect investors from some of this liability.

Royalty trusts may be subject to certain risks associated with a decline in demand for crude oil, natural gas and refined petroleum products, which, in turn, could adversely affect income and royalty trust revenues and cash flows. Factors that could lead to a decrease in market demand include a recession or other adverse economic conditions, an increase in the market price of the underlying commodity, higher taxes or other regulatory actions that increase costs, or a shift in consumer demand for such products. A rising interest rate environment could adversely impact the performance of royalty trusts. Rising interest rates could limit the capital appreciation of royalty trusts because of the increased availability of alternative investments at more competitive yields.

Because royalty trusts have ongoing fees and expenses, which may include management, operating and administration expenses, royalty trust shareholders, including the Fund, will indirectly bear a proportionate share of those expenses in addition to the expenses of the Fund. However, such expenses are not considered to be Acquired Fund Fees and Expenses and, therefore, are not reflected as such in the Fund's fee table.

<u>Master Limited Partnerships ("MLPs")</u>

MLPs are limited partnerships (or similar entities) in which the ownership units (e.g., limited partnership interests) are publicly traded. MLP units are registered with the Securities and Exchange Commission ("SEC") and are freely traded on a securities exchange or in the over-the-counter ("OTC") market. Many MLPs operate in the oil and gas related businesses, including energy processing and distribution. Many MLPs are pass-through entities that generally are taxed at the unitholder level and are not subject to federal or state income tax at the entity level; annual income, gains, losses, and deductions of such an MLP pass through directly to its unitholders. Distributions from an MLP may consist in part of a return of capital. Generally, an MLP is operated under the supervision of one or more general partners, and limited partners are not involved in the day-to-day management of the MLP.

Investing in MLPs involves certain risks related to investing in the underlying assets of the MLPs and risks associated with pooled investment vehicles. MLPs holding credit-related investments are subject to interest rate risk and the risk of default on payment obligations by debt issuers.

MLPs that concentrate in a particular industry or a particular geographic region are subject to risks associated with that industry or region. Investments held by MLPs may be relatively illiquid, limiting their ability to vary their portfolios promptly in response to changes

in economic or other conditions. MLPs may have limited financial resources, their securities may trade infrequently and in limited volume, and they may be subject to more abrupt or erratic price movements than securities of larger or more broadly based companies.

The risks of investing in an MLP are generally those inherent in investing in a partnership as opposed to a corporation. For example, state law governing partnerships is often less restrictive than state law governing corporations. Accordingly, there may be fewer protections afforded investors in an MLP than investors in a corporation. Although unitholders of an MLP are generally limited in their liability, similar to a corporation's shareholders, creditors typically have the right to seek the return of distributions made to unitholders if the liability in question arose before the distributions were paid. This liability may stay attached to the unitholder even after the units are sold. There are certain risks associated with the Fund's investments in MLPs, which are detailed below in "TAXES."

<u>Investment Companies and Other Pooled Vehicles</u>

The Fund may invest in the securities of other investment companies (including money market funds). Under the 1940 Act, the Fund's investment in investment companies is limited to, subject to certain exceptions, (i) 3% of the total outstanding voting stock of any one investment company, (ii) 5% of the Fund's total assets with respect to any one investment company and (iii) 10% of the Fund's total assets of investment companies in the aggregate. The Fund may invest in shares of open-end and closed-end investment companies, including other exchange-traded funds ("ETFs") and money market funds (including pending investment of cash balances). ETFs are investment companies whose shares are bought and sold on a securities exchange. An ETF typically holds a portfolio of securities designed to track a particular market segment or index. Some examples of ETFs are SPDRs®, NASDAQ 100 Index Tracking StockSM ("QQQs SM") iShares® and VIPERs®. The Fund could purchase an ETF to gain exposure to a portion of the U.S. or foreign market.

The Fund may invest in exchange traded notes ("ETNs"), which are similar to ETFs in that they may be designed to provide returns that track an index; ETNs are different from ETFs, however, in one important respect. They are not secured by an underlying pool of assets, but rather are notes (or debt securities) secured only by the ability of the issuer to pay. As such, their shares are subject to the same risks described for "Corporate Debt Securities" below.

The Fund may invest also in other exchange traded products ("ETPs") that, like an ETF, invest in a pool of assets and are traded on an exchange. ETPs, however, are generally organized as commodity pools registered under the Commodity Exchange Act or as grantor trusts and are not registered as investment companies under the 1940 Act. This is due to the fact that they invest in, for example, commodities or currencies rather than securities. The Fund, as a shareholder of another investment company, ETF, ETN or ETP, will bear its pro rata portion of the entity's fees and expenses, in addition to its own fees and expenses. In addition, it will be exposed to the investment risks associated with the entity, which generally reflect the risks of the entity's underlying investments.

As a shareholder of an investment company, ETF, ETN or ETP, the Fund must rely on the entity to achieve its investment objective. If it fails to achieve its investment objective, the Fund may likewise fail to achieve its investment objective or otherwise be adversely affected.

Investments in ETFs, ETNs and ETPs are also subject to brokerage and other trading costs, which could result in greater expenses to the Fund and lack of liquidity in an entity could result in its market price being more volatile than the underlying portfolio of securities. In addition, because such entities are listed on national stock exchanges and are traded like stocks listed on an exchange, their shares potentially may trade at a discount or a premium to their NAV. Finally, because the value of ETF shares depends on the demand in the market, the Advisor may not be able to liquidate the Fund's holdings at the most optimal time, adversely affecting the Fund's performance.

<u>Fixed Income Securities.</u>

The market value of the fixed income investments in which the Fund may invest will change in response to interest rate changes and other factors. During periods of falling interest rates, the values of outstanding fixed income securities generally rise. Conversely, during periods of rising interest rates, the values of such securities generally decline. Moreover, while securities with longer maturities tend to produce higher yields, the prices of longer maturity securities are also subject to greater market fluctuations as a result of changes in interest rates. Changes by recognized agencies in the rating of any fixed income security and in the ability of an issuer to make payments of interest and principal also affect the value of these investments. Changes in the value of these securities will not necessarily affect cash income derived from these securities but will affect the Fund's NAV. Additional information regarding fixed income securities is described below:

*Duration.* Duration is a measure of the expected change in value of a fixed income security for a given change in interest rates. For example, if interest rates changed by one percent, the value of a security having an effective duration of two years generally would vary by two percent. Duration takes the length of the time intervals between the present time and time that the interest and principal payments are scheduled, or in the case of a callable bond, expected to be received, and weighs them by the present values of the cash to be received at each future point in time.

<u>Variable and Floating Rate Securities</u>

Variable and floating rate instruments involve certain obligations that may carry variable or floating rates of interest, and may involve a conditional or unconditional demand feature. Such instruments bear interest at rates which are not fixed, but which vary with changes in specified market rates or indices. The interest rates on these securities may be reset daily, weekly, quarterly, or some other reset period, and may have a set floor or ceiling on interest rate changes. There is a risk that the current interest rate on such obligations may not accurately reflect existing market interest rates. A demand instrument with a demand notice exceeding seven days may be considered illiquid if there is no secondary market for such security.

<u>Corporate Debt Securities</u>

The Fund may seek investment in corporate debt securities representative of one or more high yield bond or credit derivative indices, which may change from time to time. Selection will generally be dependent on independent credit analysis or fundamental analysis performed by the Advisor. The Fund may invest in all grades of corporate securities including below investment grade as discussed below. The Fund also may invest in unrated securities.

Corporate debt securities are typically fixed-income securities issued by businesses to finance their operations. Notes, bonds, debentures and commercial paper are the most common types of corporate debt securities. The primary differences between the different types of corporate debt securities are their maturities and secured or un-secured status. Commercial paper has the shortest term and is usually unsecured. The broad category of corporate debt securities includes debt issued by domestic or foreign companies of all kinds, including those with small-, mid- and large-capitalizations. Corporate debt may be rated investment-grade or below investment-grade and may carry variable or floating rates of interest.

Because of the wide range of types, and maturities, of corporate debt securities, as well as the range of creditworthiness of its issuers, corporate debt securities have widely varying potentials for return and risk profiles. For example, commercial paper issued by a large established domestic corporation that is rated investment-grade may have a modest return on principal, but carries relatively limited risk. On the other hand, a long-term corporate note issued by a small foreign corporation from an emerging market country that has not been rated may have the potential for relatively large returns on principal, but carries a relatively high degree of risk.

Corporate debt securities carry both credit risk and interest rate risk. Credit risk is the risk that the Fund could lose money if the issuer of a corporate debt security is unable to pay interest or repay principal when it is due. Some corporate debt securities that are rated below investment-grade are generally considered speculative because they present a greater risk of loss, including default, than higher quality debt securities. The credit risk of a particular issuer's debt security may vary based on its priority for repayment. For example, higher ranking (senior) debt securities have a higher priority than lower ranking (subordinated) securities. This means that the issuer might not make payments on subordinated securities while continuing to make payments on senior securities. In addition, in the event of bankruptcy, holders of higher-ranking senior securities may receive amounts otherwise payable to the holders of more junior securities. Interest rate risk is the risk that the value of certain corporate debt securities will tend to fall when interest rates rise. In general, corporate debt securities with longer terms tend to fall more in value when interest rates rise than corporate debt securities with shorter terms.

<u>Non-Investment-Grade Debt Securities</u>

The Fund may invest in non-investment-grade securities. Non-investment-grade securities, also referred to as "high yield securities" or "junk bonds," are debt securities that are rated lower than the four highest rating categories by a Nationally Recognized Statistical Rating Organization (for example, lower than Baa3 by Moody's Investors Service, Inc. or lower than BBB- by Standard & Poor's) or are determined to be of comparable quality by the Fund's Advisor. These securities are generally considered to be, on balance, highly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation and will generally involve more credit risk than securities in the investment-grade categories. Investment in these securities generally provides greater income and increased opportunity for capital appreciation than investments in higher quality securities, but they also typically entail greater price volatility and principal and income risk.

Some high yield securities are issued by smaller, less-seasoned companies, while others are issued as part of a corporate restructuring, such as an acquisition, merger, or leveraged buyout. Companies that issue high yield securities are often highly leveraged and may not have available to them more traditional methods of financing. Therefore, the risk associated with acquiring the securities of such issuers generally is greater than is the case with investment-grade securities. Some high yield securities were once rated as investment-grade but have been downgraded to junk bond status because of financial difficulties experienced by their issuers.

The market values of high yield securities tend to reflect individual issuer developments to a greater extent than do investment-grade securities, which in general react to fluctuations in the general level of interest rates. High yield securities also tend to be more sensitive to economic conditions than are investment-grade securities. A projection of an economic downturn or of a period of rising interest rates, for example, could cause a decline in junk bond prices because the advent of a recession could lessen the ability of a highly

leveraged company to make principal and interest payments on its debt securities. If an issuer of high yield securities held by the Fund defaults, in addition to risking payment of all or a portion of interest and principal, the Fund may incur additional expenses to seek recovery.

The secondary market on which high yield securities are traded may be less liquid than the market for investment-grade securities. Less liquidity in the secondary trading market could adversely affect the ability of the Fund to sell a high yield security or the price at which the Fund could sell a high yield security, and could adversely affect the daily NAV of Shares. When secondary markets for high yield securities are less liquid than the market for investment-grade securities, it may be more difficult to value the securities because such valuation may require more research, and elements of judgment may play a greater role in the valuation because there is less reliable, objective data available.

The Fund will not necessarily dispose of a security if a credit-rating agency downgrades the rating of the security below its rating at the time of purchase.

<u>Sovereign Debt Obligations</u>

Sovereign debt obligations are issued or guaranteed by a foreign government or one of its agencies, authorities, instrumentalities or political subdivisions. Investments in sovereign debt obligations involve special risks not present in corporate debt obligations. The issuer of the sovereign debt or the governmental authorities that control the repayment of the debt may be unable or unwilling to repay principal or interest when due, and the Fund may have limited recourse in the event of a default. During periods of economic uncertainty, the market prices of sovereign debt, and the Fund's NAV, may be more volatile than prices of U.S. debt obligations. In the past, certain non-U.S. markets have encountered difficulties in servicing their debt obligations, withheld payments of principal and interest and declared moratoria on the payment of principal and interest on their sovereign debts.

A sovereign debtor's willingness or ability to repay principal and pay interest in a timely manner may be affected by, among other factors, its cash flow situation, the extent of its foreign currency reserves, the availability of sufficient foreign exchange, the relative size of the debt service burden, the sovereign debtor's policy toward principal international lenders and local political constraints. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies and other entities to reduce principal and interest arrearages on their debt. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance or repay principal or interest when due may result in the cancellation of third-party commitments to lend funds to the sovereign debtor, which may further impair such debtor's ability or willingness to service its debts.

<u>Lending Portfolio Securities</u>

For the purpose of achieving income, the Fund may lend its portfolio securities, provided (1) the loan is secured continuously by collateral consisting of U.S. Government securities or cash or cash equivalents (cash, U.S. Government securities, negotiable certificates of deposit, bankers' acceptances or letters of credit) maintained on a daily mark-to-market basis in an amount at least equal to the current market value of the securities loaned, (2) the Fund may at any time call the loan and obtain the return of securities loaned, (3) the Fund will receive any interest or dividends received on the loaned securities, and (4) the aggregate value of the securities loaned will not at any time exceed one-third of the total assets of the Fund. The Fund did not engage in securities lending activities in the most recently completed fiscal year ended January 31, 2026.

<u>Repurchase Agreements</u>

The Fund may enter into repurchase agreements, which are agreements pursuant to which the Fund acquires securities from a third party with the understanding that the seller will repurchase them at a fixed price on an agreed date. These agreements may be made with respect to any of the portfolio securities in which the Fund is authorized to invest. Repurchase agreements may be characterized as loans secured by the underlying securities. The Fund may enter into repurchase agreements with (i) member banks of the Federal Reserve System having total assets in excess of $500 million and (ii) securities dealers ("Qualified Institutions"). The Advisor will monitor the continued creditworthiness of Qualified Institutions.

The use of repurchase agreements involves certain risks. For example, if the seller of securities under a repurchase agreement defaults on its obligation to repurchase the underlying securities, as a result of its bankruptcy or otherwise, the Fund will seek to dispose of such securities, which could involve costs or delays. If the seller becomes insolvent and subject to liquidation or reorganization under applicable bankruptcy or other laws, the Fund's ability to dispose of the underlying securities may be restricted. Finally, the Fund may not be able to substantiate its interest in the underlying securities. To minimize this risk, the custodian will hold the securities underlying the repurchase agreement at all times in an amount at least equal to the repurchase price, including accrued interest.

If the seller fails to repurchase the securities, the Fund may suffer a loss to the extent proceeds from the sale of the underlying securities are less than the repurchase price. The resale price reflects the purchase price plus an agreed upon market rate of interest. The collateral is marked-to-market daily.

<u>Reverse Repurchase Agreements</u>

The Fund may enter into reverse repurchase agreements, which involve the sale of securities with an agreement to repurchase the securities at an agreed-upon price, date and interest payment and have the characteristics of borrowing. The securities purchased with the funds obtained from the agreement and securities collateralizing the agreement will have maturity dates no later than the repayment date.

Generally, the effect of such transactions is that the Fund can recover all or most of the cash invested in the portfolio securities involved during the term of the reverse repurchase agreement, while in many cases the Fund is able to keep some of the interest income associated with those securities. Such transactions are only advantageous if the Fund has an opportunity to earn a greater rate of return on the cash derived from these transactions than the interest cost of obtaining the same amount of cash. Opportunities to realize earnings from the use of the proceeds equal to or greater than the interest required to be paid may not always be available and the Fund intends to use the reverse repurchase technique only when the Advisor believes it will be advantageous to the Fund. The use of reverse repurchase agreements may exaggerate any interim increase or decrease in the value of the Fund's assets. The custodian bank will maintain a separate account for the Fund with securities having a value equal to or greater than such commitments. Under the 1940 Act, reverse repurchase agreements are considered borrowings.

<u>Illiquid and Restricted Securities</u>

The Fund may invest up to 15% of its net assets in illiquid securities. Illiquid securities include securities subject to contractual or legal restrictions on resale (e.g., because they have not been registered under the Securities Act) and securities that are otherwise not readily marketable (e.g., because trading in the security is suspended or because market makers do not exist or will not entertain bids or offers). Securities that have not been registered under the Securities Act are referred to as private placements or restricted securities and are purchased directly from the issuer or in the secondary market. Foreign securities that are freely tradable in their principal markets are not considered to be illiquid.

Restricted and other illiquid securities may be subject to the potential for delays on resale and uncertainty in valuation. The Fund might be unable to dispose of illiquid securities promptly or at reasonable prices and might thereby experience difficulty in satisfying redemption requests from shareholders. The Fund might have to register restricted securities in order to dispose of them, resulting in additional expense and delay. Adverse market conditions could impede such a public offering of securities.

A large institutional market exists for certain securities that are not registered under the Securities Act, including foreign securities. The fact that there are contractual or legal restrictions on resale to the general public or to certain institutions may not be indicative of the liquidity of such investments. Rule 144A under the Securities Act allows such a broader institutional trading market for securities otherwise subject to restrictions on resale to the general public.

Rule 144A establishes a "safe harbor" from the registration requirements of the Securities Act for resale of certain securities to qualified institutional buyers. Rule 144A has produced enhanced liquidity for many restricted securities, and market liquidity for such securities may continue to expand as a result of this regulation and the consequent existence of the PORTAL system, which is an automated system for the trading, clearance and settlement of unregistered securities of domestic and foreign issuers sponsored by the Financial Industry Regulatory Authority, Inc.

Under guidelines adopted by the Board, the Advisor may determine that particular Rule 144A securities, and commercial paper issued in reliance on the private placement exemption from registration afforded by Section 4(2) of the Securities Act, are liquid even though they are not registered. A determination of whether such a security is liquid or not is a question of fact. In making this determination, the Advisor will consider, as it deems appropriate under the circumstances and among other factors: (1) the frequency of trades and quotes for the security; (2) the number of dealers willing to purchase or sell the security; (3) the number of other potential purchasers of the security; (4) dealer undertakings to make a market in the security; (5) the nature of the security (e.g., debt or equity, date of maturity, terms of dividend or interest payments, and other material terms) and the nature of the marketplace trades (e.g., the time needed to dispose of the security, the method of soliciting offers, and the mechanics of transfer); and (6) the rating of the security and the financial condition and prospects of the issuer. In the case of commercial paper, the Advisor will also determine that the paper (1) is not traded flat or in default as to principal and interest, and (2) is rated in one of the two highest rating categories by at least two Nationally Recognized Statistical Rating Organizations ("NRSROs") or, if only one NRSRO rates the security, by that NRSRO, or, if the security is unrated, the Advisor determines that it is of equivalent quality.

Rule 144A securities and Section 4(2) commercial paper that have been deemed liquid as described above will continue to be monitored by the Advisor to determine if the security is no longer liquid as the result of changed conditions. Investing in Rule 144A securities or Section 4(2) commercial paper could have the effect of increasing the amount of the Fund's assets invested in illiquid securities if institutional buyers are unwilling to purchase such securities.

<u>Borrowing</u>

The Fund may borrow money from a bank or another person to the extent permitted under the Investment Restrictions. Such borrowings may be utilized (i) for temporary or emergency purposes; (ii) in anticipation of or in response to adverse market conditions; or (iii) for cash management purposes. Borrowed money will cost the Fund interest expense and/or other fees. The costs of borrowing may reduce the Fund's return. To the extent that the Fund has outstanding borrowings, it will be leveraged. Leveraging generally exaggerates the effect on NAV of any increase or decrease in the market value of the Fund's portfolio securities. All borrowings are limited to an amount not exceeding 33 1/3% of the Fund's total assets (including the amount borrowed) less liabilities (other than borrowings). Any borrowings that exceed this amount will be reduced within three days (excluding Sundays and holidays) to the extent necessary to comply with the 33 1/3% limitation even if it is not advantageous to sell securities at that time.

If there are unusually heavy redemptions, the Fund may have to sell a portion of its investment portfolio at a time when it may not be advantageous to do so. Selling Fund securities under these circumstances may result in a lower net asset value per share. The Advisor believes that, in the event of abnormally heavy redemption requests, the Fund's borrowing ability would help to mitigate any such effects and could make the forced sale of its portfolio securities less likely.

<u>Options</u>

The Fund may enter into options contracts. These options contracts will be used to simulate full investment in the Underlying Index to facilitate trading or to reduce transaction costs. The Fund will not use options for speculative purposes.

A call option gives a holder the right to purchase a specific security or an index at a specified price ("exercise price") within a specified period of time. A put option gives a holder the right to sell a specific security or an index at a specified price within a specified period of time. The initial purchaser of a call option pays the "writer," i.e., the party selling the option, a premium which is paid at the time of purchase and is retained by the writer whether or not such option is exercised. The Fund may purchase put options to hedge its portfolio against the risk of a decline in the market value of securities held and may purchase call options to hedge against an increase in the price of securities it is committed to purchase. The Fund may write put and call options along with a long position in options to increase its ability to hedge against a change in the market value of the securities it holds or is committed to purchase.

The Fund may purchase and sell derivative instruments only to the extent that such activities are consistent with the requirements of the Commodity Exchange Act ("CEA") and the rules adopted by the Commodity Futures Trading Commission ("CFTC") thereunder. Under CFTC rules, a registered investment company that conducts more than a minimal amount of trading in futures, commodity options, swaps and other commodity interests is a commodity pool and its adviser must register as a commodity pool operator ("CPO"). The Fund is a "commodity pool" under the CEA and the Advisor is a "commodity pool operator" registered with the CFTC, and is a member of the National Futures Association ("NFA"). As a registered commodity pool operator with respect to the Fund, the Advisor must comply with various regulatory requirements under the CEA, and the rules and regulations of the CFTC and the NFA, including investor protection requirements, antifraud prohibitions, disclosure requirements, and reporting and recordkeeping requirements. The Advisor is also subject to periodic inspections and audits by the CFTC and NFA.

<u>Swap Agreements</u>

The Fund may enter into interest rate, index and currency exchange rate swap agreements in an attempt to obtain a particular desired return at a lower cost to the Fund than if the Fund has invested directly in an instrument that yielded that desired return. Swap agreements are two-party contracts entered into primarily by institutional investors for periods ranging from a few weeks to more than one year. In a standard "swap" transaction, two parties agree to exchange the returns (or differentials in rates of returns) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or "swapped" between the parties are calculated with respect to a "notional amount," i.e., the return on or increase in value of a particular dollar amount invested at a particular interest rate, in a particular foreign currency, or in a "basket" of securities representing a particular index. The "notional amount" of the swap agreement is only a fictive basis on which to calculate the obligations the parties to a swap agreement have agreed to exchange. The Fund's obligations (or rights) under a swap agreement will generally be equal only to the amount to be paid or received under the agreement based on the relative values of the positions held by each party to the agreement (the "net amount"). The Fund's obligations under a swap agreement will be accrued daily (offset against any amounts owing to the Fund) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by the maintenance of a segregated account consisting of cash, U.S. government securities, or other liquid securities, to avoid leveraging of the Fund's portfolio. The Fund will not enter into a swap agreement with any single party if the net amount owed or to be received under existing contracts with that party would exceed 5% of the Fund's assets.

Whether the Fund's use of swap agreements enhance the Fund's total return will depend on the Advisor's ability correctly to predict whether certain types of investments are likely to produce greater returns than other investments. Because they are two-party contracts and may have terms of greater than seven days, swap agreements may be considered to be illiquid. Moreover, the Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. The Advisor will cause the Fund to enter into swap agreements only with counterparties that would be eligible for

consideration as repurchase agreement counterparties under the Fund's repurchase agreement guidelines. The swap market is a relatively new market and is largely unregulated. It is possible that developments in the swaps market, including potential government regulation, could adversely affect the Fund's ability to terminate existing swap agreements or to realize amounts to be received under such agreements.

Certain swap agreements are exempt from most provisions of the CEA and, therefore, are not regulated as futures or commodity option transactions under the CEA, pursuant to regulations of the CFTC. To qualify for this exemption, a swap agreement must be entered into by "eligible participants," which include the following, provided the participants' total assets exceed established levels: a bank or trust company, savings association or credit union, insurance company, investment company subject to regulation under the 1940 Act, commodity pool, corporation, partnership, proprietorship, organization, trust or other entity, employee benefit plan, governmental entity, broker-dealer, futures commission merchant, natural person, or regulated foreign person. To be eligible, natural persons and most other entities must have total assets exceeding $10 million; commodity pools and employees benefit plans must have assets exceeding $5 million. In addition, an eligible swap transaction must meet three conditions. First, the swap agreement may not be part of a fungible class of agreements that are standardized as to their material economic terms. Second, the creditworthiness of parties with actual or potential obligations under the swap agreement must be a material consideration in entering into or determining the terms of the swap agreement, including pricing, cost or credit enhancement terms. Third, swap agreements may not be entered into and traded on or through a multilateral transaction execution facility.

<u>Currency Transactions</u>

The Fund may enter into foreign currency forward contracts to facilitate local securities settlements or to protect against currency exposure in connection with distributions to shareholders. The Fund does not expect to engage in currency transactions for the purpose of hedging against declines in the value of the Fund's assets that are denominated in one or more foreign currencies. The Fund may invest in various types of currency contracts to hedge against changes in the value of the U.S. dollar against specified non-U.S. currencies.

<u>Forward Foreign Currency Contracts</u>

A forward foreign currency exchange contract ("forward contract") involves an obligation to purchase or sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. These contracts are principally traded in the interbank market conducted directly between currency traders (usually large commercial banks) and their customers. A forward contract generally has no margin deposit requirement, and no commissions are charged at any stage for trades.

A non-deliverable forward contract is a forward contract where there is no physical settlement of two currencies at maturity. Non-deliverable forward contracts are contracts between parties in which one party agrees to make a payment to the other party (the "Counterparty") based on the change in market value or level of a specified currency. In return, the Counterparty agrees to make payment to the first party based on the return of a different specified currency. Non-deliverable forward contracts will usually be done on a net basis, with the Fund receiving or paying only the net amount of the two payments. The net amount of the excess, if any, of the Fund's obligations over its entitlements with respect to each non-deliverable forward contract is accrued on a daily basis and an amount of cash or highly liquid securities having an aggregate value at least equal to the accrued excess is maintained in an account at the Trust's custodian bank. The risk of loss with respect to non-deliverable forward contracts generally is limited to the net amount of payments that the Fund is contractually obligated to make or receive.

<u>Short Sales</u>

A short sale is a transaction in which the Fund sells a security it does not own. To complete such a transaction, the Fund must borrow the security to make delivery to the buyer. The Fund is then obligated to replace the security borrowed by borrowing the same security from another lender, purchasing it at the market price at the time of replacement or paying the lender an amount equal to the cost of purchasing the security. The price at such time may be more or less than the price at which the security was sold by the Fund. Until the security is replaced, the Fund is required to repay the lender any dividends it receives, or interest which accrues, during the period of the loan. To borrow the security, the Fund also may be required to pay a premium, which would increase the cost of the security sold. The net proceeds of the short sale will be retained by the broker, to the extent necessary to meet margin requirements, until the short position is closed out. The Fund also will incur transaction costs in effecting short sales.

The Fund may make short sales "against the box," i.e., when a security identical to or convertible or exchangeable into one owned by the Fund is borrowed and sold short. Whenever the Fund engages in short sales, it earmarks or segregates liquid securities or cash in an amount that, when combined with the amount of collateral deposited with the broker in connection with the short sale (other than the proceeds of the short sale), equals the current market value of the security sold short. The earmarked or segregated assets are marked-to-market daily.

The Fund will incur a loss as a result of a short sale if the price of the security increases between the date of the short sale and the date

on which the Fund replaces the borrowed security. The Fund will realize a gain if the price of the security declines in price between those dates. The amount of any gain will be decreased, and the amount of any loss increased, by the amount of the premium, dividends or interest the Fund may be required to pay, if any, in connection with a short sale. Short sales may be subject to unlimited losses as the price of a security can rise infinitely.

The Fund may not be able to borrow stocks that are short positions in the Underlying Index as their supply may be insufficient or the cost to borrow may be prohibitively expensive due to market or stock specific conditions. Under such circumstances, the Fund may not achieve its investment objective.

<u>Sector Risk</u> 

*Real Estate Sector.* The Fund invests in companies in the real estate industry, including REITs. Therefore, the Fund is subject to the risks associated with investing in real estate, which may include, but are not limited to, possible declines in the value of real estate, adverse changes in national, state or local real estate conditions; obsolescence of properties; changes in the availability, cost and terms of mortgage funds (including changes in interest rates), the impact of changes in environmental laws, overbuilding in a real estate company's market, and environmental problems. Because REIT's have ongoing fees and expenses, which may include management, operating and administration expenses, REIT shareholders including the Fund, will indirectly bear a proportionate share of those expenses in addition to the expenses of the Fund.

*Oils/Energy Sector*. The profitability of companies in the oils/energy sector is related to worldwide energy prices, exploration, and production spending. These companies also are subject to risks of changes in exchange rates, government regulation, world events, depletion of resources and economic conditions, as well as market, economic and political risks of the countries where energy companies are located or do business. Oil and gas exploration and production can be significantly affected by natural disasters. Oil exploration and production companies may be adversely affected by changes in exchange rates, interest rates, government regulation, world events, and economic conditions. Oil exploration and production companies may be at risk for environmental damage claims.

<u>Correlation and Tracking Error</u>

Correlation measures the degree of association between the returns of the Fund and the Underlying Index ; a figure of 1.00 would indicate perfect correlation. Correlation is calculated at the Fund's fiscal year-end by comparing the Fund's average monthly total returns, before fees and expenses, to the Underlying Index's average monthly total returns over the prior one-year period or since inception if the Fund has been in existence for less than one year. Another means of evaluating the degree of correlation between the returns of the Fund and the Underlying Index is to assess the "tracking error" between the two. Tracking error means the variation between the Fund's annual return and the return of the Underlying Index, expressed in terms of standard deviation. The Fund seeks to have a tracking error of less than 5%, measured on a monthly basis over a one-year period by taking the standard deviation of the difference in the Fund's returns versus the Underlying Index's returns.

**INVESTMENT RESTRICTIONS**

The Fund has adopted certain investment restrictions as fundamental policies which cannot be changed without the approval of the holders of a "majority" of the outstanding voting securities of the Fund, as that term is defined in the 1940 Act. As defined in the 1940 Act, the vote of a "majority" of the outstanding voting securities means the lesser of: (i) 67% or more of the voting securities of the series present at a duly called meeting of shareholders, if the holders of more than 50% of the outstanding voting securities of the Fund are present or represented by proxy; or (ii) more than 50% of the outstanding voting securities of the series. (All policies of the Fund not specifically identified in this SAI or the Prospectus as fundamental may be changed without a vote of the shareholders of the Fund, upon approval of a majority of the Trustees.) For purposes of the following limitations, all percentage limitations apply immediately after a purchase or initial investment.

1. The Fund may not borrow money, except to the extent permitted by the 1940 Act, the rules and regulations thereunder
 and any applicable exemptive relief.

2. The Fund may not issue senior securities, except to the extent permitted by the 1940 Act, the rules and regulations
 thereunder and any applicable exemptive relief.

3. The Fund may not engage in the business of underwriting securities except to the extent that the Fund may
 be considered an underwriter within the meaning of the Securities Act in the acquisition, disposition or resale of its portfolio securities
 or in connection with investments in other investment companies, or to the extent otherwise permitted under the 1940 Act, the rules and
 regulations thereunder and any applicable exemptive relief.

4. The Fund may not purchase or sell real estate, except to the extent permitted under the 1940 Act, the rules
 and regulations thereunder and any applicable exemptive relief. This policy shall not prevent the Fund from purchasing real estate related
 investments, including real estate investment trusts.

5. The Fund may not purchase or sell commodities, contracts relating to commodities or options on contracts relating
 to commodities except to the extent permitted under the 1940 Act, the rules and regulations thereunder and any applicable exemptive relief.
 This policy shall not prevent the Fund from purchasing or selling foreign currency or purchasing, selling or entering into futures contracts,
 options, forward contracts, swaps, caps, floors, collars and other financial instruments as currently exist or may in the future be developed.

6. The Fund may not make loans, except to the extent permitted under the 1940 Act, the rules and regulations
 thereunder and any applicable exemptive relief.

7. The Fund will not concentrate (i.e., hold more than 25% of its assets in the stocks of a single industry or
 group of industries) its investments in issuers of one or more particular industries, except that the Fund will concentrate to approximately
 the same extent that its Underlying Index concentrates in the stocks of such particular industry or industries.

If a restriction on the Fund's investments is adhered to at the time an investment is made, a subsequent change in the percentage of Fund assets invested in certain securities or other instruments, or change in average duration of the Fund's investment portfolio, resulting from changes in the value of the Fund's total assets, will not be considered a violation of the restriction; provided, however, that the asset coverage requirement applicable to borrowings shall be maintained in the manner contemplated by applicable law.

The Fund is "diversified" as defined in the 1940 Act. This means that at least 75% of the value of the Fund's total assets is represented by cash and cash items (including receivables), government securities, securities of other investment companies, and securities of other issuers, which for purposes of this calculation, are limited in respect of any one issuer to an amount not greater in value than 5% of the Fund's total assets and to not more than 10% of the outstanding voting securities of such issuer. The Fund may not change from "diversified" to "non-diversified" without the approval of the holders of a "majority" of the outstanding voting securities of the Fund (as defined above).

For purposes of the limitation on industry concentration, securities of the U.S. government (including its agencies and instrumentalities) and tax-free securities of state or municipal governments and their political subdivisions (and repurchase agreements collateralized by government securities) are not considered to be issued by members of any industry. The Fund uses proprietary Dow Jones classifications to measure concentration.

**POLICIES AND PROCEDURES FOR DISCLOSURE OF PORTFOLIO HOLDINGS**

The Trust has adopted a policy regarding the disclosure of information about the Fund's portfolio holdings. The Fund and its service providers may not receive compensation or any other consideration (which includes any agreement to maintain assets in the Fund or in other investment companies or accounts managed by the Advisor or any affiliated person of the Advisor) in connection with the disclosure of portfolio holdings information of the Fund. The Trust's policy is implemented and overseen by the Chief Compliance Officer of the Trust, subject to the oversight of the Board. Periodic reports regarding these procedures will be provided to the Board. The Trust, the Advisor and Archer Distributors, LLC (the "Distributor") will not disseminate non-public information concerning the Trust. The Board must approve all material amendments to this policy.

Each business day, the Fund's portfolio holdings information will generally be provided for dissemination through the facilities of the National Securities Clearing Corporation ("NSCC") and/or other fee-based subscription services to NSCC members and/or subscribers to those other fee-based subscription services, including Authorized Participants (as defined below), and to entities that publish and/or analyze such information in connection with the process of purchasing or redeeming Creation Units or trading shares of the Fund in the secondary market. This information typically reflects the Fund's anticipated holdings as of the next Business Day (as defined below).

Access to information concerning the Fund's portfolio holdings may be permitted to personnel of third party service providers, including the custodian, transfer agent, auditors and counsel, as may be necessary to conduct business in the ordinary course in a manner consistent with such service providers' agreements with the Trust on behalf of the Fund.

The Fund discloses on the Advisor's website at <u>www.ArrowFunds.com</u> at the start of each Business Day the identities and quantities of the securities and other assets held by the Fund that will form the basis of the Fund's calculation of its NAV on that Business Day. The portfolio holdings so disclosed will be based on information as of the close of business on the prior Business Day and/or trades that have been completed prior to the opening of business on that Business Day and that are expected to settle on that Business Day. The Fund may also concurrently disclose this portfolio holdings information directly to ratings agencies on a daily basis.

*Quarterly Portfolio Schedule*. The Trust is required to disclose, after its first and third fiscal quarters, the complete schedule of the Fund's monthly portfolio holdings with the SEC on Form N-PORT. The Trust will also disclose a complete schedule of the Fund's portfolio holdings with the SEC on Form N-CSR after its second and fourth quarters.

Form N-PORT and Form N-CSR for the Fund will be available on the SEC's website at <u>www.sec.gov</u>. The Fund's Form N-PORT and Form N-CSR will be available without charge, upon request, by calling 1-877-277-6933 or by writing to: Arrow Dow Jones Global Yield ETF, c/o Ultimus Fund Solutions, LLC, 225 Pictoria Drive, Suite 450, Cincinnati, OH, 45246.

**MANAGEMENT**

The business of the Trust is managed by the Advisor under the direction of the Board in accordance with the Trust Instrument and the Trust's By-laws (the "Governing Documents"), which have been filed with the SEC and are available upon request. The Board consists of four (4) individuals, three (3) of whom are not "interested persons" (as defined under the 1940 Act) of the Trust or the Advisor ("Independent Trustees"). Pursuant to the Governing Documents, the Trustees shall elect officers including, but not limited to, a President, a Treasurer, a Secretary, and a Chief Compliance Officer.

The Board retains the power to conduct, operate and carry on the business of the Trust and has the power to incur and pay any expenses, which, in the judgment of the Board, are necessary or incidental to carry out any of the Trust's purposes. The Board, officers and agents of the Trust, when acting in such capacities, shall not be subject to any personal liability except for his or her own willful misfeasance, bad faith, gross negligence or reckless disregard of his or her duties.

<u>Board Leadership Structure</u>

Board members who are Independent Trustees currently constitute three-quarters of the Board. Joseph Barrato is considered an interested trustee, and serves as Chairman of the Board. The Chairman's responsibilities include: setting an agenda for each meeting of the Board; presiding at all meetings of the Board; and serving as a liaison between the other Trustees, Trust officers, management personnel and counsel.

The Board believes that having an interested Chairman, who is familiar with the Advisor and its operations, while also having three-quarters of the Board composed of Independent Trustees, strikes an appropriate balance that allows the Board to benefit from the insights and perspective of a representative of management while empowering the Independent Trustees with the ultimate decision-making authority. The Board does not believe that an independent Chairman would enhance the Board's effectiveness, as the relatively small size of the Board allows for diverse viewpoints to be shared and for effective communications between and among Independent Trustees and management so that meetings proceed efficiently. Independent Trustees have effective control over the Board's agenda because they form a majority of the Board and can request presentations and agenda topics at Board meetings. For these reasons, the Board also determined not to appoint a lead Independent Trustee.

The Trustees discharge their responsibilities collectively as a Board, as well as through Board committees, each of which operates pursuant to a charter or procedures approved by the Board that delineates the specific responsibilities of that committee. The Board has established one standing committee: the Audit Committee. The members and responsibilities of the Audit Committee are summarized below.

The Board holds four regularly scheduled in-person or telephonic meetings each year. The Board may hold special meetings, as needed, either in person or by telephone, to address matters arising between regular meetings. The Independent Trustees also hold at least one in-person meeting each year during a portion of which management is not present and may hold special meetings, as needed, either in person or by telephone.

<u>Board Risk Oversight</u>

The Board is responsible for overseeing risk management and the full Board regularly engages in discussions of risk management and receives compliance reports that inform its oversight of risk management from its Chief Compliance Officer at quarterly meetings and on an ad hoc basis, when and if necessary.

The Audit Committee considers financial risk within its area of responsibilities. Generally, the Board believes that its oversight of material risks is adequately maintained through the compliance-reporting chain where the Chief Compliance Officer is the primary recipient and communicator of such risk-related information.

<u>Trustee Qualifications</u>

Generally, the Trust believes that each Trustee is competent to serve because of his individual overall merits including: (i) experience, (ii) qualifications, (iii) attributes and (iv) skills.

Mr. Barrato is a founding member of Arrow Investment Advisors, LLC, the advisor to the Fund. He has over 25 years of experience in the investment management industry, including six years with Rydex Investments, where he was responsible for the firm's research and

developed momentum models with the Rydex sector funds. Prior to Rydex, Mr. Barrato spent 12 years at the Federal Reserve Board of Governors, as an analyst and senior financial examiner. He holds a bachelor's degree in business administration from The George Washington University, where he majored in finance and minored in accounting. Mr. Barrato's experience in the investment management industry gives him a strong understanding of the operational issues facing mutual funds and the regulatory framework under which investment companies must operate.

Robert Andrialis has more than 50 years of experience in the financial services and business management. He served as a president and senior executive of various organizations in the financial services industry and founded Berwick Capital. Mr. Andrialis' experience in the financial services industry, coupled with his extensive leadership experience, gives him a strong understanding of the operational and management issues facing mutual funds and makes him well qualified to serve as a Trustee to the Trust.

Paul Montgomery is the principal owner and managing member of Theta Investment Research, LLC, an independent research firm focused on the management of alternative investments. He has nearly ten years of experience in the investment management industry. Mr. Montgomery holds a bachelor of art degree in psychology from The King's College. Mr. Montgomery's experience in the investment management industry gives him a strong understanding of the operational issues facing mutual funds and the regulatory framework under which investment companies must operate.

Thomas Sarkany is qualified to serve as a Trustee based on his experience in various business and consulting positions, and through his experience from service as a board member of the Trust and other investment companies. His ability to perform his duties effectively also has been enhanced by his educational background and professional training. In addition to his service as a Trustee of the Trust, Mr. Sarkany serves as a trustee of other registered mutual fund trusts and has previously served as a director of certain public companies.

The Trust does not believe any one factor is determinative in assessing a Trustee's qualifications, but that the collective experience of each Trustee makes them each highly qualified. Unless otherwise noted, the address of each Trustee and Officer is 6100 Chevy Chase Drive, Suite 100, Laurel, MD 20707. The following individuals serve as Trustees and officers of the Trust:

**Independent Trustees:**

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| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;**Name, Address, and Year of Birth** | &nbsp;&nbsp; **Position(s)/Term of Office<sup>(1)</sup>**<br>| &nbsp;&nbsp;**Principal Occupation(s) During the Past 5 Years** | &nbsp;&nbsp;**Number of Portfolios in Fund Complex Overseen by Trustee <sup>(2)</sup>** | &nbsp;&nbsp;**Other Directorships Held by Trustee** |
| &nbsp;&nbsp; Robert Andrialis<br> Born in 1944 | &nbsp;&nbsp;Trustee since 2014 | &nbsp;&nbsp;Independent Consultant (2016–present). | &nbsp;&nbsp;7 | &nbsp;&nbsp;Arrow Investments Trust |
| &nbsp;&nbsp; Paul Montgomery<br> Born in 1953 | &nbsp;&nbsp;Trustee since 2011 | &nbsp;&nbsp;Director of Research, Scotia Partners, LLC (2012–present). | &nbsp;&nbsp;7 | &nbsp;&nbsp;Arrow Investments Trust |
| &nbsp;&nbsp; Thomas Sarkany<br> Born in 1946 | &nbsp;&nbsp;Trustee since 2014 | &nbsp;&nbsp; President and Chief Executive Officer, TTS Associates, Inc. (2022–present); President and Chief Executive Officer, TTS Consultants, LLC (2010–present).<br>| &nbsp;&nbsp;7 | &nbsp;&nbsp;Arrow Investments Trust; Northern Lights Fund Trust II; Northern Lights Fund Trust IV |

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(1)&nbsp;&nbsp;&nbsp;&nbsp; The term of office for each Trustee will continue indefinitely until the individual resigns or is removed.

(2) &nbsp;&nbsp;&nbsp;&nbsp; The "Fund Complex" includes Arrow Investments Trust, a registered management investment company, in addition to the Trust.

**Interested Trustee and Officers:**

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| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;**Name, Address, and Year of Birth** | &nbsp;&nbsp; **Position(s)/Term of Office<sup>(1)</sup>**<br>| &nbsp;&nbsp;**Principal Occupation(s) During the Past 5 Years** | &nbsp;&nbsp;**Number of Funds in the Fund Complex Overseen by Trustee <sup>(2)</sup>** | &nbsp;&nbsp;**Other Directorships Held by Trustee** |
| &nbsp;&nbsp; Joseph Barrato<sup>\*</sup><br> Born in 1965 | &nbsp;&nbsp;Chairman of the Board, Trustee, President, and Principal Executive Officer since 2011 | &nbsp;&nbsp;Founder and Chief Executive Officer, Arrow Investment Advisors, LLC (2006–present). | &nbsp;&nbsp;7 | &nbsp;&nbsp;Arrow Investments Trust |
| &nbsp;&nbsp; Jonathan Guyer<br> Born in 1962 | &nbsp;&nbsp;Chief Compliance Officer since 2025 | &nbsp;&nbsp;Portfolio Manager, Arrow Investment Advisors, LLC (2013-Present) | &nbsp;&nbsp;N/A | &nbsp;&nbsp;N/A |
| &nbsp;&nbsp; Timothy Burdick<sup>(3)</sup><br> Born in 1986 | &nbsp;&nbsp; Secretary<br> since 2020 | &nbsp;&nbsp;Vice President and Managing Counsel, Ultimus Fund Solutions (2022–present); Assistant Vice President, Ultimus Fund Solutions, LLC (2019 – 2022); Senior Program Compliance Manager, CJ Affiliate (2016-2019). | &nbsp;&nbsp;N/A | &nbsp;&nbsp;N/A |
| &nbsp;&nbsp; Sam Singh<sup>(3)</sup><br> Born in 1976 | &nbsp;&nbsp;Principal Financial Officer and Treasurer since 2013 | &nbsp;&nbsp;Vice President (2015–present), Ultimus Fund Solutions, LLC. | &nbsp;&nbsp;N/A | &nbsp;&nbsp;N/A |

---

**\*** Joseph Barrato is considered to be an "interested person" of the Trust, as that term is defined in the 1940 Act, because he is a controlling interest holder of the investment advisor to the Fund, Arrow Investment Advisors, LLC.

(1) The term of office for each Trustee will continue indefinitely until the individual resigns or is removed.
 Officers of the Trust are elected annually.

(2) The "Fund Complex" includes Arrow Investments Trust, a registered management investment company, in
 addition to the Trust.

(3) The business address of this officer is 225 Pictoria Drive, Suite 450,
 Cincinnati, OH 45246.

<u>Board Committees</u>

*Audit Committee*

The Board has an Audit Committee that consists of all Independent Trustees. The Audit Committee's responsibilities include: (i) recommending to the Board the selection, retention or termination of the Trust's independent auditors; (ii) reviewing with the independent auditors the scope, performance and anticipated cost of their audit; (iii) discussing with the independent auditors certain matters relating to the Trust's financial statements, including any adjustment to such financial statements recommended by such independent auditors, or any other results of any audit; (iv) reviewing on a periodic basis a formal written statement from the independent auditors with respect to their independence, discussing with the independent auditors any relationships or services disclosed in the statement that may impact the objectivity and independence of the Trust's independent auditors and recommending that the Board take appropriate action in response thereto to satisfy itself of the auditor's independence; and (v) considering the comments of the independent auditors and management's responses thereto with respect to the quality and adequacy of the Trust's accounting and financial reporting policies and practices and internal controls. The Audit Committee operates pursuant to an Audit Committee Charter. During the fiscal year ended January 31, 2026, the Audit Committee held two meetings.

<u>Trustee Compensation</u>

Each Trustee who is not an interested person of the Trust or Advisor receives a quarterly fee of $4,166 from the Fund Complex (defined below) for his service as a Trustee of the Board of Trustees, as well as reimbursement for any reasonable expenses incurred attending the meetings of the Board of Trustees. The "interested person" who serves as Trustees of the Trust receive no compensation for his services as Trustees. None of the executive officers receive compensation from the Trust.

The table below details the amount of compensation the Trustees received from the Trust during the fiscal year ended January 31, 2026. The Trust does not have a bonus, profit sharing, pension or retirement plan.

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| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;**Name** | &nbsp;&nbsp;**Aggregate Compensation from the Fund<sup>(1)</sup>** | &nbsp;&nbsp;**Pension or Retirement Benefits Accrued as Part of Funds Expenses** | &nbsp;&nbsp;**Estimated Annual Benefits Upon Retirement** | &nbsp;&nbsp;**Total Compensation from Fund and Fund Complex<sub>(2)</sub> Paid to Trustees** |
| &nbsp;&nbsp;Joseph Barrato**\*** | &nbsp;&nbsp;$0 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;$0 |
| &nbsp;&nbsp;Robert S. Andrialis | &nbsp;&nbsp;$8332 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;$16664 |
| &nbsp;&nbsp;Paul Montgomery | &nbsp;&nbsp;$8332 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;$16664 |
| &nbsp;&nbsp;Thomas T. Sarkany | &nbsp;&nbsp;$8332 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;$16664 |

---

**\*** Joseph Barrato is considered to be an "interested person" of the Trust, as that term is defined in the 1940 Act, because he is a controlling interest holder of the investment advisor to the Fund, Arrow Investment Advisors, LLC.

(1) There are multiple series comprising the Fund Complex. Trustees' fees are allocated equally to each Fund in
 the Fund Complex on a pro rata basis, based on the Fund's net assets.

(2) The term "Fund Complex" refers to the Trust and Arrow Investments Trust.

<u>Trustee Ownership</u>

The following table indicates the dollar range of equity securities that each Trustee beneficially owned in the Fund as of December 31, 2025.

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Name of Trustee** | &nbsp;&nbsp;**Dollar Range of Equity Securities in the Fund** | &nbsp;&nbsp;**Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Overseen by Trustee in Family of Investment Companies\*\*** |
| &nbsp;&nbsp;Joseph Barrato**\*** | &nbsp;&nbsp;$10001–$50000 | &nbsp;&nbsp;Over $100,000 |
| &nbsp;&nbsp;Robert S. Andrialis |  |  |
| &nbsp;&nbsp;Paul Montgomery |  |  |
| &nbsp;&nbsp;Thomas T. Sarkany |  |  |

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**\*** Joseph Barrato is considered to be an "interested person" of the Trust, as that term is defined in the 1940 Act, because he is a controlling interest holder of the investment Advisor to the Fund, Arrow Investment Advisors, LLC.

**\*\*** The term "Family of Investment Companies" refers to the Trust and Arrow Investments Trust.

<u>Management Ownership</u>

As of May 5, 2026, the Trustees and officers, as a group, owned less than 1% of the Fund's outstanding shares.

**CONTROL PERSONS AND PRINCIPAL HOLDERS**

A principal shareholder is any person who owns (either of record or beneficially) 5% or more of the outstanding shares of a fund. A control person is one who owns, either directly or indirectly more than 25% of the voting securities of a company or acknowledges the existence of control. A shareholder owning of record or beneficially more than 25% of a Fund's outstanding shares may be considered a controlling person. That shareholder's vote could have more significant effect on matters presented at a shareholder's meeting than votes of other shareholders. The Depository Trust Company ("DTC") or its nominee is the record owner of all outstanding shares and is recognized as the owner of all shares for all purposes. Investors owning shares are beneficial owners as shown on the records of DTC or its participants. As of the date of this SAI, the Trust does not have information regarding the record or beneficial ownership of shares of the Fund held in the names of DTC participants.

**INVESTMENT ADVISOR**

<u>Investment Advisor and Investment Advisory Agreement</u>

The Advisor for the Fund is Arrow Investment Advisors, LLC, located at 6100 Chevy Chase Drive, Suite 100, Laurel, MD 20707. Mr. Joseph Barrato is the controlling shareholder of the Advisor.

Pursuant to the investment advisory agreement (the "Advisory Agreement") with the Trust, on behalf of the Fund, the Advisor, subject to the supervision of the Board, and in conformity with the stated policies of the Fund, manages the operations of the Fund.

Under the Advisory Agreement, the Advisor, under the supervision of the Board, agrees to invest the assets of the Fund in accordance with applicable law and the investment objective, policies and restrictions set forth in the Fund's current Prospectus and SAI, and subject to such further limitations as the Trust may from time to time impose by written notice to the Advisor. The Advisor shall act as the investment advisor to the Fund and, as such shall (i) obtain and evaluate such information relating to the economy, industries, business, securities markets and securities as it may deem necessary or useful in discharging its responsibilities here under, (ii) formulate a continuing program for the investment of the assets of the Fund in a manner consistent with its investment objective, policies and restrictions, and (iii) determine from time to time securities to be purchased, sold, retained or lent by the Fund, and implement those

decisions, including the selection of entities with or through which such purchases, sales or loans are to be effected; provided, that the Advisor will place orders pursuant to its investment determinations either directly with the issuer or with a broker or dealer, and if with a broker or dealer, (a) will attempt to obtain the best price and execution of its orders, and (b) may nevertheless in its discretion purchase and sell portfolio securities from and to brokers who provide the Advisor with research, analysis, advice and similar services and pay such brokers in return a higher commission or spread than may be charged by other brokers. The Advisor also provides the Fund with all necessary office facilities and personnel for servicing the Fund's investments, compensates all officers, Trustees and employees of the Trust who are officers, directors or employees of the Advisor, and all personnel of the Fund or the Advisor performing services relating to research, statistical and investment activities.

A summary of the Board's deliberations approving the renewal of the Advisory Agreement is included in the Form N-CSR dated January 31, 2026.

Pursuant to the Advisory Agreement, the Advisor is entitled to receive, on a monthly basis, 0.75% of the Fund's average daily net assets. Under the Advisory Agreement, the Adviser pays all of the expenses of the Fund out of its unitary fee, except for the fee payment under the Advisory Agreement, acquired fund fees and expenses, payments under the Fund's 12b-1 plan, brokerage expenses, taxes, interest (including borrowing costs and dividend expenses on securities sold short), litigation expense and other extraordinary expenses (including litigation to which the Trust or the Fund may be a party and indemnification of the Trustees and officers with respect thereto).

The Advisory Agreement continued in effect for two (2) years initially and thereafter continues from year to year provided such continuance is approved at least annually by (a) a vote of the majority of the Independent Trustees, cast in person at a meeting specifically called for the purpose of voting on such approval and by (b) the majority vote of either all of the Trustees or the vote of a majority of the outstanding shares of the Fund. The Advisory Agreement may be terminated without penalty on 60 days' written notice by a vote of a majority of the Trustees or by the Advisor, or by holders of a majority of that Trust's outstanding shares. The Advisory Agreement shall terminate automatically in the event of its assignment.

The following table provides information about the advisory fees paid by the Fund to the Advisor during the last three fiscal years:

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Fiscal Year Ended** | &nbsp;&nbsp;**Management Fee** | &nbsp;&nbsp;**Fees Earned by the Adviser** |
| &nbsp;&nbsp;January 31, 2024 | &nbsp;&nbsp;0.75% | &nbsp;&nbsp;$172713 |
| &nbsp;&nbsp;January 31, 2025 | &nbsp;&nbsp;0.75% | &nbsp;&nbsp;$160772 |
| &nbsp;&nbsp;January 31, 2026 | &nbsp;&nbsp;0.75% | &nbsp;&nbsp;$185236 |

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<u>Codes of Ethics</u>

The Trust, the Advisor, and the Distributor each have adopted codes of ethics under Rule 17j-1 under the 1940 Act that governs the personal securities transactions of their respective board members, officers, and employees who may have access to current trading information of the Trust. Under the code of ethics adopted by the Trust, the Trustees are permitted to invest in securities that may also be purchased by the Fund.

In addition, the Trust has adopted a code of ethics that applies to the Trust's principal executive and senior officers (the "Code") to ensure that these officers promote professional conduct in the practice of corporate governance and management. The purpose behind these guidelines is to promote i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; ii) full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the SEC and in other public communications made by the Fund; iii) compliance with applicable governmental laws, rule and regulations; iv) the prompt internal reporting of violations of this Code to an appropriate person or persons identified in the Code; and v) accountability for adherence to the Code.

<u>Proxy Voting Policies</u>

The Board has adopted Proxy Voting Policies and Procedures ("Policies") on behalf of the Trust, which delegate the responsibility for voting proxies of securities held by the Fund to the Advisor or its designee, subject to the Board's continuing oversight. The Policies require that the Advisor or its designee vote proxies received in a manner consistent with the best interests of the Fund and its shareholders. The Policies also require the Advisor or its designee to present to the Board, at least annually, the Advisor's or its designee's Proxy Policies and a record of each proxy voted by the Advisor or its designee on behalf of the Fund, including a report on the resolution of all proxies identified by the Advisor or its designee as involving a conflict of interest. A copy of the Advisor's Proxy Voting Policies is attached hereto as Appendix A.

*More information.* Information regarding how the Fund voted proxies relating to portfolio securities held by the Fund during the most recent 12-month period ending June 30 will be available (1) without charge, upon request, by calling the Fund at 1-877-277-6933; and (2) on the SEC's website at <u>www.sec.gov</u>. In addition, a copy of the Fund's proxy voting policies and procedures are also available by calling 1-877-277-6933 and will be sent within three business days of receipt of a request.

**PORTFOLIO MANAGERS**

Security selections for the Fund are made by a team that consists of the portfolio managers and analysts. The members of the team who are jointly and primarily responsible for the day-to-day management of the Fund are Joseph Barrato and Jonathan S. Guyer. As of January 31, 2026, each was responsible for the management of the following types of accounts. None of the accounts are subject to performance based fees.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Account Type** | **Number of Accounts by Account Type** | **Total Assets by Account Type** | **Number of Accounts by Type Subject to a Performance Fee** | **Total Assets by Account Type Subject to a Performance Fee** |
| ***Joseph Barrato*** | ***Joseph Barrato*** | ***Joseph Barrato*** | ***Joseph Barrato*** | ***Joseph Barrato*** |
| Registered Investment Companies | 7 | $347 M | 0 | $0 |
| Other Pooled Investment Vehicles | 0 | $0 | 0 | $0 |
| Other Accounts | 0 | $0 | 0 | $0 |

---

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| | | | | |
|:---|:---|:---|:---|:---|
| **Account Type** | **Number of Accounts by Account Type** | **Total Assets by Account Type** | **Number of Accounts by Type Subject to a Performance Fee** | **Total Assets by Account Type Subject to a Performance Fee** |
| ***Jonathan Guyer*** | ***Jonathan Guyer*** | ***Jonathan Guyer*** | ***Jonathan Guyer*** | ***Jonathan Guyer*** |
| Registered Investment Companies | 7 | $347M | 0 | $0 |
| Other Pooled Investment Vehicles | 0 | $0 | 0 | $0 |
| Other Accounts | 0 | $0 | 0 | $0 |

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<u>Conflicts of Interest</u>

As the portfolio managers for multiple registered investment company accounts, the portfolio managers make investment decisions for each account based on the investment objectives and policies and other relevant investment considerations applicable to that portfolio. When a portfolio manager has responsibility for managing more than one account, potential conflicts of interest may arise. Those conflicts could include preferential treatment of one account over others in terms of allocation of resources or of investment opportunities. For instance, the Advisor may receive fees from certain accounts that are higher than the fee it receives from the Fund, or it may receive a performance-based fee on certain accounts. In those instances, the portfolio managers may have an incentive to favor the higher fee accounts over the Fund.

When allocating investments among client accounts, the portfolio managers have the fiduciary obligation to treat each client equally, regardless of account size or fees paid. All clients at the same custodian (or trading desk) receive the same average price for each transaction. When multiple trading desks or custodians are used to execute transactions, the portfolio managers execute the trades in such a fashion as to ensure no client grouping consistently receives preferential treatment. When trades in the same security must be executed over multiple days, the portfolio managers execute the trades in a random order to ensure no client grouping consistently receives preferential treatment.

"Cross trades" in which a portfolio manager sells a particular security held by the Fund to another account managed by the Advisor (potentially saving transaction costs for both accounts), could involve a potential conflict of interest if, for example, a portfolio manager is permitted to sell a security from one account to another account at a higher price than the independent third party would pay. The Advisor and the Fund have adopted compliance procedures that provide that any transactions between the Fund and another account managed by the Advisor are to be made at an independent current market price, consistent with applicable laws and regulations.

<u>Compensation</u>

 

As the Chief Executive Officer and Portfolio Manager, Mr. Barrato receives a fixed base salary and discretionary bonus. Mr. Guyer receives a fixed base salary and discretionary bonus from the Advisor.

<u>Ownership</u>

The following table shows the dollar range of equity securities beneficially owned by the portfolio managers in the Fund as of January 31, 2026.

---

| | |
|:---|:---|
| **Name of Portfolio Manager** | **Dollar Range of Equity Securities in the Fund** |
| Joseph Barrato | $10001-$50000 |
| Jonathan S. Guyer |  |

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**DISTRIBUTION OF SHARES**

Archer Distributors, LLC ("Archer"), located at 6100 Chevy Chase Drive, Suite 100, Laurel, MD 20707 serves as the distributor for the Fund pursuant to an ETF Distribution Agreement with the Fund (the "Distribution Agreement"). Archer is an affiliate of the Advisor. Archer also provides marketing services to the Fund, including responsibility for all the Fund's marketing and advertising materials. Archer is registered as a broker-dealer under the Securities Exchange Act of 1934 and each state's securities laws and a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"). The offering of the Fund's Shares is continuous, and the Distributor acts as an agent for the Fund. The Distributor will deliver a Prospectus to persons purchasing Shares in Creation Units and will maintain records of both orders placed with it and confirmations of acceptance furnished by it. The Distributor has no role in determining the investments or investment policies of the Fund.

The Distribution Agreement provides that, unless sooner terminated, it continues in effect for two years initially from the date of the agreement and thereafter shall continue from year to year, subject to annual approval by (a) the Board or a vote of a majority of the outstanding shares, and (b) by a majority of the Trustees who are not parties to the Distribution Agreement or the Trust's distribution plan or interested persons of the Trust or of the Distributor by vote cast in person at a meeting called for the purpose of voting on such approval.

The Distribution Agreement may at any time be terminated, without penalty by the Trust, by vote of a majority of the Independent Trustees or by vote of a majority of the outstanding shares of the Trust on 60 days' written notice to the other party. The Distribution Agreement will automatically terminate in the event of its assignment. The Fund does not pay the Distributor any fees under the Distribution Agreement. However, the Advisor pays an annual fee to the Distributor plus reasonable out-of-pocket expenses incurred by Distributor in connection with activities performed for the Fund, including, without limitation, printing and distribution of prospectuses and shareholder reports, out of its own resources.

The following table provides information about the fees the Advisor paid for Distribution Services during the last three fiscal years:

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| | |
|:---|:---|
| &nbsp;&nbsp;**Fiscal Year Ended** | &nbsp;&nbsp;**Fees Earned by the Distributor** |
| &nbsp;&nbsp;January 31, 2024 | &nbsp;&nbsp;None |
| &nbsp;&nbsp;January 31, 2025 | &nbsp;&nbsp;None |
| &nbsp;&nbsp;January 31, 2026 | &nbsp;&nbsp;None |

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<u>Rule 12b-1 Plan</u>

The Board has adopted a Distribution and Service Plan pursuant to Rule 12b-1 under the 1940 Act (the "Plan"). In accordance with the Plan, the Fund is authorized to pay an amount up to 0.25% of its average daily net assets each year for certain distribution-related activities. In addition, if the payment of management fees by the Fund is deemed to be indirect financing by the Fund of the distribution of its Shares, such payment is authorized by the Plan. The Plan specifically recognizes that the Advisor and other persons may use management fee revenue, as well as past profits or other resources, to pay for expenses incurred in connection with providing services intended to result in the sale of Shares. The Advisor and such other persons, as well as their affiliates, may pay amounts to third parties for distribution or marketing services on behalf of the Fund. The making of the types of payments described in this paragraph could create a conflict of interest for the party receiving such payments. The Plan was adopted in order to permit the implementation of the Fund's method of distribution. No fees are currently paid by the Fund under the Plan, and there are no current plans to impose such fees. In the event such fees were to be charged, over time they would increase the cost of an investment in the Fund.

Under the Plan, the Trustees would receive and review at the end of each quarter a written report provided by the Distributor of the amounts expended under the Plan, if made, and the purpose for which such expenditures were made. The Plan will remain in effect for a period of one year and is renewable from year to year with respect to the Fund, so long as its continuance is approved at least annually (1) by the vote of a majority of the Trustees and (2) by a vote of the majority of those Independent Trustees who have no direct or indirect financial interest in the Plan ("Rule 12b-1 Trustees"), cast in person at a meeting called for the purpose of voting on such approval. The Plan may not be amended to increase materially the amount of fees paid by the Fund unless such amendment is approved by a 1940 Act majority vote of the outstanding Shares and by the Fund Trustees in the manner described above. The Plan is terminable with respect to the Fund at any time by a vote of a majority of the Rule 12b-1 Trustees or by a 1940 Act majority vote of the outstanding

shares. For the fiscal years ended January 31, 2026, 2025, and 2024, the Fund did not pay 12b-1 fees pursuant to the Plan.

**ALLOCATION OF PORTFOLIO BROKERAGE**

Portfolio changes will generally be implemented through in-kind transactions for Creation Units, however the Advisor may execute brokerage transactions for the Fund and the Fund may incur brokerage commissions. Also, the Fund may accept cash as part or all of an in-kind creation or redemption of a Creation Unit, in which case the Advisor may need to execute brokerage transactions for the Fund. The policy of the Advisor regarding purchases and sales of securities is that primary consideration will be given to obtaining the most favorable prices and efficient executions of transactions under the circumstances.

Consistent with this policy, when securities transactions are effected on a stock exchange, the Advisor's policy is to pay commissions that are considered fair and reasonable without necessarily determining that the lowest possible commissions are paid in all circumstances. In seeking to determine the reasonableness of brokerage commissions paid in any transaction, the Advisor relies upon its experience and knowledge regarding commissions generally charged by various brokers. The sale of Shares by a broker-dealer is not a factor in the selection of broker-dealers.

In seeking to implement its policies, the Advisor effects transactions with those brokers and dealers that the Advisor believes provide the most favorable prices and are capable of providing efficient executions. The Advisor and its affiliates do not currently participate in soft dollar arrangements.

The Advisor assumes general supervision over placing orders on behalf of the Fund for the purchase or sale of portfolio securities. If purchases or sales of portfolio securities by the Fund and one or more other investment companies or clients supervised by the Advisor are considered at or about the same time, transactions in such securities are allocated among the Fund, the several investment companies and clients in a manner deemed equitable to all by the Advisor. In some cases, this procedure could have a detrimental effect on the price or volume of the security as far as the Fund is concerned. However, in other cases, it is possible that the ability to participate in volume transactions and to negotiate lower brokerage commissions will be beneficial to the Fund. The primary consideration is prompt execution of orders at the most favorable net price under the circumstances.

Purchases and sales of fixed-income securities for the Fund usually are principal transactions and ordinarily are purchased directly from the issuer or from an underwriter or broker-dealer. The Fund does not usually pay brokerage commissions in connection with such purchases and sales, although purchases of new issues from underwriters of securities typically include a commission or concession paid by the issuer to the underwriter, and purchases from dealers serving as market-makers typically include a dealer's mark-up (i.e., a spread between the bid and the ask prices).

The following table provides information about the brokerage commissions paid with respect to the Fund during the last three fiscal years:

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| | |
|:---|:---|
| &nbsp;&nbsp;**Fiscal Year Ended** | &nbsp;&nbsp;**Commission Paid** |
| &nbsp;&nbsp;January 31, 2024 | &nbsp;&nbsp;$10562 |
| &nbsp;&nbsp;January 31, 2025 | &nbsp;&nbsp;$8220 |
| &nbsp;&nbsp;January 31, 2026 | &nbsp;&nbsp;$8553 |

---

**PORTFOLIO TURNOVER**

The Fund's portfolio turnover rate is calculated by dividing the lesser of purchases or sales of portfolio securities for the fiscal year by the monthly average of the value of the portfolio securities owned by the Fund during the fiscal year. The calculation excludes from both the numerator and the denominator securities with at the time of acquisition of one year or less. High portfolio turnover involves correspondingly greater brokerage commissions and other transaction costs, which will be borne directly by the Fund. A 100% turnover rate would occur if all of the Fund's portfolio securities were replaced once within a one-year period. The Portfolio may engage in active trading to achieve its investment objectives and may experience episodes of substantial portfolio turnover. For the fiscal year ended January 31, 2025, the portfolio turnover rate was 95%. For the fiscal year ended January 31, 2026, the portfolio turnover rate was 91%.

**OTHER SERVICE PROVIDERS**

<u>Fund Administration and Fund Accounting</u>

The Administrator for the Fund is Ultimus Fund Solutions, LLC (the "Administrator"), which has its principal office at 225 Pictoria Drive, Suite 450, Cincinnati, OH 45246, and is primarily in the business of providing administrative, fund accounting and transfer agent services to retail and institutional mutual funds.

Pursuant to a Fund Services Agreement with the Trust, on behalf of the Fund, the Administrator provides administrative services to the Fund, subject to the supervision of the Board. The Administrator may provide persons to serve as officers of the Trust. Such officers may be directors, officers, or employees of Administrator or its affiliates.

The Fund Services Agreement is dated September 27, 2021. The Fund Services Agreement remains in effect for two years from the date of its initial approval and will remain in effect subject to annual approval of the Board for twelve-month periods thereafter. The Fund Services Agreement is terminable by the Board or the Administrator on 90 days' written notice and may be assigned provided the non-assigning party provides prior written consent. The Fund Services Agreement provides that in the absence of willful misfeasance, bad faith, or gross negligence on the part of the Administrator or reckless disregard of its obligations thereunder, the Administrator shall not be liable for any action or failure to act in accordance with its duties thereunder.

Under the Fund Services Agreement, the Administrator provides facilitating administrative services, including: (i) providing services of persons competent to perform such administrative and clerical functions as are necessary to provide effective administration of the Fund; (ii) facilitating the performance of administrative and professional services to the Fund by others, including the custodian; (iii) preparing, but not paying for, the periodic updating of the Fund's Registration Statement, Prospectus and Statement of Additional Information in conjunction with Trust counsel, including the printing of such documents for the purpose of filings with the SEC and state securities administrators, and preparing reports to the Fund's shareholders and the SEC;(iv) preparing in conjunction with Trust counsel, but not paying for, all filings under the securities or "Blue Sky" laws of such states or countries as are designated by the Distributor, if any; (v) in consultation with Trust counsel, the Advisor, officers of the Trust and other relevant parties, preparing notices and agendas for meetings of the Board and minutes of such meetings in all matters required by the 1940 Act to be acted upon by the Board; and (vi) monitoring daily and periodic compliance with respect to all requirements and restrictions of the 1940 Act, the Internal Revenue Code and the Prospectus.

The Administrator also provides the Fund with accounting services, including: (i) daily computation of net asset value; (ii) maintenance of security ledgers and books and records as required by the 1940 Act; (iii) production of the Fund's listing of portfolio securities and general ledger reports; (iv) reconciliation of accounting records; (v) calculation of yield and total return for the Fund; (vi) maintenance of certain books and records described in Rule 31a-1 under the 1940 Act, and reconciliation of account information and balances among the custodian and Advisor; and (vii) monitoring and evaluation daily income and expense accruals, and sales and redemptions of shares of the Fund. For the services rendered to the Fund under the Fund Services Agreement, the Administrator receives the greater of an annual minimum fee or an asset based fee, which scales downward based upon net assets for fund administration and fund accounting. The Fund also reimburses the Administrator for any out-of-pocket expenses.

<u>Transfer Agent and Custodian</u>

Brown Brothers Harriman & Co. ("BBH"), which has a principal office at 50 Post Office Square, Boston, MA 02110, acts as transfer, dividend disbursing, and shareholder servicing agent for the Fund and also serves as the custodian of the Fund's assets pursuant to a

Custodian and Transfer Agent Agreement by and between BBH and the Trust on behalf of the Fund. Under the Custodian and Transfer Agent Agreement, BBH, acting as the Fund's transfer agent, is responsible for administering and performing transfer agent functions, dividend distribution, and maintaining necessary records in accordance with applicable rules and regulations. Additionally, acting as the Fund's custodian, BBH's responsibilities include safeguarding and controlling the Fund's cash and securities, handling the receipt and delivery of securities, collecting interest and dividends on the Fund's investments, maintaining original entry documents and books of record and general ledgers; postings cash receipts and disbursements; and maintaining records of purchases and sales based upon communications from the Advisor. The Fund may employ foreign sub-custodians that are approved by the Board to hold foreign assets. As compensation for these services, the Transfer Agent receives certain out-of-pocket costs, transaction fees and asset-based fees, which are accrued daily and paid monthly by the Advisor from its management fee.

<u>Index Provider</u>

The Underlying Index is calculated and maintained by CME Group Index Services LLC (d/b/a Dow Jones) (the "Index Provider"). The Index Provider is not affiliated with the Trust, the Advisor or the Distributor. The Advisor has entered into a license agreement with the Index Provider. The Fund is entitled to use the Underlying Index pursuant to a sub-licensing agreement with the Advisor.

No entity that creates, compiles, sponsors or maintains the Underlying Index is or will be an affiliated person, as defined in Section 2(a)(3) of the 1940 Act, or an affiliated person of an affiliated person, of the Trust, the Advisor, the Distributor or a promoter of the Fund.

Neither the Advisor nor any affiliate of the Advisor has any right to influence the selection of the securities in the Underlying Index.

The Fund is based upon the Dow Jones Global Composite Yield Index. Additional information about the Fund's Underlying Index methodology is set forth in the Prospectus.

<u>Disclaimers</u>

The "The Dow Jones Global Composite Yield Index" (the "Index") is a product of S&P Dow Jones Indices LLC ("SPDJI"), and has been licensed for use by Arrow Investment Advisors, LLC ("Licensee"). Standard & Poor's® and S&P® are registered trademarks of Standard & Poor's Financial Services LLC ("S&P"); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Licensee. The Fund is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, any of their respective affiliates (collectively, "S&P Dow Jones Indices"). S&P Dow Jones Indices makes no representation or warranty, express or implied, to the owners of the Fund or any member of the public regarding the advisability of investing in securities generally or in the Fund particularly or the ability of the Index to track general market performance. S&P Dow Jones Indices' only relationship to Licensee with respect to the Index is the licensing of the Index and certain trademarks, service marks and/or trade names of S&P Dow Jones Indices and/or its licensors.

The Index is determined, composed and calculated by S&P Dow Jones Indices without regard to Licensee or the Fund. S&P Dow Jones Indices have no obligation to take the needs of Licensee or the owners of the Fund into consideration in determining, composing or calculating the Index. S&P Dow Jones Indices are not responsible for and have not participated in the determination of the prices, and amount of the Shares or the timing of the issuance or sale of the Shares or in the determination or calculation of the equation by which the Fund is to be converted into cash, surrendered or redeemed, as the case may be. S&P Dow Jones Indices have no obligation or liability in connection with the administration, marketing or trading of the Fund. There is no assurance that investment products based on the Index will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC is not an investment advisor. Inclusion of a security within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security, nor is it considered to be investment advice.

S&P DOW JONES INDICES DOES NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW JONES INDICES MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE FUND, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR WITH RESPECT TO ANY DATA RELATED THERETO.WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND LICENSEE, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.

**DESCRIPTION OF SHARES**

Each share of beneficial interest of the Trust has one vote in the election of Trustees. Cumulative voting is not authorized for the Trust. This means that the holders of more than 50% of the shares voting for the election of Trustees can elect 100% of the Trustees if they choose to do so, and, in that event, the holders of the remaining shares will be unable to elect any Trustees.

Shareholders of the Trust and any other future series of the Trust will vote in the aggregate and not by series except as otherwise required by law or when the Board determines that the matter to be voted upon affects only the interest of the shareholders of a particular series or classes. Matters such as election of Trustees are not subject to separate voting requirements and may be acted upon by shareholders of the Trust voting without regard to series. Each class of shares of the Fund may vote separately on matters related to its Rule 12b-1 Plan.

The Trust is authorized to issue an unlimited number of shares of beneficial interest. Each share has equal dividend, distribution and liquidation rights. There are no conversion or preemptive rights applicable to any shares of the Fund. All shares issued are fully paid and non-assessable.

**BOOK ENTRY ONLY SYSTEM**

The following information supplements and should be read in conjunction with the section in the Prospectus entitled "Book Entry." DTC Acts as Securities Depository for Shares. Shares of the Fund are represented by securities registered in the name of DTC or its nominee and deposited with, or on behalf of, DTC.

DTC, a limited purpose trust company, was created to hold securities of its participants (the "DTC Participants") and to facilitate the clearance and settlement of securities transactions among the DTC Participants in such securities through electronic book entry changes in accounts of the DTC Participants, thereby eliminating the need for physical movement of securities certificates. DTC Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own DTC. More specifically, DTC is owned by a number of its DTC Participants and by New York Stock Exchange, Inc. ("NYSE") and FINRA. Access to the DTC system is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly (the "Indirect Participants").

Beneficial ownership of Shares is limited to DTC Participants, Indirect Participants and persons holding interests through DTC Participants and Indirect Participants. Ownership of beneficial interests in Shares (owners of such beneficial interests are referred to herein as "Beneficial Owners") is shown on, and the transfer of ownership is effected only through, records maintained by DTC (with respect to DTC Participants) and on the records of DTC Participants (with respect to Indirect Participants and Beneficial Owners that are not DTC Participants). Beneficial Owners will receive from or through the DTC Participant a written confirmation relating to their purchase and sale of Shares. Conveyance of all notices, statements and other communications to Beneficial Owners is effected as follows. Pursuant to the Depositary Agreement between the Trust and DTC, DTC is required to make available to the Trust upon request and for a fee to be charged to the Trust a listing of the Shares of the Fund held by each DTC Participant. The Trust shall inquire of each such DTC Participant as to the number of Beneficial Owners holding Shares, directly or indirectly, through such DTC Participant. The Trust shall provide each such DTC Participant with copies of such notice, statement or other communication, in such form, number and at such place as such DTC Participant may reasonably request, in order that such notice, statement or communication may be transmitted by such DTC Participant, directly or indirectly, to such Beneficial Owners.

In addition, the Trust shall pay to each such DTC Participant a fair and reasonable amount as reimbursement for the expenses attendant to such transmittal, all subject to applicable statutory and regulatory requirements. Fund distributions shall be made to DTC or its nominee, Cede & Co., as the registered holder of all Shares. DTC or its nominee, upon receipt of any such distributions, shall immediately credit DTC Participants' accounts with payments in amounts proportionate to their respective beneficial interests in Shares of the Fund as shown on the records of DTC or its nominee. Payments by DTC Participants to Indirect Participants and Beneficial Owners of Shares held through such DTC Participants will be governed by standing instructions and customary practices, and will be the responsibility of such DTC Participants.

The Trust has no responsibility or liability for any aspect of the records relating to or notices to Beneficial Owners, or payments made on account of beneficial ownership interests in such Shares, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests, or for any other aspect of the relationship between DTC and the DTC Participants or the relationship between such DTC Participants and the Indirect Participants and Beneficial Owners owning through such DTC Participants. DTC may decide to discontinue providing its service with respect to Shares at any time by giving reasonable notice to the Trust and discharging its responsibilities with respect thereto under applicable law.

Under such circumstances, the Trust shall take action to find a replacement for DTC to perform its functions at a comparable cost.

**ANTI-MONEY LAUNDERING PROGRAM**

The Trust has established an Anti-Money Laundering Compliance Program (the "Program") as required by Section 352 the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 ("USA PATRIOT Act"). To ensure compliance with this law, the Trust's Program is written and has been approved by the Board of Trustees. The Program provides for the development of policies, procedures and internal controls reasonably designed to prevent laundering, the designation of an anti-money laundering compliance officer who is responsible for implementing and monitoring the Program, ongoing anti-money laundering training for appropriate persons and an independent audit function to determine the effectiveness of the Program.

Procedures to implement the Program include, but are not limited to, determining that the Fund's Distributor and Transfer Agent have established reasonable anti-money laundering procedures, have reported suspicious and/or fraudulent activity and have completed thorough reviews of all new opening account applications. The Trust will not transact business with any person or entity whose identity cannot be adequately verified under the provisions of the USA PATRIOT Act.

Broker-dealers and other financial intermediaries operate pursuant to their own Anti-Money Laundering programs, and as a result of such program, a broker or financial intermediary may be required to "freeze" the account of a shareholder if the shareholder appears to be involved in suspicious activity or if certain account information matches information on government lists of known terrorists or other suspicious persons.

**PURCHASE, REDEMPTION AND PRICING OF SHARES**

<u>Calculation of Share Price</u>

As indicated in the Prospectus under the heading "Net Asset Value," net asset value of the Fund's shares is determined by dividing the total value of the Fund's portfolio investments and other assets, less any liabilities, by the total number of shares outstanding of the Fund.

Generally, the Fund's domestic securities (including underlying ETFs which hold portfolio securities primarily listed on foreign (non-U.S.) exchanges) are valued each day at the last quoted sales price on each security's primary exchange. Securities traded or dealt in upon one or more securities exchanges for which market quotations are readily available and not subject to restrictions against resale shall be valued at the last quoted sales price on the primary exchange or, in the absence of a sale on the primary exchange, at the current bid price on such exchange.

If market quotations are not readily available, securities will be valued at their fair market value as determined in good faith by the Fund's Valuation Designee in accordance with procedures approved by the Board and as further described below. Securities that are not traded or dealt in any securities exchange (whether domestic or foreign) and for which over-the-counter market quotations are readily available generally shall be valued at the last sale price or, in the absence of a sale, at the mean between the current bid price on such over-the- counter market.

Certain securities or investments for which daily market quotes are not readily available may be valued, pursuant to guidelines established by the Board, with reference to other securities or indices. Debt securities not traded on an exchange may be valued at prices supplied by a pricing agent(s) based on broker or dealer supplied valuations or matrix pricing, a method of valuing securities by reference to the value of other securities with similar characteristics, such as rating, interest rate and maturity. Short-term investments having a maturity of 60 days or less may be generally valued at amortized cost when it approximated fair value.

Exchange traded options are valued at the last quoted sales price or, in the absence of a sale, at the mean between the current bid and ask prices on the exchange on which such options are traded. If an acceptable quotation is unavailable for a particular contract, that contract will be priced at the mean of the valuations of the two most widely accepted and well documented methods for deriving prices for option contracts, the Black-Scholes model and the binomial model, as of the stock market close. Other securities for which market quotes are not readily available are valued at fair value as determined in good faith by the Valuation Designee. Swap agreements and other derivatives are generally valued daily based upon quotations from market makers or by a pricing service in accordance with the valuation procedures approved by the Board.

Securities traded on a foreign exchange which has not closed by the close of regular trading on the Exchange (normally 4:00 p.m., Eastern time) (the "Exchange Close")or for which the official closing prices are not available at the time the NAV is determined may use alternative market prices provided by a pricing service. The Fund may use an independent pricing service to calculate the fair market value of foreign equity securities on a daily basis by applying valuation factors to the last sale price or the mean price as noted above.

The fair market values supplied by the independent pricing service will generally reflect market trading that occurs after the close of the applicable foreign markets of comparable securities or the value of other instruments that have a strong correlation to the fair-valued securities. The independent pricing service will also take into account the current relevant currency exchange rate.

A security that is fair valued may be valued at a price higher or lower than actual market quotations or the value determined by other funds using their own fair valuation procedures. Because foreign securities may trade on days when Fund shares are not priced, the value of securities held by the Fund can change on days when Fund shares cannot be redeemed or purchased.

In the event that a foreign security's market quotations are not readily available or are deemed unreliable (for reasons other than because the foreign exchange on which it trades closed before the Fund's calculation of NAV), the security will be valued at its fair market value as determined in good faith by the Fund's Valuation Designee in accordance with procedures approved by the Board as discussed below. Without fair valuation, it is possible that short-term traders could take advantage of the arbitrage opportunity and dilute the NAV of long-term investors. Fair valuation of the Fund's portfolio securities can serve to reduce arbitrage opportunities available to short-term traders, but there is no assurance that it will prevent dilution of the Fund's NAV by short-term traders. In addition, because the Fund may invest in underlying ETFs which hold portfolio securities primarily listed on foreign (non-U.S.) exchanges, and these exchanges may trade on weekends or other days when the underlying ETFs do not price their shares, the value of these portfolio securities may change on days when you may not be able to buy or sell Fund shares.

Investments initially valued in currencies other than the U.S. dollar are converted to U.S. dollars using exchange rates obtained from pricing services. As a result, the NAV of the Fund's shares may be affected by changes in the value of currencies in relation to the U.S. dollar. The value of securities traded in markets outside the United States or denominated in currencies other than the U.S. dollar may be affected significantly on a day that the New York Stock Exchange is closed and an investor is not able to purchase, redeem or exchange shares.

Fund shares are valued at the Exchange Close on each day that the Exchange is open. For purposes of calculating the NAV, the Fund normally use pricing data for domestic equity securities received shortly after the Exchange Close and does not normally take into account trading, clearances or settlements that take place after the Exchange Close. Domestic fixed income and foreign securities are normally priced using data reflecting the earlier closing of the principal markets for those securities. Information that becomes known to the Fund or its agents after the NAV has been calculated on a particular day will not generally be used to retroactively adjust the price of the security or the NAV determined earlier that day.

When market quotations are insufficient or not readily available, the Fund may value securities at fair value or estimate their value as determined in good faith by the Valuation Designee, pursuant to procedures approved by the Board. Fair valuation may also be used by the Board if extraordinary events occur after the close of the relevant market but prior to the NYSE Close.

In compliance with Rule 2a-5 under the 1940 Act, the Board has designated the Advisor as the valuation designee. The Advisor, as the Valuation Designee, performs the fair value determinations relating to Fund investments and is responsible for periodically assessing any material risks associated with the determination of the fair value of a Fund's investments; establishing and applying fair value methodologies; testing the appropriateness of fair value methodologies; and overseeing and evaluating third-party pricing services. The Board oversees the Advisor in its role as Valuation Designee pursuant to Rule 2a-5.

<u>Creation Units</u>

The Fund sells and redeems Shares in Creation Units on a continuous basis through the Distributor, without a sales load, at the NAV next determined after receipt of an order in proper form on any Business Day. A "Business Day" is any day on which the NYSE is open for business. As of the date of this SAI, the NYSE observes the following holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Juneteenth, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

A Creation Unit is an aggregation of 75,000 Shares. The Board may declare a split or a consolidation in the number of Shares outstanding of the Fund or Trust, and make a corresponding change in the number of Shares in a Creation Unit.

<u>Authorized Participants</u>

To purchase or redeem any Creation Units, you must be, or transact through, an Authorized Participant. In order to be an Authorized Participant, you must be either a broker-dealer or other participant ("Participating Party") in the Continuous Net Settlement System ("Clearing Process") of the NSCC or a participant in DTC with access to the DTC system ("DTC Participant"), and you must execute an agreement ("Participant Agreement") with the Distributor that governs transactions in the Fund's Creation Units.

Investors who are not Authorized Participants but want to transact in Creation Units may contact the Distributor for the names of Authorized Participants. An Authorized Participant may require investors to enter into a separate agreement to transact through it for Creation Units and may require orders for purchases of shares placed with it to be in a particular form.

Investors transacting through a broker that is not itself an Authorized Participant and therefore must still transact through an Authorized Participant may incur additional charges. There are expected to be a limited number of Authorized Participants at any one time.

Orders must be transmitted by an Authorized Participant by telephone or other transmission method acceptable to the Distributor. Market disruptions and telephone or other communication failures may impede the transmission of orders.

<u>Transaction Fees</u>

A fixed fee payable to the Custodian is imposed on each creation and redemption transaction regardless of the number of Creation Units involved in the transaction ("Fixed Fee"). Purchases and redemptions of Creation Units for cash or involving cash-in-lieu (as defined below) are required to pay an additional variable charge to compensate the Fund and its ongoing shareholders for brokerage and market impact expenses relating to Creation Unit transactions ("Variable Charge," and together with the Fixed Fee, the "Transaction Fees"). With the approval of the Board, the Advisor may waive or adjust the Transaction Fees, including the Fixed Fee and/or Variable Charge (shown in the table below), from time to time. In such cases, the Authorized Participant will reimburse the Fund for, among other things, any difference between the market value at which the securities and/or financial instruments were purchased by the Fund and the cash-in-lieu amount, applicable registration fees, brokerage commissions and certain taxes. In addition, purchasers of Creation Units are responsible for the costs of transferring the Deposit Securities to the account of the Fund.

Investors who use the services of a broker, or other such intermediary may be charged a fee for such services. The Transaction Fees for the Fund are listed in the table below.

---

| | |
|:---|:---|
| &nbsp;&nbsp;**Fixed Fee** | &nbsp;&nbsp;**Maximum Additional Variable Charge for Cash Purchases\*** |
| &nbsp;&nbsp;$3170 | &nbsp;&nbsp;2.00% |

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**\*** As a percentage of the amount invested.

<u>The Clearing Process</u>

Transactions by an Authorized Participant that is a Participating Party using the NSCC system are referred to as transactions "through the Clearing Process." Transactions by an Authorized Participant that is a DTC Participant using the DTC system are referred to as transactions "outside the Clearing Process." The Clearing Process is an enhanced clearing process that is available only for certain securities and only to DTC participants that are also participants in the Continuous Net Settlement System of the NSCC. In-kind (portions of) purchase orders not subject to the Clearing Process will go through a manual clearing process run by DTC. Portfolio Deposits that include government securities must be delivered through the Federal Reserve Bank wire transfer system ("Federal Reserve System").

Fund Deposits that include cash may be delivered through the Clearing Process or the Federal Reserve System. In-kind deposits of securities for orders outside the Clearing Process must be delivered through the Federal Reserve System (for government securities) or through DTC (for corporate securities).

<u>Foreign Securities</u>

Because the portfolio securities of the Fund may trade on days that the Exchange is closed or are otherwise not Business Days for the Fund, shareholders may not be able to redeem their shares of the Fund, or to purchase or sell shares of the Fund on the Exchange, on days when the NAV of the Fund could be significantly affected by events in the relevant foreign markets.

<u>Purchasing Creation Units</u>

*Portfolio Deposit*. The consideration for a Creation Unit generally consists of the Deposit Securities and a Cash Component. Together, the Deposit Securities and the Cash Component constitute the "Portfolio Deposit." The Cash Component serves the function of compensating for any differences between the net asset value per Creation Unit and the Deposit Securities. Thus, the Cash Component is equal to the difference between (x) the net asset value per Creation Unit of the Fund and (y) the market value of the Deposit Securities. If (x) is more than (y), the Authorized Participant will pay the Cash Component to the Fund. If (x) is less than (y), the Authorized Participant will receive the Cash Component from the Fund.

On each Business Day, prior to the opening of business on the Exchange (currently 9:30 a.m., Eastern Time), the Advisor through the Custodian makes available through NSCC the name and amount of each Deposit Security in the current Portfolio Deposit (based on information at the end of the previous Business Day) for the Fund and the (estimated) Cash Component, effective through and including the previous Business Day, per Creation Unit. The Deposit Securities announced are applicable, subject to any adjustments as described below, to purchases of Creation Units until the next announcement of Deposit Securities. Payment of any stamp duty or the like shall be the sole responsibility of the Authorized Participant purchasing a Creation Unit. The Authorized Participant must ensure that all Deposit Securities properly denote change in beneficial ownership.

*Custom Orders and Cash-in-Lieu*. The Fund may, in its sole discretion, permit or require the substitution of an amount of cash ("cash-in-lieu") to be added to the Cash Component to replace any Deposit Security. The Fund may permit or require cash-in-lieu when, for example, a Deposit Security may not be available in sufficient quantity for delivery or may not be eligible for transfer through the systems of DTC or the Clearing Process.

Similarly, the Fund may permit or require cash-in-lieu of Deposit Securities when, for example, the Authorized Participant or its

underlying investor is restricted under U.S. or local securities laws or policies from transacting in one or more Deposit Securities. The Fund will comply with the federal securities laws in accepting Deposit Securities including that the Deposit Securities are sold in transactions that would be exempt from registration under the Securities Act. All orders involving cash-in-lieu are considered to be "Custom Orders."

*Purchase Orders*. To order a Creation Unit, an Authorized Participant must submit an irrevocable purchase order to the Distributor.

<u>Timing of Submission of Purchase Orders</u>

An Authorized Participant must submit an irrevocable purchase order no later than the earlier of (i) 4:00 p.m. Eastern Time or (ii) the closing time of the bond markets and/or the trading session on the Exchange, on any Business Day in order to receive that Business Day's NAV ("Cut-off Time"). The Cut-off Time for Custom Orders is generally two hours earlier. The Business Day the order is deemed received by the Distributor is referred to as the "Transmittal Date." An order to create Creation Units is deemed received on a Business Day if (i) such order is received by the Distributor by the Cut-off Time on such day and (ii) all other procedures set forth in the Participant Agreement are properly followed. Persons placing or effectuating custom orders and/or orders involving cash should be mindful of time deadlines imposed by intermediaries, such as DTC and/or the Federal Reserve Bank wire system, which may impact the successful processing of such orders to ensure that cash and securities are transferred by the "Settlement Date," which is generally the Business Day immediately following the Transmittal Date ("T+1") for cash and the second Business Day following the Transmittal Date for securities ("T+2").

<u>Orders Using the Clearing Process</u>

If available, (portions of) orders may be settled through the Clearing Process. In connection with such orders, the Distributor transmits, on behalf of the Authorized Participant, such trade instructions as are necessary to effect the creation order. Pursuant to such trade instructions, the Authorized Participant agrees to deliver the requisite Portfolio Deposit to the Fund, together with such additional information as may be required by the Distributor. Cash Components will be delivered using either the Clearing Process or the Federal Reserve System.

<u>Orders Outside the Clearing Process</u>

If the Clearing Process is not available for (portions of) an order, Portfolio Deposits will be made outside the Clearing Process. Orders outside the Clearing Process must state that the DTC Participant is not using the Clearing Process and that the creation of Creation Units will be effected through DTC. The Portfolio Deposit transfer must be ordered by the DTC Participant on the Transmittal Date in a timely fashion so as to ensure the delivery of Deposit Securities (whether standard or custom) through DTC to the Fund account by 11:00 a.m., Eastern time, on T+1. The Cash Component, along with any cash-in-lieu and Transaction Fee, must be transferred directly to the Custodian through the Federal Reserve System in a timely manner so as to be received by the Custodian no later than 12:00 p.m., Eastern Time, on T+1. If the Custodian does not receive both the Deposit Securities and the cash by the appointed time, the order may be canceled. A canceled order may be resubmitted the following Business Day but must conform to that Business Day's Portfolio Deposit. Authorized Participants that submit a canceled order will be liable to the Fund for any losses incurred by the Fund in connection therewith.

Orders involving foreign Deposit Securities are expected to be settled outside the Clearing Process. Thus, upon receipt of an irrevocable purchase order, the Distributor will notify the Advisor and the Custodian of such order. The Custodian, who will have caused the appropriate local sub-custodian(s) of the Fund to maintain an account into which an Authorized Participant may deliver Deposit Securities (or cash-in-lieu), with adjustments determined by the Fund, will then provide information of the order to such local sub-custodian(s). The ordering Authorized Participant will then deliver the Deposit Securities (and any cash-in-lieu) to the Fund's n account at the applicable local sub-custodian. The Authorized Participant must also make available on or before the contractual settlement date, by means satisfactory to the Fund, immediately available or same day funds in U.S. dollars estimated by the Fund to be sufficient to pay the Cash Component and Transaction Fee.

When a relevant local market is closed due to local market holidays, the local market settlement process will not commence until the end of the local holiday period. Settlement must occur by 2:00 p.m., Eastern Time, on the contractual settlement date.

<u>Acceptance of Purchase Order</u>

All questions as to the number of shares of each security in the Deposit Securities and the validity, form, eligibility and acceptance for deposit of any securities to be delivered shall be determined by the Fund. The Fund's determination shall be final and binding. The Fund reserves the absolute right to reject or revoke acceptance of a purchase order transmitted to it by the Distributor if (a) the order is not in proper form; (b) the investor(s), upon obtaining the shares ordered, would own 80% or more of the currently outstanding shares of the Fund; (c) the Deposit Securities delivered do not conform to the Deposit Securities for the applicable date; (d) acceptance of the Deposit Securities would have certain adverse tax consequences to the Fund; (e) the acceptance of the Portfolio Deposit would, in the opinion of counsel, be unlawful; (f) the acceptance of the Portfolio Deposit would otherwise, in the discretion of the Trust, Fund or the

Advisor, have an adverse effect on the Trust, Fund or the rights of beneficial owners; or (g) in the event that circumstances outside the control of the Trust, the Distributor and the Advisor make it for all practical purposes impossible to process purchase orders. Examples of such circumstances include acts of God; public service or utility problems resulting in telephone, telecopy or computer failures; fires, floods or extreme weather conditions; market conditions or activities causing trading halts; systems failures involving computer or other informational systems affecting the Trust, the Distributor, DTC, NSCC, the Advisor, the Custodian, a sub-custodian or any other participant in the creation process; and similar extraordinary events. The Distributor shall notify an Authorized Participant of its rejection of the order. The Fund, the Custodian, any sub-custodian and the Distributor are under no duty, however, to give notification of any defects or irregularities in the delivery of Portfolio Deposits, and they shall not incur any liability for the failure to give any such notification.

<u>Issuance of a Creation Unit.</u>

Once the Fund has accepted an order, upon next determination of the Fund's NAV, the Fund will confirm the issuance of a Creation Unit, against receipt of payment, at such NAV. The Distributor will transmit a confirmation of acceptance to the Authorized Participant that placed the order.

Except as provided below, a Creation Unit will not be issued until the Fund obtains good title to the Deposit Securities and the Cash Component, along with any cash-in-lieu and Transaction Fee. Except as provided below under "Delivery of Redemption Basket", the delivery of Creation Units will generally occur no later than T+2. In certain cases, Authorized Participants will create and redeem Creation Units on the same trade date. In these instances, the Trust reserves the right to settle these transactions on a net basis.

With respect to orders involving foreign Deposit Securities, when the applicable local sub-custodian(s) have confirmed to the Custodian that the Deposit Securities (or cash-in-lieu) have been delivered to the Fund's account at the applicable local sub-custodian(s), the Distributor and the Advisor shall be notified of such delivery, and the Fund will issue and cause the delivery of the Creation Unit.

While, as stated above, Creation Units are generally delivered on T+2 , as discussed below under "Delivery of Redemption Basket" the Fund may settle Creation Unit transactions on a basis other than T+2 in order to accommodate foreign market holiday schedules, to account for different treatment among foreign and U.S. markets of dividend record dates and ex-dividend dates (that is the last day the holder of a security can sell the security and still receive dividends payable on the security), and in certain other circumstances.

The Fund may issue a Creation Unit prior to receiving good title to the Deposit Securities, under the following circumstances. Pursuant to the applicable Participant Agreement, the Fund may issue a Creation Unit notwithstanding that (certain) Deposit Securities have not been delivered, in reliance on an undertaking by the relevant Authorized Participant to deliver the missing Deposit Securities as soon as possible, which undertaking is secured by such Authorized Participant's delivery to and maintenance with the Custodian of collateral having a value equal to at least 105% of the value of the missing Deposit Securities ("Collateral"), as adjusted by time to time by the Advisor. Such Collateral will have a value greater than the NAV of the Creation Unit on the date the order is placed. Such collateral must be delivered no later than 2:00 p.m., Eastern Time, on T+1. The only Collateral that is acceptable to the Fund is cash in U.S. Dollars.

While (certain) Deposit Securities remain undelivered, the Collateral shall at all times have a value equal to at least 105% (as adjusted by the Advisor) of the daily marked-to-market value of the missing Deposit Securities. At any time, the Fund may use the Collateral to purchase the missing securities, and the Authorized Participant will be liable to the Fund for any costs incurred thereby or losses resulting therefrom, whether or not they exceed the amount of the Collateral, including any Transaction Fee, any amount by which the purchase price of the missing Deposit Securities exceeds the market value of such securities on the Transmittal Date, brokerage and other transaction costs. The Trust will return any unused Collateral once all of the missing securities have been received by the Fund. More information regarding the Fund's current procedures for collateralization is available from the Distributor.

<u>Cash Purchase Method</u>

When cash purchases of Creation Units are available or specified for the Fund, they will be effected in essentially the same manner as in-kind purchases. In the case of a cash purchase, the investor must pay the cash equivalent of the Portfolio Deposit. In addition, cash purchases will be subject to Transaction Fees, as described above.

<u>Redeeming a Creation Unit</u>

*Redemption Basket*. The consideration received in connection with the redemption of a Creation Unit generally consists of an in-kind basket of designated securities ("Redemption Securities") and an amount of cash in U.S. dollars ("Cash Component"). Together, the Redemption Securities and the Cash Component constitute the "Redemption Basket." There can be no assurance that there will be sufficient liquidity in Shares in the secondary market to permit assembly of a Creation Unit. In addition, investors may incur brokerage and other costs in connection with assembling a Creation Unit.

The Cash Component serves the function of compensating for any differences between the net asset value per Creation Unit and the Redemption Securities. Thus, the Cash Component is equal to the difference between (x) the net asset value per Creation Unit of the

Fund and (y) the market value of the Redemption Securities. If (x) is more than (y), the Authorized Participant will receive the Cash Component from the Fund. If (x) is less than (y), the Authorized Participant will pay the Cash Component to the Fund.

If the Redemption Securities on a Business Day are different from the Deposit Securities, prior to the opening of business on the Exchange (currently 9:30 a.m., Eastern Time), the Advisor through the Custodian makes available through NSCC the name and amount of each Redemption Security in the current Redemption Basket (based on information at the end of the previous Business Day) for the Fund and the (estimated) Cash Component, effective through and including the previous Business Day, per Creation Unit. If the Redemption Securities on a Business Day are different from the Deposit Securities, all redemption requests that day will be processed outside the Clearing Process.

The right of redemption may be suspended or the date of payment postponed: (i) for any period during which the NYSE is closed (other than customary weekend and holiday closings); (ii) for any period during which trading on the NYSE is suspended or restricted; (iii) for any period during which an emergency exists as a result of which disposal of the Shares or determination of the Fund's NAV is not reasonably practicable; or (iv) in such other circumstances as permitted by the SEC, including as described below.

*Custom Redemptions and Cash-in-Lieu*. The Fund may, in its sole discretion, permit or require the substitution of an amount of cash ("cash-in-lieu") to be added to the Cash Component to replace any Redemption Security. The Fund may permit or require cash-in-lieu when, for example, a Redemption Security may not be available in sufficient quantity for delivery or may not be eligible for transfer through the systems of DTC or the Clearing Process. Similarly, the Fund may permit or require cash-in-lieu of Redemption Securities when, for example, the Authorized Participant or its underlying investor is restricted under U.S. or local securities law or policies from transacting in one or more Redemption Securities. The Fund will comply with the federal securities laws in satisfying redemptions with Redemption Securities, including that the Redemption Securities are sold in transactions that would be exempt from registration under the Securities Act. All redemption requests involving cash-in-lieu are considered to be "Custom Redemptions."

*Redemption Requests*. To redeem a Creation Unit, an Authorized Participant must submit an irrevocable redemption request to the Distributor. An Authorized Participant submitting a redemption request is deemed to represent to the Fund that it or, if applicable, the investor on whose behalf it is acting, (i) owns outright or has full legal authority and legal beneficial right to tender for redemption the Creation Unit to be redeemed and can receive the entire proceeds of the redemption, and (ii) all of the Shares there are in the Creation Unit to be redeemed have not been borrowed, loaned or pledged to another party nor are they the subject of a repurchase agreement, securities lending agreement or such other arrangement which would preclude the delivery of such Shares to the Fund. The Fund reserves the absolute right, in its sole discretion, to verify these representations, but will typically require verification in connection with higher levels of redemption activity and/or short interest in the Fund. If the Authorized Participant, upon receipt of a verification request, does not provide sufficient verification of the requested representations, the redemption request will not be considered to be in proper form and may be rejected by the Fund.

*Timing of Submission of Redemption Requests*. An Authorized Participant must submit an irrevocable redemption order no later than the earlier of (i) 4:00 p.m., Eastern Time or (ii) the closing time of the bond markets and/or the trading session on the Exchange, on any Business Day in order to receive that Business Day's NAV. ("Cut-off Time"). The Cut-off Time for Custom Orders is generally two hours earlier. The Business Day the order is deemed received by the Distributor is referred to as the "Transmittal Date." A redemption request is deemed received if (i) such order is received by the Distributor by the Cut-off Time on such day and (ii) all other procedures set forth in the Participant Agreement are properly followed. Persons placing or effectuating Custom Redemptions and/or orders involving cash should be mindful of time deadlines imposed by intermediaries, such as DTC and/or the Federal Reserve System, which may impact the successful processing of such orders to ensure that cash and securities are transferred by the Settlement Date, as defined above.

*Requests Using the Clearing Process*. If available, (portions of) redemption requests may be settled through the Clearing Process. In connection with such orders, the Distributor transmits on behalf of the Authorized Participant, such trade instructions as are necessary to effect the redemption. Pursuant to such trade instructions, the Authorized Participant agrees to deliver the requisite Creation Unit(s) to the Fund, together with such additional information as may be required by the Distributor. Cash Components will be delivered using either the Clearing Process or the Federal Reserve System, as described above.

*Requests Outside the Clearing Process*. If the Clearing Process is not available for (portions of) an order, Redemption Baskets will be delivered outside the Clearing Process. Orders outside the Clearing Process must state that the DTC Participant is not using the Clearing Process and that the redemption will be effected through DTC.

The Authorized Participant must transfer or cause to be transferred the Creation Unit(s) of shares being redeemed through the book-entry system of DTC so as to be delivered through DTC to the Custodian by 10:00 a.m., Eastern Time, on received T+1. In addition, the Cash Component must be received by the Custodian by 12:00 p.m., Eastern Time, on T+1. If the Custodian does not receive the Creation Unit(s) and Cash Component by the appointed times on T+1, the redemption will be rejected, except in the circumstances described below. A rejected redemption request may be resubmitted the following Business Day.

Orders involving foreign Redemption Securities are expected to be settled outside the Clearing Process. Thus, upon receipt of an irrevocable redemption request, the Distributor will notify the Advisor and the Custodian. The Custodian will then provide information of the redemption to the Fund's local sub-custodian(s). The redeeming Authorized Participant, or the investor on whose behalf is acting, will have established appropriate arrangements with a broker-dealer, bank or other custody provider in each jurisdiction in which the Redemption Securities are customarily traded and to which such Redemption Securities (and any cash-in-lieu) can be delivered from the Fund's accounts at the applicable local sub-custodian(s).

*Acceptance of Redemption Requests*. All questions as to the number of shares of each security in the Deposit Securities and the validity, form, eligibility and acceptance for deposit of any securities to be delivered shall be determined by the Trust. The Trust's determination shall be final and binding.

*Delivery of Redemption Basket*. Once the Fund has accepted a redemption request, upon next determination of the Fund's NAV, the Fund will confirm the issuance of a Redemption Basket, against receipt of the Creation Unit(s) at such NAV, any cash-in-lieu and Transaction Fee. A Creation Unit tendered for redemption and the payment of the Cash Component, any cash-in-lieu and Transaction Fee will be effected through DTC. The Authorized Participant, or the investor on whose behalf it is acting, will be recorded on the book-entry system of DTC.

The Redemption Basket will generally be delivered to the redeeming Authorized Participant within T+2. Except under the circumstances described below, however, a Redemption Basket generally will not be issued until the Creation Unit(s) are delivered to the Fund, along with the Cash Component, any cash-in-lieu and Transaction Fee. In certain cases, Authorized Participants will create and redeem Creation Units on the same trade date. In these instances, the Trust reserves the right to settle these transactions on a net basis.

With respect to orders involving foreign Redemption Securities, the Fund may settle Creation Unit transactions on a basis other than T+2 in order to accommodate foreign market holiday schedules, to account for different treatment among foreign and U.S. markets of dividend record dates and ex-dividend dates (that is the last day the holder of a security can sell the security and still receive dividends payable on the security), and in certain other circumstances. When a relevant local market is closed due to local market holidays, the local market settlement process will not commence until the end of the local holiday period.

<u>Cash Redemption Method</u>

When cash redemptions of Creation Units are available or specified for the Fund, they will be effected in essentially the same manner as in-kind redemptions. In the case of a cash redemption, the investor will receive the cash equivalent of the Redemption Basket minus any Transaction Fees, as described above.

**TAX STATUS**

The following discussion is general in nature and should not be regarded as an exhaustive presentation of all possible tax ramifications. All shareholders should consult a qualified tax advisor regarding their investment in the Fund. The Fund is treated as a separate corporation for federal tax purposes. The Fund, therefore, is considered to be a separate entity in determining its treatment under the rules for RICs described below and in the Prospectus. Losses realized by the Fund will not offset gains realized by any other series of the Trust, and the requirements (other than certain organizational requirements) for qualifying for RIC status are determined at the Fund level rather than the Trust level.

As of January 31, 2026, the components of accumulated earnings/(deficit) on a tax basis were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| Undistributed | Undistributed | Post October Loss | Capital Loss | Other | Unrealized | Total |
| Ordinary | Long-Term | and | Carry | Book/Tax | Appreciation/ | Distributable Earnings/ |
| Income | Gains | Late Year Loss | Forwards | Differences | (Depreciation) | (Accumulated Deficit) |
| $267018 | $— | $(47008) | $(77284547) | $— | $(761358) | $(77825895) |

---

The Fund has qualified and intends to continue to qualify and has elected to be treated as a regulated investment company under Subchapter M of Chapter 1 of Subtitle A of the Internal Revenue Code (a "RIC"). If the Fund qualifies for that treatment, the Fund will not be subject to federal income tax on the portion of its investment company taxable income (which includes dividends, interest, the excess of net short-term capital gain over net long-term capital loss ("net short-term capital gain") and net gains and losses from certain foreign currency transactions, if any) and net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss) that it distributes to its shareholders. To qualify for that treatment, the Fund must annually distribute at least 90% of its investment company taxable income ("Distribution Requirement") and must meet requirements relating to the source and nature of its income ("Income Requirement") and the diversification of its assets, among other things.

If the Fund fails to qualify for any taxable year for treatment as a RIC, all of its taxable income would be subject to tax at regular

corporate income tax rates without any deduction for distributions to shareholders, and such distributions (including distributions of net capital gain) generally would be taxable to shareholders as ordinary dividends to the extent of the Fund's current and accumulated earnings and profits (except that, (1) for individual shareholders, the part thereof that is "qualified dividend income," as described in the Prospectus, would be subject to federal income tax at the rate for long -term capital gain -- a maximum of 20%, and (2) a part of those distributions would be eligible for the dividends-received deduction available to corporations under certain circumstances). Furthermore, the Fund could be required to recognize unrealized gains, pay substantial taxes and interest and make substantial distributions before requalifying for RIC treatment.

The Fund will be subject to a nondeductible 4% federal excise tax ("Excise Tax") to the extent it does not distribute to its shareholders in any calendar year at least 98% of its ordinary income for the year plus 98.2% of its capital gain net income for the twelve months ended October 31 of such year. The Fund intends to declare and distribute dividends and other distributions in the amounts and at the times necessary to avoid the application of the Excise Tax.

The Trust, on behalf of the Fund, has the right to reject an order to purchase Shares if (1) the purchaser (or group of purchasers) would, upon obtaining the ordered Shares, own 80% or more of the outstanding Shares and (2) pursuant to Section 351 of the Internal Revenue Code, the Fund would have a basis in the Deposit Securities exchanged therefor different from the market value of such securities on the date of deposit. The Trust also has the right to require information necessary to determine beneficial Share ownership for purposes of making the 80% determination.

*Taxation of the Fund's Investments and Activities*. The Fund's use of hedging strategies, such as entering into forward contracts, involves complex rules that will determine for income tax purposes the amount, character and timing of recognition of the gains and losses the Fund realizes in connection therewith. Gains from the disposition of foreign currencies (except certain gains therefrom that may be excluded by future regulations), and gains from options, forward contracts the Fund derives with respect to its business of investing in securities or foreign currencies, will be treated as qualifying income under the Income Requirement. The Fund will monitor its transactions, make appropriate tax elections and make appropriate entries in its books and records when it acquires any foreign currency, forward contract or hedged investment to mitigate the effect of these rules, prevent its disqualification as a RIC and minimize the imposition of federal income and excise taxes.

Certain foreign currency contracts and options (i.e., certain listed options, such as those on a "broad-based" securities index) in which the Fund invests may be subject to Internal Revenue Code section 1256 (collectively, "section 1256 contracts"). Any section 1256 contracts the Fund holds at the end of its taxable year (and generally for purposes of the Excise Tax, on October 31 of each year) generally must be "marked to market" (that is, treated as having been sold at that time for their fair market value) for federal income tax purposes, with the result that unrealized gains or losses will be treated as though they were realized. Sixty percent of any net gain or loss recognized on these deemed sales, and 60% of any net realized gain or loss from any actual sales of section 1256 contracts, will be treated as long-term capital gain or loss, and the balance will be treated as short-term capital gain or loss; however, certain foreign currency gains or losses arising from section 1256 contracts will be treated as ordinary income or loss.

These rules may operate to increase the amount that the Fund must distribute to satisfy the Distribution Requirement (i.e., with respect to the portion treated as short-term capital gain, which will be includible in investment company taxable income and thus taxable to its shareholders as ordinary income when distributed to them), and to increase the net capital gain the Fund recognizes, even though the Fund may not have closed the transactions and received cash to pay the distributions. Section 1256 contracts also are marked to market for purposes of the Excise Tax.

Section 988 of the Internal Revenue Code also may apply to forward contracts on foreign currencies. Under that section, each foreign currency gain or loss generally is computed separately and treated as ordinary income or loss. In the case of overlap between sections 1256 and 988, special provisions determine the character and timing of any income, gain or loss. If the Fund's section 988 losses exceed other investment company taxable income for a taxable year, it would not be able to distribute any dividends, and any distributions made during that year before the losses were realized would be re-characterized as a return of capital to shareholders, rather than as a dividend, thereby reducing each shareholder's basis in his or her Shares.

The premium the Fund receives for writing (selling) a put or call option is not included in income at the time of receipt. When a covered call option written by the Fund expires, however, it will realize a short-term capital gain equal to the amount of the premium it received for writing the option. When the Fund terminates its obligations under such an option by entering into a closing transaction, it will realize a short-term capital gain (or loss), depending on whether the cost of the closing transaction is less (or more) than the premium it received when it wrote the option.

When a covered call option written by the Fund is exercised, it will be treated as having sold the underlying security, producing long-term or short-term capital gain or loss, depending on the holding period of the underlying security and whether the sum of the option price it receives on the exercise plus the premium it received when it wrote the option is more or less than the underlying security's basis.

If the Fund has an "appreciated financial position"—generally, an interest (including an interest through a forward contract or short sale)

with respect to any stock, debt instrument (other than "straight debt") or partnership interest the fair market value of which exceeds its adjusted basis—and enters into a "constructive sale" of the position, the Fund will be treated as having made an actual sale thereof, with the result that it will recognize gain at that time. A constructive sale generally consists of a short sale, an offsetting notional principal contract or a forward contract the Fund or a related person enters into with respect to the same or substantially identical property. In addition, if the appreciated financial position is itself a short sale or such a contract, acquisition of the underlying property or substantially identical property will be deemed a constructive sale. The foregoing will not apply, however, to any Fund transaction during any taxable year that otherwise would be treated as a constructive sale if the transaction is closed within 30 days after the end of that year and the Fund holds the appreciated financial position unhedged for 60 days after that closing (i.e., at no time during that 60-day period is the Fund's risk of loss regarding that position reduced by reason of certain specified transactions with respect to substantially identical or related property, such as having an option to sell, being contractually obligated to sell, making a short sale of or granting an option to buy substantially identical stock or securities).

Any market discount recognized by the Fund on a bond is taxable as ordinary income. A market discount bond is a bond acquired in the secondary market at a price below its principal amount or adjusted issue price if issued with original issue discount. Absent an election by the Fund to include the market discount in income as it accrues, gain on the Fund's disposition of such an obligation will be treated as ordinary income rather than capital gain to the extent of the accrued market discount. Dividends and interest the Fund receives, and gains it realizes, on foreign securities may be subject to income, withholding or other taxes foreign countries and U.S. possessions impose that would reduce the yield and/or total return on its investments. Tax conventions between certain countries and the United States may reduce or eliminate those taxes, however, and many foreign countries do not impose taxes on capital gains in respect of investments by foreign investors.

The Fund may invest in the stock of passive foreign investment companies ("PFICs"). A PFIC is any foreign corporation (with certain exceptions) that, in general, meets either of the following tests: (1) at least 75% of its gross income for the taxable year is passive or (2) an average of at least 50% of its assets produce, or are held for the production of, passive income. The determination whether a foreign corporation is a PFIC is a fact-intensive determination that is based on various facts and circumstances and thus is subject to change, and the principles and methodology used in determining whether a foreign corporation is a PFIC are subject to interpretation. Investors should be aware that the Fund may not be able, at the time it acquires a foreign corporation's shares, to ascertain whether the corporation is a PFIC and that a foreign corporation may become a PFIC after the Fund acquires shares therein.

Under certain circumstances, the Fund will be subject to federal income tax on a portion of any "excess distribution" it receives on the stock of a PFIC or of any gain on its disposition of that stock (collectively, "PFIC income"), plus interest thereon, even if the Fund distributes the PFIC income as a dividend to its shareholders. The balance of the PFIC income will be included in the Fund's investment company taxable income and, accordingly, will not be taxable to it to the extent it distributes that income to its shareholders. Fund distributions thereof will not be eligible for the 20% maximum federal income tax rate on individuals' "qualified dividend income."

If the Fund invests in a PFIC and elects to treat the PFIC as a qualified electing fund ("QEF"), then in lieu of the foregoing tax and interest obligation, the Fund would be required to include in income each taxable year its pro rata share of the QEF's annual ordinary earnings and net capital gain - which the Fund likely would have to distribute to satisfy the Distribution Requirement and avoid imposition of the Excise Tax - even if the QEF did not distribute those earnings and gain to the Fund. In most instances it will be very difficult, if not impossible, to make this election because of certain requirements thereof.

The Fund may elect to "mark to market" any stock in a PFIC it owns at the end of its taxable year. "Marking-to-market," in this context, means including in gross income each taxable year (and treating as ordinary income) the excess, if any, of the fair market value of the stock over the Fund's adjusted basis therein (including mark-to-market gain for each prior year for which an election was in effect) as of the end of that year. Pursuant to the election, the Fund also may deduct (as an ordinary, not a capital, loss) the excess, if any, of its adjusted basis in PFIC stock over the fair market value thereof as of the taxable year-end, but only to the extent of any net mark-to-market gains with respect to that stock the Fund included in income for prior taxable years under the election; any such deduction would reduce the Fund's adjusted basis in the PFIC stock.

U.S. shareholders of a PFIC must file an annual report containing information the Internal Revenue Service ("Service") requires. The Service has announced that it is developing guidance regarding those reporting obligations and, in the meantime, persons that were required to file Form 8621 before the new section's enactment must continue to file that form as provided in the instructions thereto (e.g., on disposition of PFIC stock or with respect to a QEF). The Fund may invest in units of Canadian royalty trusts. The tax consequences to the Fund of an investment in such a trust depend on the trust's classification for federal tax purposes, which generally is a corporation or a partnership.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) If a Canadian royalty trust is classified as a corporation, it would be a PFIC (with the income tax consequences
 to the Fund described above) if it primarily held equity or debt securities of an underlying operating entity but would not be a PFIC
 if it was actively engaged in a business, such as oil and gas exploration (as a large proportion of Canadian royalty trusts are), and
 did not hold substantial investment-type assets. In the latter event, distributions from the royalty trust to the Fund would be treated
 as dividends that likely would be eligible for the 20% maximum federal income tax rate on "qualified dividend income."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) If a Canadian royalty trust is classified for federal tax purposes as a partnership (by making a certain election
 or otherwise), it likely would be a "qualified publicly traded partnership" (i.e., a publicly traded partnership --
 generally, a partnership the interests in which are "traded on an established securities market" or are "readily tradable
 on a secondary market (or the substantial equivalent thereof)" -- other than a partnership at least 90% of the gross income
 of which consists of income that satisfies the Income Requirement) ("QPTP"), in which event all its net income, regardless
 of source, would be qualifying income to the Fund under that requirement. But if such a royalty trust is not a QPTP (because, for example,
 it satisfies the Income Requirement, i.e., at least 90% of its gross income is qualifying income), then (a) it would be a publicly
 traded partnership that likely would be treated for federal tax purposes as a corporation, with the income tax consequences mentioned
 in (1) above, or (b) if not, (i) the Fund would treat its share of the trust's income as qualifying income under the Income
 Requirement only to the extent it would be qualifying income if realized directly by the Fund in the same manner as realized by the trust
 and (ii) any non-qualifying income of the trust would pass through to the Fund.

The Fund may invest in ownership units (i.e., limited partnership interests) in MLPs, which generally are classified as partnerships for federal tax purposes. Most MLPs in which the Fund may invest are expected to be QPTPs, all the net income from which (regardless of source) would be qualifying income to the Fund under the Income Requirement, but the Fund's investments therein generally may not exceed 25% of the value of its total assets. If the Fund invests in an MLP that is not a QPTP, the net income the Fund earns therefrom would be treated as qualifying income under the Income Requirement only to the extent it would be qualifying income if realized directly by the Fund in the same manner as realized by the MLP.

*Taxation of the Fund's Shareholders*. Dividends and other distributions declared by the Fund in October, November or December and paid to shareholders of record in such a month during the following January will be treated as having been received by such shareholders on December 31 of the year in which the distributions were declared.

If a shareholder sells Shares at a loss and acquires other Shares (whether through purchase, the automatic reinvestment of distributions, if available, or otherwise) within 30 days before or after the sale, all or part of that loss will not be deductible and instead will increase the basis in the newly purchased shares. Any loss on the sale or exchange of Shares held for six months or less will be treated as long-term capital loss to the extent of any capital gain distributions received on those Shares.

Investors should be aware that the price of Shares at any time may reflect the amount of a forthcoming dividend or other distribution, so if they purchase Shares shortly before the record date for a distribution, they will pay full price for the shares and receive some portion of the price back as a taxable distribution even though it represents a partial return of invested capital.

A Fund shareholder who wants to use the average basis method for determining basis in Fund shares ("Covered Shares"), must elect to do so in writing (which may be electronic). If a Fund shareholder fails to affirmatively elect the average basis method, then basis determination will be made in accordance with the Fund's default method, which might be a method other than average basis. If, however, the Fund's default method is average basis and a Fund shareholder wishes to use a different acceptable method for basis determination (e.g., a specific identification method), the shareholder may elect to do so. The basis determination method a Fund shareholder elects may not be changed with respect to a redemption of Covered Shares after the settlement date of the redemption.

In addition to the current requirement to report the gross proceeds from the redemption of shares, the Fund (or its administrative agent) must report to the Service and furnish to its shareholders the basis information for Covered Shares and indicate whether they had a short-term or long-term holding period. Fund shareholders should consult with their tax advisors to determine the best Service-accepted basis determination method for their tax situation and to obtain more information about how the basis reporting law will apply to them.

The Health Care Reform and Education Reconciliation Act of 2010 requires an individual to pay a 3.8% tax on the lesser of (1) the individual's "net investment income," which generally includes dividends, interest and net gains from the disposition of investment property (including certain dividends and capital gain distributions paid by the Fund), or (2) the excess of the individual's "modified adjusted gross income" over a threshold amount ($250,000 for married persons filing jointly and $200,000 for single taxpayers).. This tax is in addition to any other taxes due on that income. A similar tax will apply for those years to estates and trusts. Shareholders should consult their own tax advisers regarding the effect, if any, this provision may have on their investment in Shares.

Distributions of ordinary income and net capital gains may also be subject to state and local income taxes. Income dividends the Fund pays to a nonresident alien individual, foreign corporation or partnership, or foreign trust or estate (each, a "Non-U.S. Shareholder"), other than (1) dividends paid to a Non-U.S. Shareholder whose ownership of Shares is effectively connected with a trade or business within the United States the shareholder conducts ("effectively connected") and (2) capital gain distributions paid to a nonresident alien individual who is physically present in the United States for no more than 182 days during the taxable year, generally will be subject to a federal withholding tax of 30% (or lower treaty rate).

A Non-U.S. Shareholder will generally not be subject to federal withholding or income tax on gains, if any, realized on the sale of Shares unless (1) the gain is effectively connected or (2) in the case of an individual shareholder, he or she is present in the United States for no more than 182 days during the taxable year of the sale and certain other conditions are met. Gains on the sale of Shares and income

dividends that are effectively connected will generally be subject to federal income tax at regular income tax rates. Non-U.S. Shareholders are urged to consult their own tax advisors concerning the applicability of federal income tax or withholding tax to their investment in the Fund.

The foregoing discussion is a summary only and is not intended as a substitute for careful tax planning. Purchasers of Shares should consult their own tax advisors as to the tax consequences of investing in Shares, including under federal, state, local and foreign tax laws. Finally, the foregoing discussion is based on applicable provisions of the Internal Revenue Code and regulations, judicial authority and administrative interpretations in effect on the date hereof; changes in any applicable authority, which often occur, could materially affect the conclusions discussed above.

*Foreign Account Tax Compliance Act.* Payments to a shareholder that is either a foreign financial institution ("FFI") or a non-financial foreign entity ("NFFE") within the meaning of the Foreign Account Tax Compliance Act ("FATCA") may be subject to a generally nonrefundable 30% withholding tax on: (a) income dividends paid by the Fund and (b) certain capital gain distributions and the proceeds arising from the sale of Fund shares paid by the Fund. FATCA withholding tax generally can be avoided: (a) by an FFI, subject to any applicable intergovernmental agreement or other exemption, if it enters into a valid agreement with the IRS to, among other requirements, report required information about certain direct and indirect ownership of foreign financial accounts held by U.S. persons with the FFI and (b) by an NFFE, if it: (i) certifies that it has no substantial U.S. persons as owners or (ii) if it does have such owners, reports information relating to them. 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.

<u>Dividends and Other Distributions</u>

The following information supplements and should be read in conjunction with the section in the Prospectus entitled "Dividends, Other Distributions and Taxes."

*General Policies*. Ordinarily, dividends from net investment income, if any, are declared and paid monthly. Distributions of net realized securities gains, if any, generally are declared and paid once a year, but the Trust may make distributions on a more frequent basis.

The Trust reserves the right to declare special distributions if, in its reasonable discretion, such action is necessary or advisable to preserve the status of the Fund as a RIC or to avoid imposition of income or excise taxes on undistributed income. Dividends and other distributions on Shares are distributed, as described below, on a pro rata basis to Beneficial Owners of the Shares. Dividend payments are made through DTC Participants and Indirect Participants to Beneficial Owners then of record with proceeds received from the Fund.

*Dividend Reinvestment Service*. No reinvestment service is provided by the Trust. Broker-dealers may make available the DTC book entry Dividend Reinvestment Service for use by Beneficial Owners of the Fund for reinvestment of their dividend distributions. Beneficial Owners should contact their broker to determine the availability and costs of the service and the details of participation therein. Brokers may require Beneficial Owners to adhere to specific procedures and timetables.

**INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

Cohen & Company, Ltd., located at 1350 Euclid Ave., Suite 800, Cleveland OH 44115, serves as the Fund's independent registered public accounting firm. The independent registered public accounting firm is responsible for auditing the annual financial statements of the Fund.

**LEGAL COUNSEL**

Thompson Hine LLP, located at 41 South High Street, Suite 1700, Columbus, OH 43215, serves as the Trust's legal counsel.

**FINANCIAL STATEMENTS**

The financial statements of the Fund included in the Fund's most recent [annual report](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001532206/000158064226002439/arrowgyld_n-csr.htm) to shareholders for the fiscal year ended January 31, 2026, including the notes thereto, and the report of the independent registered public accounting firm thereon are incorporated by reference into this SAI. These financial statements include the Fund's schedule of investments, statements of assets and liabilities, statements of operations, statements of changes in net assets, financial highlights, and notes. You may obtain a copy of the Fund's annual report or semi-annual report without charge by calling 1-877-277-6933, or by visiting the Fund's website at www.ArrowFunds.com.

**APPENDIX A**

**PROXY VOTING POLICIES AND PROCEDURES**

**OF ARROW INVESTMENT ADVISORS, LLC**

Arrow Investment Advisors, LLC ("Arrow") votes (or refrains from voting) proxies for a client in a manner that Arrow, in the exercise of its independent business judgment, concludes are in the best economic interests of such client. In some cases, Arrow may determine that it is in the best economic interests of a client to refrain from exercising the Fund's proxy voting rights (such as, for example, proxies on certain non-U.S. securities that might impose costly or time-consuming in-person voting requirements). With regard to the relationship between securities lending and proxy voting, Arrow's approach is also driven by our clients' economic interests. The evaluation of the economic desirability of recalling loans involves balancing the revenue producing value of loans against the likely economic value of casting votes. Based on our evaluation of this relationship, we believe that the likely economic value of casting a vote generally is less than the securities lending income, either because the votes will not have significant economic consequences or because the outcome of the vote would not be affected by Arrow recalling loaned securities in order to ensure they are voted. Periodically, Arrow analyzes the process and benefits of voting proxies for securities on loan, and will consider whether any modification of its proxy voting policies or procedures are necessary in light of any regulatory changes. Arrow will normally vote on specific proxy issues in accordance with its proxy voting guidelines. Arrow's proxy voting guidelines provide detailed guidance as to how to vote proxies on certain important or commonly raised issues. Arrow may, in the exercise of its business judgment, conclude that the proxy voting guidelines do not cover the specific matter upon which a proxy vote is requested, or that an exception to the proxy voting guidelines would be in the best economic interests of a client. Arrow votes (or refrains from voting) proxies without regard to the relationship of the issuer of the proxy (or any shareholder of such issuer) to the client, the client's affiliates (if any), Arrow or Arrow's affiliates. When voting proxies, Arrow attempts to encourage companies to follow practices that enhance shareholder value and increase transparency and allow the market to place a proper value on their assets. With respect to certain specific issues:

&nbsp;&nbsp;&nbsp;&nbsp;· Arrow generally supports the board's nominees in the election of directors and
 generally supports proposals that strengthen the independence of boards of directors;

&nbsp;&nbsp;&nbsp;&nbsp;· Arrow generally does not support proposals on social issues that lack a demonstrable
 economic benefit to the issuer and a Fund investing in such issuer; and

&nbsp;&nbsp;&nbsp;&nbsp;· Arrow generally votes against anti-takeover proposals and proposals that would
 create additional barriers or costs to corporate transactions that are likely to deliver a premium to shareholders.

When Arrow exercises voting rights, by proxy or otherwise, with respect to investment companies owned by the funds, Arrow will vote the shares held by the client in the same proportion as the votes of all other holders of such security.

Arrow may conclude that the best interest of the firm's client requires that a proxy be voted in a manner that differs from the predetermined proxy voting policy. In this situation, Arrow may vote the proxy other than according to such policy.

Information with respect to how Arrow voted Fund proxies relating to portfolio securities during the most recent 12-month period is available: (i) without charge, upon request, by calling 1-877-277-6933 or through the Fund's website at www.ArrowFunds.com and (ii) on the SEC's website at www.sec.gov.

**APPENDIX B**

The Nationally Recognized Statistical Rating Organizations (individually, an "NRSROs") that may be utilized by the Advisor with regard to portfolio investments for the Fund include Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's Ratings Services ("S&P"), and Fitch Investors Service, Inc. ("Fitch"). Set forth below is a description of the relevant ratings of each such NRSRO. The NRSROs that may be utilized by the Advisor and the description of each NRSRO's ratings is as of the date of this SAI, and may subsequently change.

---

| | |
|:---|:---|
| **A.** | **Long-Term Ratings** |
| **1.** | **Moody's Investors Service — Long-Term Corporate Obligation Ratings**<br> Moody's long-term obligation ratings are opinions of the relative credit risk of fixed-income obligations with an original maturity of one year or more. They address the possibility that a financial obligation will not be honored as promised. Such ratings use Moody's Global Scale and reflect both the likelihood of default and any financial loss suffered in the event of default. |
| **Aaa** | Obligations rated Aaa are judged to be of the highest quality, with minimal credit risk. |
| **Aa** | Obligations rated Aa are judged to be of high quality and are subject to very low credit risk. |
| **A** | Obligations rated A are considered upper-medium grade and are subject to low credit risk. |
| **Baa** | Obligations rated Baa are subject to moderate credit risk. They are considered medium grade and as such may possess certain speculative characteristics. |
| **Ba** | Obligations rated Ba are judged to have speculative elements and are subject to substantial credit risk. |
| **B** | Obligations rated B are considered speculative and are subject to high credit risk. |
| **Caa** | Obligations rated Caa are judged to be of poor standing and are subject to very high credit risk. |
| **Ca** | Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest. |
| **C** | Obligations rated C are the lowest rated class of bonds and are typically in default, with little prospect for recovery of principal or interest. |
| **Note** | Moody's appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. |
| **2.** | **Standard and Poor's — Long-Term Issue Credit Ratings (including Preferred Stock)** |
|  | Issue credit ratings are based, in varying degrees, on the following considerations: |
|  | Likelihood of payment—capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation; |
|  | Nature of and provisions of the obligation; |
|  | Protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws |
|  | affecting creditors' rights. |
|  | Issue ratings are an assessment of default risk, but may incorporate an assessment of relative seniority or ultimate recovery in the event of default. Junior obligations are typically rated lower than senior obligations, to reflect the lower priority in bankruptcy, as noted above. (Such differentiation may apply when an entity has both senior and subordinated obligations, secured and unsecured obligations, or operating company and holding company obligations.) |
| **AAA** | An obligation rated 'AAA' has the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is extremely strong. |
| **AA** | An obligation rated 'AA' differs from the highest-rated obligations only to a small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong. |

---

---

| | |
|:---|:---|
| **A** | An obligation rated 'A' is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong. |
| **BBB** | An obligation rated 'BBB' exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. |
| **Note** | Obligations rated 'BB', 'B', 'CCC', 'CC', and 'C' are regarded as having significant speculative characteristics. 'BB' indicates the least degree of speculation and 'C' the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions. |
| **BB** | An obligation rated 'BB' is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation. |
| **B** | An obligation rated 'B' is more vulnerable to nonpayment than obligations rated 'BB', but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation. |
| **CCC** | An obligation rated 'CCC' is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation. |
| **CC** | An obligation rated 'CC' is currently highly vulnerable to nonpayment. |
| **C** | A 'C' rating is assigned to obligations that are currently highly vulnerable to nonpayment, obligations that have payment arrearages allowed by the terms of the documents, or obligations of an issuer that is the subject of a bankruptcy petition or similar action which have not experienced a payment default. Among others, the 'C' rating may be assigned to subordinated debt, preferred stock or other obligations on which cash payments have been suspended in accordance with the instrument's terms. |
| **D** | An obligation rated 'D' is in payment default. The 'D' rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payments will be made during such grace period. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized. |
| **Note** | Plus (+) or minus (-). The ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. |
| **NR** | This indicates that no rating has been requested, that there is insufficient information on which to base a rating, or that Standard & Poor's does not rate a particular obligation as a matter of policy. |
| **3.** | **Fitch — International Long-Term Credit Ratings** <br>International Long-Term Credit Ratings (LTCR) may also be referred to as Long-Term Ratings. When assigned to most issuers, it is used as a benchmark measure of probability of default and is formally described as an Issuer Default Rating (IDR). The major exception is within Public Finance, where IDRs will not be assigned as market convention has always focused on timeliness and does not draw analytical distinctions between issuers and their underlying obligations. When applied to issues or securities, the LTCR may be higher or lower than the issuer rating (IDR) to reflect relative differences in recovery expectations.<br>The following rating scale applies to foreign currency and local currency ratings: |
|  | **Investment Grade** |
| **5** |  |
| **AAA** | Highest credit quality. 'AAA' ratings denote the lowest expectation of credit risk. They are assigned only in case of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events. |
| **AA** | Very high credit quality. 'AA' ratings denote expectations of very low credit risk. They indicate very strong capacity for payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events. |

---

---

| | |
|:---|:---|
| **A** | High credit quality. 'A' ratings denote expectations of low credit risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings. |
| **BBB** | Good credit quality. 'BBB' ratings indicate that there are currently expectations of low credit risk. The capacity for payment of financial commitments is considered adequate but adverse changes in circumstances and economic conditions are more likely to impair this capacity. This is the lowest investment grade category. |
|  | **Speculative Grade** |
| **BB** | Speculative. 'BB' ratings indicate that there is a possibility of credit risk developing, particularly as the result of adverse economic change over time; however, business or financial alternatives may be available to allow financial commitments to be met. Securities rated in this category are not investment grade. |
| **B** | Highly speculative. 'B' ratings indicate that significant credit risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is contingent upon a sustained, favorable business and economic environment. |
| **CCC** | Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic conditions. |
| **CC** | Default of some kind appears probable. |
| **C** | Default is imminent. |
| **RD** | Indicates an entity that has failed to make due payments (within the applicable grace period) on some but not all material financial obligations, but continues to honor other classes of obligations. |

---

PART C

OTHER INFORMATION

Item 28. EXHIBITS.

---

| | |
|:---|:---|
| &nbsp;&nbsp;(a) Articles of Incorporation. | &nbsp;&nbsp;(a) Articles of Incorporation. |
| &nbsp;&nbsp; &nbsp;&nbsp;(i) | &nbsp;&nbsp;[Certificate of Trust, which was filed as an exhibit to the Registrant's Registration Statement on November 1, 2011, is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1532206/000091047211002202/exaicertificateoftrust.htm) |
| &nbsp;&nbsp; &nbsp;&nbsp;(ii) | &nbsp;&nbsp;[Amendment to Certificate of Trust, which was filed as an exhibit to the Registrant's Registration Statement, which was filed on May 30, 2014, is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1532206/000091047214002464/exhibitaii.htm) |
| &nbsp;&nbsp; &nbsp;&nbsp;(iii) | &nbsp;&nbsp;[Registrant's Trust Instrument, which was filed as an exhibit to the Registrant's Registration Statement on November 1, 2011, is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1532206/000091047211002202/exaiitrust_instrument.htm) |
| &nbsp;&nbsp;(b) By-Laws | &nbsp;&nbsp;(b) By-Laws |
| &nbsp;&nbsp; &nbsp;&nbsp;(i) | &nbsp;&nbsp;[Registrant's Amended and Restated By-Laws, which was filed as an exhibit to the Registrant's Registration Statement on May 31, 2023, is incorporated by reference.](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001532206/000158064223003011/arrow-globalyield_485b.htm) |
| &nbsp;&nbsp;(c) Instruments Defining Rights of Security Holders | &nbsp;&nbsp;(c) Instruments Defining Rights of Security Holders |
| &nbsp;&nbsp; &nbsp;&nbsp;(i) | &nbsp;&nbsp;None other than in the Declaration of Trust and By-Laws of the Registrant. |
| &nbsp;&nbsp;(d) Investment Advisory Contracts. | &nbsp;&nbsp;(d) Investment Advisory Contracts. |
| &nbsp;&nbsp; &nbsp;&nbsp;(i) | &nbsp;&nbsp;[Investment Advisory Agreement between Arrow ETF Trust (the "Trust") and Arrow Investment Advisors, LLC (the "Advisor"), which was filed as an exhibit to the Registrant's Registration Statement on May 31, 2013, is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1532206/000091047213002257/exd.htm) |
| &nbsp;&nbsp; &nbsp;&nbsp;(ii) | &nbsp;&nbsp;[Amended and Restated Investment Advisory Agreement between the Trust and the Advisor, which was filed as an exhibit to the Registrant's Registration Statement on May 27, 2016, is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1532206/000158064216008989/exd.htm) |
| &nbsp;&nbsp;(e) Underwriting Contracts. | &nbsp;&nbsp;(e) Underwriting Contracts. |
| &nbsp;&nbsp; &nbsp;&nbsp;(i) | &nbsp;&nbsp;[Form of ETF Distribution Agreement with Archer Distributors, LLC, which was filed as an exhibit to the Registrant's Registration Statement on May 31, 2023, is incorporated by reference.](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001532206/000158064223003011/arrow-globalyield_485b.htm) |
| &nbsp;&nbsp; &nbsp;&nbsp;(ii) | &nbsp;&nbsp;[Form of Archer Distributors, LLC Authorized Participation Agreement, which was filed as an exhibit to the Registrant's Registration Statement on May 31, 2023, is incorporated by reference.](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001532206/000158064223003011/arrow-globalyield_485b.htm) |
| &nbsp;&nbsp;(f) Bonus of Profit Sharing Contracts. None. | &nbsp;&nbsp;(f) Bonus of Profit Sharing Contracts. None. |
| &nbsp;&nbsp;(g) Custodial Agreements. | &nbsp;&nbsp;(g) Custodial Agreements. |
| &nbsp;&nbsp; &nbsp;&nbsp;(i) | &nbsp;&nbsp;[Custody and Transfer Agent Agreement with Brown Brothers Harriman & Co., which was filed as an exhibit to the Registrant's Registration Statement on April 3, 2012, is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1532206/000091047212000999/f9928g.htm) |
| &nbsp;&nbsp;(h) Other Material Contracts. | &nbsp;&nbsp;(h) Other Material Contracts. |
| &nbsp;&nbsp; &nbsp;&nbsp;(i) | &nbsp;&nbsp;[Form of Fund Services Agreement with Ultimus Fund Solutions, LLC, which was filed as an exhibit to the Registrant's Registration Statement on May 31, 2022, is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1532206/000158064222002898/ex99h_ix.htm) |
| &nbsp;&nbsp;(i) Legal Opinion. | &nbsp;&nbsp;(i) Legal Opinion. |
| &nbsp;&nbsp; &nbsp;&nbsp;(i) | &nbsp;&nbsp;[Legal Opinion of Thompson Hine, LLP, which was filed as an exhibit to the Registrant's Registration Statement on May 30, 2014, is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1532206/000091047214002464/opinionandconsent.htm) |

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---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;(ii) | &nbsp;&nbsp;[Legal Consent of Thompson Hine, LLP is filed herewith.](ex99i.htm) |
| &nbsp;&nbsp;(j) Other Opinions. | &nbsp;&nbsp;(j) Other Opinions. |
| &nbsp;&nbsp; &nbsp;&nbsp;(i) | &nbsp;&nbsp;[Consent of Independent Registered Public Accounting Firm is filed herewith.](ex99j.htm) |
| &nbsp;&nbsp;(k) Omitted Financial Statements. None. | &nbsp;&nbsp;(k) Omitted Financial Statements. None. |
| &nbsp;&nbsp;(l) Initial Capital Agreements. | &nbsp;&nbsp;(l) Initial Capital Agreements. |
| &nbsp;&nbsp; &nbsp;&nbsp;(i) | &nbsp;&nbsp;[Letter of Investment Intent, which was filed as an exhibit to the Registrant's Registration Statement on April 3, 2012, is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1532206/000091047212000999/f9928l.htm) |
| &nbsp;&nbsp;(m) Rule 12b-1 Plans. | &nbsp;&nbsp;(m) Rule 12b-1 Plans. |
| &nbsp;&nbsp; &nbsp;&nbsp;(i) | &nbsp;&nbsp;[Plan of Distribution Pursuant to Rule 12b-1 with respect to shares of the Registrant, which was filed as an exhibit to the Registrant's Registration Statement on April 3, 2012, is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1532206/000091047212000999/f9928m.htm) |
| &nbsp;&nbsp;(n) Rule 18f-3 Plan. None. | &nbsp;&nbsp;(n) Rule 18f-3 Plan. None. |
| &nbsp;&nbsp;(o) Reserved. | &nbsp;&nbsp;(o) Reserved. |
| &nbsp;&nbsp;(p) Code of Ethics. | &nbsp;&nbsp;(p) Code of Ethics. |
| &nbsp;&nbsp; &nbsp;&nbsp;(i) | &nbsp;&nbsp;[Code of Ethics of the Trust, which was filed as an exhibit to the Registrant's Registration Statement on April 3, 2012, is incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1532206/000091047212000999/f9928pi.htm) |
| &nbsp;&nbsp; &nbsp;&nbsp;(ii) | &nbsp;&nbsp;[Code of Ethics of the Advisor was filed as an exhibit to the Registrant's Registration Statement on May 31, 2023, is incorporated by reference.](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001532206/000158064223003011/arrow-globalyield_485b.htm) |
| &nbsp;&nbsp; &nbsp;&nbsp;(iii) | &nbsp;&nbsp;[Code of Ethics for principal underwriter (Archer Distributors, LLC), which was filed as an exhibit to the Registrant's Registration Statement on May 31, 2023, is incorporated by reference.](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001532206/000158064223003011/arrow-globalyield_485b.htm) |
| &nbsp;&nbsp;(q) Powers of Attorney | &nbsp;&nbsp;(q) Powers of Attorney |
| &nbsp;&nbsp; &nbsp;&nbsp;(i) | &nbsp;&nbsp;[Power of Attorney for Robert S. Andrialis, Thomas T. Sarkany, Paul Montgomery, and Sam Singh, which were filed as an exhibit to the Registrant's Registration Statement on May 30, 2014, are incorporated by reference.](http://www.sec.gov/Archives/edgar/data/1532206/000091047214002464/exhibitqi.htm) |
| &nbsp;&nbsp; &nbsp;&nbsp;(ii) | &nbsp;&nbsp;[Power of Attorney for Joseph Barrato and the Trust which was filed as an exhibit to the Registrant's Registration Statement on May 29, 2020, is incorporated by reference.](https://www.sec.gov/Archives/edgar/data/1532206/000158064220002214/ex99qii.htm) |

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**Item 29. Persons Controlled by or Under Common Control with the Registrant.**

There are no persons controlled by or under common control with the Registrant.

**Item 30. Indemnification.**

Generally, certain of the agreements with the Trust, or related to the Trust, provide indemnification of the Trust's Trustees, officers, the underwriter, and certain Trust affiliates. Insurance carried by the Trust provides indemnification of the Trustees and officers. The details of these sources of indemnification and insurance follow.

Article IX, Section 2(a) of the Agreement and Declaration of Trust provides that every person who is, or has been, a Trustee or an officer, employee or agent of the Trust, including persons who act at the request of the Trust as directors, trustees, officers, employees or agents of another organization in which the Trust has an interest as a shareholder, creditor or otherwise ("Covered Person") shall be indemnified by the Trust or the appropriate series to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him or her in connection with any claim, action, suit or proceeding in which he or she becomes involved as a party or otherwise by virtue of his or her being or having been a Covered Person and against amounts paid or incurred by him or her in the settlement thereof.

Article IX, Section 2(b) provides that no indemnification shall be provided to a Covered Person: (i) who shall have been adjudicated by a court or body before which the proceeding was brought (A) to be liable to the Trust or its shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office or (B) not to have acted in good faith in the reasonable belief that his or her action was in the best interest of the Trust; or (ii) in the event of a settlement, if there has been a determination that such Covered Person engaged in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office: (A) by the court or other body approving the settlement; (B) by at least a majority of those Trustees who are neither interested persons of the Trust nor are parties to the matter based upon a review of readily available facts (as opposed to a full trial-type inquiry); or (C) by written opinion of independent legal counsel based upon a review of readily available facts (as opposed to a full trial-type inquiry).

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling persons of the Registrant pursuant to the provisions of Delaware law and the Agreement and Declaration of the Registrant or the By-Laws of the Registrant, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a trustee, officer or controlling person of the Trust in the successful defense of any action, suit or proceeding) is asserted by such trustee, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

The ETF Distribution Agreement (the "ETF Distribution Agreement") between the Trust and Archer Distributors, LLC ("Archer") provides that the Registrant agrees to indemnify and hold Archer harmless from and against any and all losses, damages, costs, charges, reasonable counsel fees, payments, expenses and liability arising out of or attributable to the Registrant's refusal or failure to comply with the terms of the Agreement, or which arise out of the Registrant's lack of good faith, gross negligence or willful misconduct with respect to the Registrant's performance under or in connection with the ETF Distribution Agreement. Additionally, the ETF Distribution Agreement provides that Archer covenants and agrees that it will indemnify and hold harmless the Trust and each of their Trustees and officers and each person, if any, who controls the Trust within the meaning of Section 15 of the 1933 Act, against any loss, liability, damages, claim or expense (including the reasonable cost of investigating or defending any alleged loss, liability, damages, claim or expense and reasonable counsel fees and disbursements incurred in connection therewith) arising out of or based upon any Disqualifying Conduct by Archer in connection with the obligations of Archer hereunder.

The Registrant maintains a mutual fund directors and officers liability policy. The policy, under certain circumstances, such as the inability of the Trust to indemnify Trustees and officers provides coverage to Trustees and officers. Coverage under the policy would include losses by reason of any act, error, omission, misstatement, misleading statement, neglect or certain breaches of duty.

Generally, each investment advisory agreement provides that neither the adviser nor any director, manager, officer or employee of the adviser performing services for the Trust at the direction or request of the adviser in connection with the adviser's discharge of its obligations hereunder shall be liable for any error of judgment or mistake of law or for any loss suffered by the Trust in connection with any matter to which the agreement relates, and the adviser shall not be responsible for any action of the Trustees of the Trust in following or declining to follow any advice or recommendation of the adviser or any sub-adviser retained by the adviser pursuant to Section 9 of the agreement; PROVIDED, that nothing herein contained shall be construed (i) to protect the adviser against any liability to the Trust or its shareholders to which the adviser would otherwise be subject by reason of willful misfeasance, bad faith, or gross negligence in the performance of the adviser's duties, or by reason of the adviser's reckless disregard of its obligations and duties under the agreement, or (ii) to protect any director, manager, officer or employee of the adviser who is or was a Trustee or officer of the Trust against any liability of the Trust or its shareholders to which such person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of such person's office with the Trust.

The Fund Services Agreement with Ultimus Fund Solutions, LLC provides that the Registrant agrees to indemnify and hold Ultimus Fund Solutions, LLC harmless from and against any and all losses, damages, costs, charges, reasonable counsel fees, payments, expenses and liability arising out of or attributable to the Registrant's refusal or failure to comply with the terms of the Agreement, or which arise out of the Registrant's lack of good faith, gross negligence or willful misconduct with respect to the Registrant's performance under or in connection with this Agreement.

**Item 31. Business and Other Connections of the Investment Advisor.**

Reference is made to the caption "Management of the Fund" in the Prospectus constituting Part A which is included in this Registration Statement and "Management" in the Statement of Additional Information constituting Part B which is included in this Registration Statement.

The information as to the directors and executive officers of Arrow Investment Advisors, LLC is set forth in Arrow Investment Advisors, LLC's Form ADV filed with the Securities and Exchange Commission on March 27, 2013 and amended through the date hereof, and is incorporated herein by reference.

**Item 32. Principal Underwriters.**

a) Archer is the principal underwriter of the Registrant.

Archer also acts as principal underwriter for Arrow Investments Trust.

(b) Archer is registered with Securities and Exchange Commission as a broker-dealer and is a member of the Financial Industry Regulatory Authority, Inc. The principal business address of Archer is 6100 Chevy Chase Dr., Suite 100, Laurel, MD 20707. Archer is an affiliate of Arrow Investment Advisors, LLC. To the best of Registrant's knowledge, the following are the managers and officers of Archer:

---

| | | |
|:---|:---|:---|
| **Name** | **Positions and Offices with Underwriter** | **Positions and Offices with the Trust** |
| Scott Widder | President | None |
| Michael Nielson | Chief Compliance Officer, Chief Operations Officer | None |
| Estee C. Dorfman | Financial Operations Principal | None |
| Joseph J. Barrato | Managing Member | Trustee, President, and Principal Executive Officer |

---

(c)&nbsp;&nbsp;&nbsp;&nbsp; Not applicable.

**Item 33. Location of Accounts and Records.**

All accounts, books and documents required to be maintained by the Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and Rules 31a-1 through 31a-3 thereunder are maintained at the office of the Registrant, Advisor, Principal Underwriter, Transfer Agent, Fund Accountant, Administrator and Custodian at the addresses stated in the SAI.

**Item 34. Management Services.**

Not applicable.

 **Item 35. Undertakings.**

None.

**SIGNATURES**

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for effectiveness of this registration statement pursuant to Rule 485(b) under the Securities Act and has duly caused this amendment to its registration statement to be signed on its behalf by the undersigned, duly authorized, in the City of Columbus, State of Ohio, on the 29<sup>th</sup> day of May, 2026.

Arrow ETF Trust

By: <u>/s/ Joseph Barrato\*</u> 

Joseph Barrato, President and Principal Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this amendment to the registration statement has been signed below by the following persons in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;Name | &nbsp;&nbsp;Title | &nbsp;&nbsp;Date |
| &nbsp;&nbsp;Robert S. Andrialis\* | &nbsp;&nbsp;Trustee | &nbsp;&nbsp;May 29, 2026 |
| &nbsp;&nbsp;Paul Montgomery\* | &nbsp;&nbsp;Trustee | &nbsp;&nbsp;May 29, 2026 |
| &nbsp;&nbsp;Thomas T. Sarkany\* | &nbsp;&nbsp;Trustee | &nbsp;&nbsp;May 29, 2026 |
| &nbsp;&nbsp;Joseph Barrato\* | &nbsp;&nbsp;Trustee, President, and Principal Executive Officer | &nbsp;&nbsp;May 29, 2026 |
| &nbsp;&nbsp;Sam Singh\* | &nbsp;&nbsp;Treasurer and Principal Financial Officer | &nbsp;&nbsp;May 29, 2026 |

---

\*By: <u>/s/ JoAnn M. Strasser</u> 

JoAnn M. Strasser, Attorney-in-fact

**EXHIBIT INDEX**

(i)(ii) <u>[Legal Consent of Thompson Hine LLP](ex99i.htm)</u> <br> <u>(j)(i)</u> <u>[Consent of Cohen and Company Ltd.](ex99j.htm)</u>

## Ex-99.I

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May 29, 2026

Arrow ETF Trust

6100 Chevy Chase Drive, Suite 100

Laurel, MD 20707

**Re: <u>Arrow ETF Trust - File Nos. 811-22624 and 333-177651</u>**

Gentlemen:

A legal opinion (the "Legal Opinion") that we prepared was filed with Post-Effective Amendment No. 4 to the Arrow ETF Trust Registration Statement. We hereby give you our consent to incorporate by reference the Legal Opinion into Post-Effective Amendment No. 25 under the Securities Act of 1933 (Amendment No. 28 under the Investment Company Act of 1940) (the "Amendment") and consent to all references to us in the Amendment.

Very truly yours,

<u>/s/ Thompson Hine LLP</u> 

THOMPSON HINE LLP

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## Ex-99.J

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**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We hereby consent to the incorporation by reference in this Registration Statement on Form N-1A of our report dated April 1, 2026, relating to the financial statements and financial highlights of Arrow Dow Jones Global Yield ETF, a series of Arrow ETF Trust, which are included in Form N-CSR for the year ended January 31, 2026, and to the references to our firm under the headings "Fund Service Providers" and "Financial Highlights" in the Prospectus and "Independent Registered Public Accounting Firm" in the Statement of Additional Information.

/s/ Cohen & Company, Ltd.

COHEN & COMPANY, LTD.

Cleveland, Ohio

May 28, 2026

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